Should I get a loan for a motorcycle?

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Slov
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Should I get a loan for a motorcycle?

Post by Slov » Wed Apr 04, 2018 11:26 am

Im coming home from Afghanistan in a few months here, and I am looking at vehicles to buy since I lived in Alaska for the first year without a car. Im coming back with 25k. I am putting 10k towards my emergency fund. I have no debt, and I fully max my Vanguard TRF 2060 each year. I will be increasing my TSP from 5 percent to 15-20 percent once I get back. I will have 15k to play with, but 5k will be allocated towards non vehicle purchases.

So, this leaves me with 10k to pay cash for a vehicle. Now, I have wanted a motorcycle for a very long time. I dont have a car so I need to get one before a motorcycle since Im in Alaska. However, would it be smart to get a loan for a used motorcycle? I have no credit and I am seeking a way to build credit in a low total amount. I feel that this could be too much and not the smartest way to build credit. I feel a smarter way to build credit is a secured card that a I pay off every month. I think I know what I need to do, but I am looking for advice on credit building and this idea of a loan. I really dont like going into debt and I am very hesitant to even do this. I dont like it. I wouldn't mind living without a motorcycle for another year or so.

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Pajamas
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Re: Should I get a loan for a motorcycle?

Post by Pajamas » Wed Apr 04, 2018 11:32 am

Sounds like you should trust your instincts and delay buying a motorcycle until you can easily pay for it with cash. Unnecessary debt and the associated interest is a real drag on your lifestyle and financial security. You've got $25k, don't blow it.

Getting a credit card and paying it off monthly (no balance carried over, no interest) would be a better alternative for building a credit history. The credit card might not have to be secured if you have a job and a clean credit history.

N10sive
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Re: Should I get a loan for a motorcycle?

Post by N10sive » Wed Apr 04, 2018 11:35 am

Your situation maybe different since your in Alaska, meaning the cost of a used motorcycle might be high. In the states a motorcycle loses its value pretty fast and can find 5 year old motorcycles for less than 5k(varies by type). So even an older one you could find for 3k. Financing for a used motorcycle is also high. Also depending on mileage motorcycles need more maintenance than a car and expensive depending on how much you drive it.

I would do as you suggest and wait another year until you can pay cash for one. Plus insurance at your age(assuming around 25-30) will be high as well. So depending on your cash flow it could become an expensive purchase.

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bottlecap
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Re: Should I get a loan for a motorcycle?

Post by bottlecap » Wed Apr 04, 2018 11:50 am

Not smart.

If you must buy one, pay cash.

You could also buy a car and a motorcycle if you buy less car.

JT

BrooklynInvest
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Re: Should I get a loan for a motorcycle?

Post by BrooklynInvest » Wed Apr 04, 2018 6:44 pm

Afghanistan? Thank you for your service young man! Couple of suggestions from a long time rider -

Since you're gonna need a car and a bike, your transportation budget is what it is. Divide your cash/loan/total spend as you see fit. Don't see how it makes any difference if rates are similar. BUT . . .

If you've never owned a bike before, I wouldn't go expensive. A cheap, used bike of appropriate size and decent service interval (important) will serve you well for a year or so. If you enjoy it and find you're using it, then trade up a bit.

Strongest possible suggestion - take a full safety course to get your license. Usually a weekend with the test at the end,. The license test itself is very easy to pass and every rider needs more experience than that.

Boglehead tip: You'll get a break on your insurance for several years as a result.

Best of luck! Enjoy!

blastoff
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Re: Should I get a loan for a motorcycle?

Post by blastoff » Wed Apr 04, 2018 8:18 pm

Used.

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Alexa9
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Re: Should I get a loan for a motorcycle?

Post by Alexa9 » Wed Apr 04, 2018 8:32 pm

Alaska is not motorcycle country. I'd get a reliable used truck and dirt bike.

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EyeYield
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Re: Should I get a loan for a motorcycle?

Post by EyeYield » Wed Apr 04, 2018 8:37 pm

The good thing about Alaska, for buyers, is that the riding season is short. Couple that with the fact that a great deal of motorcycle purchases are impulse buys and you will usually find used bikes with very low mileage in very good condition in cold climates. Riders may realize that they aren’t getting much use from them and want to dump them after a few years. (Hardcore riders will find a way to ride in almost any conditions year round.)

Depending how cash poor sellers are, they may be willing to take a hit to get some cash, so negotiate, but find a mechanic to check it out before you buy.

Do you want a cruiser style, touring, sport bike, trail bike or on/off? On/off referring to a street legal bike that’s set up for off road also.

Check out craigslist or Alaska’s list for deals.

Here are a few for under $10k.
http://alaskaslist.com/1/posts/10_trans ... torcycles/

A few more.
https://anchorage.craigslist.org/search/mca

You don’t need a loan, so build your credit with a CC.

The Motorcycle Safety Course, mentioned above, as well as more advanced courses is a good idea. Especially considering the
abrupt changes in terrain one might find in Alaska.
For example: Tooling down a big right hand sweeper on a dry road on a sunny day when the road goes into a shaded area that may be wet with leaves or a patch of ice - or worse, moose dung - oops.

Check the Motorcycle Safety Foundation for courses. I believe they offer courses for military as well - might be free for the military.

Enjoy the ride!
"The stock market is a giant distraction from the business of investing." - Jack Bogle

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TimeRunner
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Re: Should I get a loan for a motorcycle?

Post by TimeRunner » Wed Apr 04, 2018 8:56 pm

Find a garage queen, lightly used, and pay cash. If you can't afford it without a loan, don't buy it until you can. As you say, your car comes first, and you will have other unexpected expenses you haven't yet thought of that will need to be covered.
One cannot enlighten the unconscious. | "I like people - I just don't want to be around 'em." - Russell Gordy

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whodidntante
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Re: Should I get a loan for a motorcycle?

Post by whodidntante » Wed Apr 04, 2018 9:28 pm

If you decide to buy a car and a motorcycle, you would be better off getting a loan for the car, and paying cash for the bike. The reason is that motorcycle loans are usually high interest, because the bank REALLY doesn't want to repo your motorcycle. It's hard to do, and then they have to sell a motorcycle.

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EyeYield
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Re: Should I get a loan for a motorcycle?

Post by EyeYield » Wed Apr 04, 2018 9:55 pm

Alexa9 wrote:
Wed Apr 04, 2018 8:32 pm
Alaska is not motorcycle country.
Alaska has some of the most sought after motorcycle roads in the country, both on and off.
"The stock market is a giant distraction from the business of investing." - Jack Bogle

Slov
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Re: Should I get a loan for a motorcycle?

Post by Slov » Thu Apr 05, 2018 1:29 pm

Hmm okay thanks all! I really want to get one, but I guess I will have to wait 6 or so months until I can buy the bike. I am trying to pay cash for the car and hopefully get it for 7-8k instead of 10. That way I can put 2-3k towards my motorcycle fund. Alaska has some great roads and has awesome adventures for motorcycles. My ex gf and her family have 4 BMW GSR adventure bikes and love them!! I certainly am considering one of those and a Ducati Monster!

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Meaty
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Re: Should I get a loan for a motorcycle?

Post by Meaty » Thu Apr 05, 2018 1:31 pm

Slov wrote:
Wed Apr 04, 2018 11:26 am
Im coming home from Afghanistan in a few months here, and I am looking at vehicles to buy since I lived in Alaska for the first year without a car. Im coming back with 25k. I am putting 10k towards my emergency fund. I have no debt, and I fully max my Vanguard TRF 2060 each year. I will be increasing my TSP from 5 percent to 15-20 percent once I get back. I will have 15k to play with, but 5k will be allocated towards non vehicle purchases.

So, this leaves me with 10k to pay cash for a vehicle. Now, I have wanted a motorcycle for a very long time. I dont have a car so I need to get one before a motorcycle since Im in Alaska. However, would it be smart to get a loan for a used motorcycle? I have no credit and I am seeking a way to build credit in a low total amount. I feel that this could be too much and not the smartest way to build credit. I feel a smarter way to build credit is a secured card that a I pay off every month. I think I know what I need to do, but I am looking for advice on credit building and this idea of a loan. I really dont like going into debt and I am very hesitant to even do this. I dont like it. I wouldn't mind living without a motorcycle for another year or so.
If you’re a reservist look into a lease. You can terminate at no cost the next time you are called up (see Servicemember Civil Relief Act).
"Discipline equals Freedom" - Jocko Willink

-buzz-
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Re: Should I get a loan for a motorcycle?

Post by -buzz- » Thu Apr 05, 2018 4:19 pm

Slov wrote:
Thu Apr 05, 2018 1:29 pm
Hmm okay thanks all! I really want to get one, but I guess I will have to wait 6 or so months until I can buy the bike. I am trying to pay cash for the car and hopefully get it for 7-8k instead of 10. That way I can put 2-3k towards my motorcycle fund. Alaska has some great roads and has awesome adventures for motorcycles. My ex gf and her family have 4 BMW GSR adventure bikes and love them!! I certainly am considering one of those and a Ducati Monster!
Short answer: Don't buy a motorcycle on credit.

Full disclosure: I love motorcycles and am a former BMW GS rider.

Saving and paying cash for the motorcycle is your best plan. You don't want to be saddled with year-round loan and insurance payments while only enjoying the bike during the short riding season in Alaska.

Your prior post indicated that a car was a necessity for you. A motorcycle is a luxury. (A super awesome luxury, but still.)

Don't compromise a necessity in favor of a luxury. There are more options for good $10k vehicles than what you find for $7k.

Buy the best, most reliable vehicle you can get for $10k. Hopefully, that vehicle should last longer and have fewer near term repairs. Save up additional funds for the motorcycle from future income. Don't give up the goal. Just postpone it.

When you've met your other obligations and can pay cash for the motorcycle and good safety gear, go buy yourself a bike.

Carter3
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Re: Should I get a loan for a motorcycle?

Post by Carter3 » Thu Apr 05, 2018 6:25 pm

Been there done that when I was in my twenties my older self says pay cash for bike

dknightd
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Re: Should I get a loan for a motorcycle?

Post by dknightd » Thu Apr 05, 2018 6:41 pm

Slov wrote:
Wed Apr 04, 2018 11:26 am
Im coming home from Afghanistan in a few months here, and I am looking at vehicles to buy since I lived in Alaska for the first year without a car. Im coming back with 25k. I am putting 10k towards my emergency fund. I have no debt, and I fully max my Vanguard TRF 2060 each year. I will be increasing my TSP from 5 percent to 15-20 percent once I get back. I will have 15k to play with, but 5k will be allocated towards non vehicle purchases.

So, this leaves me with 10k to pay cash for a vehicle. Now, I have wanted a motorcycle for a very long time. I dont have a car so I need to get one before a motorcycle since Im in Alaska. However, would it be smart to get a loan for a used motorcycle? I have no credit and I am seeking a way to build credit in a low total amount. I feel that this could be too much and not the smartest way to build credit. I feel a smarter way to build credit is a secured card that a I pay off every month. I think I know what I need to do, but I am looking for advice on credit building and this idea of a loan. I really dont like going into debt and I am very hesitant to even do this. I dont like it. I wouldn't mind living without a motorcycle for another year or so.
You have already answered your own question. If you want to build credit take out a few credit cards, then don't use them much. Pay off the balance every month. I'm going to be a little contrarian here. If you want a bike, buy it. You only live once. If you can walk to work you do not need a car. You can ride the bike when weather conditions permit. Else walk, or take the bus.

obgraham
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Re: Should I get a loan for a motorcycle?

Post by obgraham » Thu Apr 05, 2018 10:44 pm

Decidedly unboglehead opinion here:

You're coming back from Afghanistan.

Buy whatever the hell you want. Loan if necessary!

rtr-molar-doc
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Re: Should I get a loan for a motorcycle?

Post by rtr-molar-doc » Fri Apr 06, 2018 8:33 am

Slov wrote:
Thu Apr 05, 2018 1:29 pm
Hmm okay thanks all! I really want to get one, but I guess I will have to wait 6 or so months until I can buy the bike. I am trying to pay cash for the car and hopefully get it for 7-8k instead of 10. That way I can put 2-3k towards my motorcycle fund. Alaska has some great roads and has awesome adventures for motorcycles. My ex gf and her family have 4 BMW GSR adventure bikes and love them!! I certainly am considering one of those and a Ducati Monster!
Borrowing money should be restricted to things you really NEED, not thing you really WANT. I really really wanted a Corvette when I was practicing dentistry(and had the money), but it was a WANT. I had more important things that needed the money spent on ie NEEDS. Delayed gratification is AMAZING and I hope you realize that before borrowing for a WANT.

tech_arch
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Re: Should I get a loan for a motorcycle?

Post by tech_arch » Fri Apr 06, 2018 9:11 am

First, thank you for your service.

Short answer: First bikes should be something cheap, bought for cash.

Advice:
1. If you're not an experienced rider (and it sounds like you'd be new to riding), definitely take the MSF beginner's course. I did, and it taught me A LOT.

2. Every rider will drop their bike, eventually. It happens to everybody - two wheels aren't as stable as three or four. I STRONGLY recommend buying a beater with a smaller engine to build up your experience (my first bike was a used 250cc Ninja). This serves three purposes: when you drop it the cost isn't as bad; smaller engines mean lighter bikes, which are easier to handle; and a smaller engine helps prevent the bike from overpowering you (e.g. accidentally grabbing too much throttle and being thrown.)

Slov
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Re: Should I get a loan for a motorcycle?

Post by Slov » Fri Apr 06, 2018 9:52 am

Thank you all for the advice! I guess I will have to wait another year for so to fully pay for the motorcycle.

I rode dirt bikes as a child, but I plan on taking the MSF course again anyways since its a requirement for MIL, and on top of it its only a benefit to myself. I am 6'1 and 190lbs. So, I am hesitant to get such a small engine motorcycle. The Main bikes I am looking at and wanting to have later on in life are a Ducati Monster, BMW GSR Adventure Bike, and probably a KTM or dirtbike as well. All of those are costly so I guess I will have to go with something cheaper such as a Ninja 300 or something to learn on for the first year or two and get my skills down.

stoptothink
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Re: Should I get a loan for a motorcycle?

Post by stoptothink » Fri Apr 06, 2018 10:06 am

Slov wrote:
Fri Apr 06, 2018 9:52 am
Thank you all for the advice! I guess I will have to wait another year for so to fully pay for the motorcycle.

I rode dirt bikes as a child, but I plan on taking the MSF course again anyways since its a requirement for MIL, and on top of it its only a benefit to myself. I am 6'1 and 190lbs. So, I am hesitant to get such a small engine motorcycle.
When I started riding street bikes I was 6'1" and a 250+lbs. D1 football player. First bike was a Ninja 500. Even on a 250 you will have zero issues keeping up with 95% of vehicles on the road up to 70mph. Their cheap to buy, insure, fix, on gas, you won't be that annoyed when you dump it, and it isn't that much different than tossing around a dirtbike.

tech_arch
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Re: Should I get a loan for a motorcycle?

Post by tech_arch » Fri Apr 06, 2018 4:01 pm

Slov wrote:
Fri Apr 06, 2018 9:52 am
I am 6'1 and 190lbs. So, I am hesitant to get such a small engine motorcycle.
I'm 6' and was around the same weight when I had my 250. I had no trouble keeping up with city traffic and could easily do highway speeds with it. If I could buy another bike it'd probably be a 500cc sport bike.

GAAP
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Re: Should I get a loan for a motorcycle?

Post by GAAP » Fri Apr 06, 2018 5:05 pm

stoptothink wrote:
Fri Apr 06, 2018 10:06 am
Slov wrote:
Fri Apr 06, 2018 9:52 am
Thank you all for the advice! I guess I will have to wait another year for so to fully pay for the motorcycle.

I rode dirt bikes as a child, but I plan on taking the MSF course again anyways since its a requirement for MIL, and on top of it its only a benefit to myself. I am 6'1 and 190lbs. So, I am hesitant to get such a small engine motorcycle.
When I started riding street bikes I was 6'1" and a 250+lbs. D1 football player. First bike was a Ninja 500. Even on a 250 you will have zero issues keeping up with 95% of vehicles on the road up to 70mph. Their cheap to buy, insure, fix, on gas, you won't be that annoyed when you dump it, and it isn't that much different than tossing around a dirtbike.
It's also a lot easier to pickup a 250 that you've dumped in the dirt than any of the BMW GS or similar bikes that weigh twice as much. I love my GSA, but at 600 pounds, it's a real bear to get back off the ground. I have friends on a Round-The-World trip that swear by DRZ-400s, even though they also own 1200GSs. If you work on your own vehicles, there's always the CSC RX3 Adventure (250cc) for consideration at $4,195 new -- plus shipping to Alaska or pick it up for free in California, or $150 for a crate and free shipping to the lower 48.

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jabberwockOG
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Re: Should I get a loan for a motorcycle?

Post by jabberwockOG » Fri Apr 06, 2018 11:05 pm

1. Thank you for your service.

2. Buy a used bike - they are abundant and cheap. Buy a smaller bike that what you think you "need" and learn to ride and get experienced on that. Even as an ultimate bike for an experienced rider no one needs more than 750-1000cc on any style bike these days unless they are trying to impress others.

3. Also be very clear eyed and think hard about buying an extremely dangerous, completely unnecessary toy that results in horrible sometimes fatal injuries, can leave you with severe brain damage, completely disabled, and/or in a wheelchair for the rest of your life - and with so many distracted and texting drivers most of the time these accidents will happen thru no fault of your own.

Slov
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Re: Should I get a loan for a motorcycle?

Post by Slov » Sat Apr 07, 2018 7:26 am

Thanks for the help all. I figure now if I get a bike its going to be a cheaper 250 or 300cc motorcycle to learn on. I do have a big desire to get into riding again, however dirt bikes are different than being on the road and around cars with people texting. Quite frankly that does worry me since I can have an equal amount of fun jumping out of planes, shooting guns, and driving sports cars and are much safer activities when you are safe.

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