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Discussion Starter · #1 ·
I have always noticed that in the UK magazines they offer financing on bikes. Although I think it is crazy, and I would probably take full advantage of the craziness, is there anywhere in the US that does this. Online sellers possibly?
 

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The Trek and Cannondale/Specialized dealers near me both offer financing.

I just went out and got a Chase Visa with 15 months no interest (provided the mininium monthly payment is paid on time, which is roughly 4% of the balance). It's the only way I could afford the bike I bought 2 weeks ago. I plan on taking full advantage of the 15 months. Perfect for online purchases.
 

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Discussion Starter · #3 ·
A credit card is one way of doing it for sure. I also wonder if they report to the credit bureau. I bought a paint sprayer on store credit once and was told that they don't report anything unless it is something bad. I just wonder the ins and outs. This could be a way for my younger brother to start building a credit history without a cosigner.
 

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LBS around here uses Citi Retail Services for consumer financing on bike purchases. So, it hits your credit report just like any other line of credit.

That's not necessarily a bad thing, though. Paying it on-time would build positive credit.
 

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Unless there is a 0% financing there is no reason to finance, by the time you are done you ended up paying so much more. Like nachomc said, you probably can't afford it...
 

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I don't even like buying cars on credit. Being in debt for a bicycle? Can't see it. You will pay for it in the end, so why not simply save up and save the money in the first place by paying cash?
 

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Discussion Starter · #9 ·
What you guys are saying is all fine and good but for the price of bikes now a days not many people can't afford it. If I didn't use my credit card to buy my bike I would have never started riding. There would have always been something else that needed my attention. At least this way I could work it into my budget.

I know a lot of people are in the same boat.
 

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nachomc said:
If you have to put your bike on a CC/financing to buy it, you can't afford it.
Reminds me of the Saturday Night Live skit...

http://consumerist.com/consumer/clips/snl-skit-dont-buy-stuff-you-cant-afford-252491.php

Really, going into debt is such a rite of passage in our country today. Even the federal government can't get enough of it!

Yes, just about anyone can afford to buy a bike. You just need to learn how to shop and maybe learn how to fix something when it doesn't work, My first mountain bike was $60 (brand new at a police auction) and I rode the wheels off of it and it put a big smile on my face.

Now, I am not saying that $60 bike is as nice as what I have now, but at the time, the bike you are riding is the only bike that matters.
 

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I just can't imagine someone needing a $4000 bike for a first bike. And financing a $500 bike just doesn't seem reasonable. Don't take me wrong, you can use Credit Cards to your benefit, darn, I use my Credit Card almost exclusively, but I DO NOT buy anything I can't pay off by the end of the month.

If you do it wisely you can earn a lot of benefits with a CC, miles, points, etc. My first Plasma TV was earned by points from my AmEx. Credit Card companies don't like it when you pay your debt. Most credit card companies have a grace period where they do not bill you for any interest (usually for a month, now recently AmEx has a program where they don't charge you for 2 months). If you don't have a CC with a grace period, get rid of it.

But again, just paying $1 in interest is a waste of YOUR money. And usually financing for "toys" is not 5% or 10%, its usually 15%, 21% or more. Car companies usually have to give you 0% financing if they need to get rid of stock that doesn't move, like trucks right now, and usually that kind of financing is provided by the manufacturer themselves; "toys" on the other hand are usually financed through a third party, so no discounts.
 

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Discussion Starter · #12 ·
I aggree you shouldn't be blowing a huge amount on cash but there is a big difference between a $500 bike and a lets say $1500 bike. And the components on the $500 are for the most part crap.
It is just another option you know. I finance a car because I need it as a mode of transportation, what if I commute more than I drive. . . .which is the considered the toy? If I have to pay a little interest to get a toy then at least I am doing it on something I love versus something I hate having to have.
Most of the financing deals I see in the magazines are 0% anyway. I was more just interested in a conversation about it. Personally I am maxed out with bikes. 3 mountain and one road, I am good to go.
 

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Wow, I can't believe this!

Why would anyone go into credit debt for a bike? Or a car, for that matter? I can see it for a house, since that really is the only way to afford one unless you are rich, or you win the Lotto. Save up a couple grand, or whatever it costs, then pay cash. After 40+ years of credit cards and buying on credit, I have finally paid off all credit debt and no longer have the unhealthy stress of having to work hard, then give most of my money to someone else. If I can't pay cash for it, I don't need it until I get the cash. Most won't listen, but I wish I did this 20 years ago, I am now 58 and haven't had to work since I was 55. I have a Felt and two Treks that I paid cash for.
 

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Well this is where you get into more specifics and it make more sense, I was just talking in general. I just don't see a first time rider spending $1000+ for a bike.

And of course you get what you pay for. I got into riding just about a year ago (after a 12+ year of no riding) and I bought one of those $500 bikes (well around $600 + upgrades... you know how that goes). I was drooling over that $3000 bike, but I wasn't sure if I'm going to like it like when I was only 15 years old.

I look at things as are they worth it? I had a $60 Wally World bike before that I rode for less than 2 miles in 2 years. So that Walmart bike came actually more expensive than my current bike. I also don't mind upgrading it because i use it (of course it would have been nicer to spend $1500 up front, but what if I didn't like riding?)

I'll look into that 0% financing though as I wasn't aware that they had that for bicycles. For Motorcycles they are outrageous and I forked out cash I saved for my bike because I didn't want to pay unreasonable rates. In my opinion, anything over 9.9% is unreasonable but banks take advantage of peoples general brokenness.


Just for the record, most people couldn't afford buying a car in cash anyways, there is I guess a certain cutoff line of what is reasonable to finance and what is not. Also car rates are a lot lower than most other financing options. I financed my car with a 1.9% rate (which I think was good), i just don't have $40k laying around anywhere. ;) I wish i did...
 

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Very interesting discussion here getting to the core of one's fiscal intelligence and acceptance.

Personally I think it would be fine to finance something that was stupid expensive- if you use it like it's your job (not to get it just to say you have it). I caught up with a buddy who just invested in $11k in camera gear to start his own gig. He still waits tables and the like to pay the bills, but he is USING the gear.

Also, you should be as smart as you can be. For a first bike? No way. For someone planning on racing seriously? Absolutely. Or you could combine all of it and just be smart. I am riding a $4k bike. Can I afford that? HELL NO! So I put it on a low interest card and got it as a leftover brand new for $1700 (exactly within my budget).

IMO, set a budget, keep to it and evaluate how much you will actually use the toy as a means of justification for the budget- or it may not even be a toy if you commute or the like on it like I do. I actually think about the fuel I'm saving by riding mine to the office now as money saved (probably a couple hundred at least at this point in the past couple months). And my regular motorized transportation is a motorcycle (that I financed). :D
 

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Spend less then you earn and it's not a problem.

My thinking is that you should always spend less then you make , not spend more and be in debt. Obviously for most people they have to borrow money for a house , so in my mind that doesn't really count.

The more money you make the easier this is to achieve, but long term people who make lots of money but spend more money then they make are worse off then people who don't make much money but manage to save.

I think that someone who borrows money to buy a nice bike is someone who spends more money then they make and will likely always be in debt, and will be in trouble when they can no longer work.
 

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Discussion Starter · #17 ·
If my brother went this option it would be to build credit more than anything. If it is 0% then there isn't any harm IMHO as long as he watches his budget. It would also not be his first bike. I bought a $500 Gary Fisher about a year ago and the crap components are constantly screwing up and holding up progress on the trail as well as fun. Mind you he ride hard and isn't nice to his bike and that is why I suggested he get a better build. The current frame is to damn heavy to bother upgrading and now that he know he loves it why no put a bit more into it.
 

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texas said:
My thinking is that you should always spend less then you make , not spend more and be in debt. Obviously for most people they have to borrow money for a house , so in my mind that doesn't really count.

The more money you make the easier this is to achieve, but long term people who make lots of money but spend more money then they make are worse off then people who don't make much money but manage to save.

I think that someone who borrows money to buy a nice bike is someone who spends more money then they make and will likely always be in debt, and will be in trouble when they can no longer work.
So just because someone buys a bike on credit they are automatically spending more than they make?

That's a generalization, and an incorrect one at that. Mind you I paid cash for my recent bike ($700), but I can totally see someone using a low or no interest credit card to purchase a bike. Face it, bikes are expensive, and some people don't want to save $50 a week for a year to buy a bike. That same person could buy a bike on credit, pay $200 a month (coincidentally, $50 a week) and own the bike in a year.
 

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Lay-Away

It's been said already. but I think many people, regardless of income, have a problem saving their money. Sometimes it's not about "affording" something, I think many out there would be surprised at what they could afford if they saved their dough a bit. I mean think about it, how many of you have a friend or an acquaintance who complains about money, yet buys their Starbuck's religiously every day, etc.

Bottom line is that the draw of instant gratification takes effect, and you end up financing a bike. Now like I said, many have a problem saving, so they justify financing a bike. But a sensible alternative is putting the damn thing on lay-away if you feel you can't plunk down the big coin right away. Most shops do this, and it's a way to break up paying for the bike to ease the pain, yet when you get the bike it's all yours, no interest, and much more satisfying. I think this would work for those whose money always burns holes in their pockets....An added benefit of course is that if you find a good deal, you lock in the price, expecially now as model years are about to change.
 

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denmikseb said:
Why would anyone go into credit debt for a bike? Or a car, for that matter? I can see it for a house, since that really is the only way to afford one unless you are rich, or you win the Lotto. Save up a couple grand, or whatever it costs, then pay cash. After 40+ years of credit cards and buying on credit, I have finally paid off all credit debt and no longer have the unhealthy stress of having to work hard, then give most of my money to someone else. If I can't pay cash for it, I don't need it until I get the cash. Most won't listen, but I wish I did this 20 years ago, I am now 58 and haven't had to work since I was 55. I have a Felt and two Treks that I paid cash for.
Quite simply, if there is 0 percent interest there's not reason NOT to use somebody else's money really. Obviously if you're paying interest it's a waste of your money. BUT if there's zero interest and you pay it off before it accrues any interest you are actually spending LESS money. Basically the 1500 dollars you were loaned is worth less at the end of 15 months or whatever the no-interest period is than it was worth when you initially purchased it, simply due to inflation. In other words your dollar is going further.
 
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