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Taking Out A Loan For New Bike

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Taking Out A Loan For New Bike

Old 02-22-17, 11:09 AM
  #51  
dipy911
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Originally Posted by mconlonx View Post
I don't know if Trek is still doing it, but they did have an offer where you could get a Trek card and use it to finance your purchase. Interest free if paid off in full before the first year, but if you did not pay it off completely by that first year, you get socked will all the interest.

This is what I did several years ago. Around $100/month no interest. No brainer. Sign me up.
Trek 7500FX This will probably show you how long ago I got it.
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Old 02-22-17, 11:10 AM
  #52  
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Originally Posted by andr0id View Post
Wow, you can still deduct interest in Canada?

In the US, we have only been able to deduct interest for primary home loan for decades.
No, interest is not deductible, not even on mortgage of your primary residence, unlike you folks in the U.S. Only circumstance where it is deductible is if you borrow the money to invest, say for a rental property or stocks.

I was just illustrating a point that the chap with the Nissan didn't care if the interest wasn't deductible.
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Old 02-22-17, 11:22 AM
  #53  
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Originally Posted by andr0id View Post


Hmmm, I did just get an offer from my CU for a 0% interest on purchases and balance xfers for 18 months if I sign up for their CC. Maybe I should get a new MTB?

You wouldn't get any push back from me ,I'm an enabler by nature - your spouse may have other issues

I'd never tell anybody what to do with their own hard earned money unless it was a friend or family member that looked like they would actually be putting themselves in peril or degrading their quality of life. For instance, if it was my young nephew who bought the $42,000 Nissan someone referenced, -- then I might try to give him a cautionary tale or two
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Old 02-22-17, 06:31 PM
  #54  
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What a foolish cyclist. How much was the loan for ??
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Old 02-22-17, 07:33 PM
  #55  
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Originally Posted by Kindaslow View Post
My wife and I have done well financially. Yet, we still use cash for every weekend, the workweek, and on many trip. We plan what we believe is reasonable, then if we run out we are done. I watch people use cards for coffee, meals, etcetera. If they can pay them off each month, great. If they can't, it is kind of crazy.
My Capital One card gives me 1.5% back on all purchases so everything goes on that card. I mean everything from groceries, restaurants, Home Depot, movies, Nashbar etc. At the end of the month, I call Capital One to retrieve the funds from my checking and I get about $25.00 dollar reward each month. After two months, that pays for dinner!

However, I would never do this carrying a balance which is what they really want you to do.
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Old 02-22-17, 09:20 PM
  #56  
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Originally Posted by king_boru View Post
It isn't uncommon. The majority of people don't have $10k+ just sitting around let alone $5k. If you know you can make the payments and need to build credit then a small loan for something you want isn't a bad way to do it.

And really, why care what someone else does.

I would think that somebody who cannot afford cash should not be buying a $10,000 bicycle (or insert whatever $X,XXX amount). Nor do they need a $10,000 bicycle though they might want one. Wanting and needing are not the same thing. That is why they cannot afford cash and will likely never be able to pay cash because they spend all of their money satisfying instant urges for gratification and paying it out in interest.

And I will just say it, nobody, with the exception of some few elite athletes, needs a $10,000 bicycle.

I guess I am old fashioned.
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Old 02-23-17, 10:09 AM
  #57  
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The $10,000 figure has been bandied about but the actual amount financed was never specified by the OP. It could have been $500 or $1000.

The old fashioned way to do it would be to set some money aside each month until you have enough. 0% financing is almost the same thing as long as you pay within the specified period plus you get the bike right away instead of waiting. However, you lose flexibility if something were to come up that makes it difficult or impossible to set the money aside. With the old fashioned method, you'd put off the purchase. With financing you're subjecting yourself to interest or worse.

Personally I don't see a problem with buying something this way if it's really important to you and if it's well within your ability to pay it back. It could be a serious problem if you habitually purchase things by financing.

If I had a golden opportunity to cross something off my bucket list, then I'd be willing to finance it. A new bike doesn't rise to that level for me but it might for others.
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Old 02-23-17, 12:48 PM
  #58  
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Originally Posted by bmthom.gis View Post
Oil. I met plenty of easter coasters who had moved from NS, and heard there are lots that will travel to the plains just for work. Not my cuppa tea there. I feel strange if more than a few hours from the coast. I mean, Lloydminster at least had a Timmies and Canadian Tire - they are on the map!
Isn't Fort MacMurray the second largest Newfy city in Canada? Despite the down turn in oil prices, Edmonton is still growing. And this prosperous Edmontonian just bought a new Marinoni Sportivo Ti with cash.

Last edited by Phloom; 02-23-17 at 12:52 PM.
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Old 02-23-17, 12:52 PM
  #59  
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Originally Posted by Phloom View Post
Isn't Fort MacMurray the second largest Newfy city in Canada? And despite the down turn in oil prices, Edmonton is still growing.
I wish I had a chance to see more of Edmonton than just the airport. Googling it, it looks like a pretty cool city. There's a chance I'll be back in the spring, if so, I'll schedule an extra day to explore it a bit.
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Old 02-23-17, 12:57 PM
  #60  
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Originally Posted by bmthom.gis View Post
I wish I had a chance to see more of Edmonton than just the airport. Googling it, it looks like a pretty cool city. There's a chance I'll be back in the spring, if so, I'll schedule an extra day to explore it a bit.
PM me when you know what day and I can give you a guided tour.
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Old 02-23-17, 12:58 PM
  #61  
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Originally Posted by Phloom View Post
PM me when you know what day and I can give you a guided tour.
You Canadians are so nice...thanks, I shall!
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Old 02-27-17, 09:39 PM
  #62  
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Maybe it is just me but I think only suckers apply for credit for anything except for a mortgage or obtaining a post secondary education. I would rather buy a slightly cheaper bike as long as it meets the needs I am using it for.
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Old 09-20-22, 10:04 AM
  #63  
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Super old thread i know, but i am thinking about the same thing right now.
I don't have enough cash to buy "bike of my dreams" but can easily do it with the credit.
Is it worse it or should i wait couple of months and save up for it?
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Old 09-20-22, 01:36 PM
  #64  
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We've always taught our kids that you NEVER EVER finance a toy. Well then what is a toy? Is it a roof over your head? Is it food so you don't starve? Does it get you to work and back so you can keep income coming in? If its not one of those three things, it is a toy. If you already have those three things, and it is another version of one of them, then it is a toy. Period.
Furniture - toy
Stereo - toy
Clothes - toy
Fancy dinner - toy
and the list goes on...

Not saying you can't have all the fun nice things, but if you have to finance it you better decide if its a toy or not. For me, I abhor debt. I learned the hard way as a young unsupervised adult about the power of compounding interest. Fortunately, my lesson only took a few years to solidify. I probably bought that stereo 4 times over....
Never finance a toy.
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Old 09-20-22, 09:53 PM
  #65  
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I'll never buy a new bike.
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Old 09-20-22, 10:19 PM
  #66  
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Originally Posted by hollymolly View Post
Super old thread i know, but i am thinking about the same thing right now.
I don't have enough cash to buy "bike of my dreams" but can easily do it with the credit.
Is it worse it or should i wait couple of months and save up for it?
According to most people in this thread they don't have and have never had any debt or financing... Not sure how they'll ever be able to purchase a home or an auto with NO credit history...

You need credit and on time payments to raise your score. If you don't have any debt right now, or very low debt then I see no issue with financing your new bike. Some places might offer zero interest as long as you pay it off quickly. Paying off a loan with on time payments will raise your score and put you in a better position down the road to have a higher credit score and lower interest rates on large purchases like a home or a car..

Bottom line, you know your financial situation and if getting a loan for the bike makes financial sense or not..
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Old 09-20-22, 10:20 PM
  #67  
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If you lock into a low fixed-rate interest on a loan, and hit a period of inflation, you can wind up making money.
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Old 09-21-22, 04:20 AM
  #68  
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The loan was for $3K. With interest, the total amount for a five year "loan" was about 4-5K. OUCH!
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Old 09-21-22, 01:21 PM
  #69  
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Originally Posted by Smokinapankake View Post
We've always taught our kids that you NEVER EVER finance a toy. Well then what is a toy? Is it a roof over your head? Is it food so you don't starve? Does it get you to work and back so you can keep income coming in? If its not one of those three things, it is a toy. If you already have those three things, and it is another version of one of them, then it is a toy. Period.
Furniture - toy
Stereo - toy
Clothes - toy
Fancy dinner - toy
and the list goes on...

Not saying you can't have all the fun nice things, but if you have to finance it you better decide if its a toy or not. For me, I abhor debt. I learned the hard way as a young unsupervised adult about the power of compounding interest. Fortunately, my lesson only took a few years to solidify. I probably bought that stereo 4 times over....
Never finance a toy.
Thanks a lot. I think i made my decision now.
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Old 09-21-22, 01:23 PM
  #70  
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Originally Posted by Colorado Kid View Post
The loan was for $3K. With interest, the total amount for a five year "loan" was about 4-5K. OUCH!
Definitely OUCH!
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Old 09-21-22, 08:54 PM
  #71  
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Originally Posted by Colorado Kid View Post
The loan was for $3K. With interest, the total amount for a five year "loan" was about 4-5K. OUCH!
Note to self: Do not finance cycling purchase with Mafia loans.
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Old 09-26-22, 03:35 AM
  #72  
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And this is why I like the cycle to work scheme in the UK. I get a new bike/accessories/wheels/whatever, small deductions are taken out (pre-tax) of my pay for a year-18 months (so I pay less tax during this time). Win/win- and yes I do actually cycle to work with everything I purchased off the scheme (including the 45mm FFWD wheels I bought for my TT bike- sometimes there is a race after work so I commute on the TT bike).
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Old 09-26-22, 08:17 AM
  #73  
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Originally Posted by Polaris OBark View Post
Note to self: Do not finance cycling purchase with Mafia loans.
Normal credit card rates are in the high teens and $3000 at 19% APR for 5 years is $4669. Its not THAT unusual, but that doesn't mean it isn't crazy. Compound interest is a ***** if you're on the wrong side of it.

Last edited by Phatman; 09-26-22 at 11:56 AM.
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Old 09-26-22, 08:45 AM
  #74  
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Originally Posted by Polaris OBark View Post
If you lock into a low fixed-rate interest on a loan, and hit a period of inflation, you can wind up making money.
On a bike?

Let's say you financed a $1,000 bike (to keep it simple) pre-pandemic. And again to keep it simple, let's say you paid $100 in interest for $1100 total. The pandemic hits, supply chains struggle, inflation rises and more people want bikes. In fact so much so that you can sell your bike for $2,000.

That's a $900 profit, right?

Well, the $900 isn't worth what it was a couple years ago, so not really. And now you don't have a bike and if you're going to buy another one, you're going to play the same inflated prices as everyone else so there goes your $900 profit.

I'm not saying it's impossible for things to work out in your favor financially by financing something but it's not really a sound investment strategy for something that doesn't normally accrue value over time, - like property, or something that doesn't contribute to generating income.

It's not completely cut and dried. Let's say by financing a bike you can drop the health club membership because all you do at the club is ride a stationary bike anyway, - or maybe you don't even go. That could certainly work out, (ha, get it? work out?).

But IMO, you're still better off selling something to help pay for the bike or buying something less than the "dream" bike if it means you can skip the financing.

Last edited by tjspiel; 09-26-22 at 08:48 AM.
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Old 09-26-22, 12:58 PM
  #75  
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If you can get a 0% interest loan over 5 years, and inflation is 10% per year, you save.

If you can get a 3% interest loan over 5 years, and inflation is 10% per year, you still save a bit.

I'm not advocating taking out huge loans for a bike, but where I live you have to borrow over $600K to buy a fixer-upper house with 20% down, which essentially means, for most people, your bank becomes your landlord. You only win if your payments + insurance + property tax + maintenance are smaller than what equivalent rent would be. But if you take that huge mortgage at a fixed rate, and encounter a period of hyper-inflation, and your salary keeps pace (it usually doesn't), then you can come out a clear winner.

People happily take out large loans for houses and cars, and nobody cares. In fact, the economy is based on these practices. But if you take out a $5K loan for a bike, this is looked upon as financially irresponsible. Why? Because most people regard bikes as toys, (which is why they scream at you to get off the road).
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