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Why Finance When I Have Cash?

Sep. 23 2019 Finance and Insurance By Van Eiseman

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Are you the type of customer that has the cash on hand to pay for a motorcycle, ATV, side-by-side or personal watercraft? Why finance the purchase of your new Honda Gold Wing when you can pay for it upfront? Let's look at the question "Why should I finance a depreciating asset?"

How about an example. Let's say you had $20,000 cash to buy a motorcycle or side-by-side. If you finance that $20,000 Yamaha YXZ1000R purchase at 3.99% interest on a 5-year loan, you will spend $22,094 throughout those 5 years. If you had taken that $20,000 in cash and put it in a bank account (don't touch it - that's the key) that earns 2.0% interest at the end of 5 years you would have $22,101. Nearly the same amount right? The difference being one is a dividend in your pocket and the other is a charge paid to a lender.

Financing gives you a few other perks:

  • GAP gives you 100% asset coverage. If a unit you paid cash for is stolen you only get what your insurance company gives you. If you have financed your vehicle purchase and added GAP, you will get that plus whatever you still owe. That means they paid out more plus your cash is still liquid.
  • Liquid cash is power. If you need the money it is a lot easier to pull cash out of the bank than it is to try and sell your WaveRunner. If you are selling your ride and need it done in a hurry you have less time to find the right buyer willing to give you what it is worth.
  • No matter how good your credit is it can always get better. Even people with 850 credit scores continue to have multiple open lines of credit to keep it strong. We have access to not only the national OEM lenders but a whole array of area credit unions and financing companies to find the best rates available to you.
  • If you have poor credit, we have access to many lenders that can help you reestablish and rebuild your credit. Cash is king, but there are ways you can finance a vehicle and pay very little interest while still building the maximum amount of credit. (That’s a story for another time).

We understand that every financial situation is unique. Our goal is to find the solution that is right for you. Let's talk about what makes the most sense for YOU.

Life’s an adventure. Your journey starts here at Beaverton Motorcycles. Reach out to a Product Specialist today!