So, you’ve decided to get a sportscraft. Congratulations! Whether you’re looking for a motorcycle, an ATV, a jet ski, or some other sports vehicle, you’re bound to be embarking on an exciting adventure.
While most people think of recreational vehicles as being less expensive than cars—and they typically are, unless you’re getting an ultra-high-end sportscraft or a very cheap car—they’re still usually hundreds to thousands of dollars. If you’re anything like most Americans, dropping three, four, and especially five figures on a single purchase isn’t really feasible all at once. You could put it all on your credit card, but thousands of dollars on a high-interest card tends to be a bad combination for your financial planning.
The good news is that, like for a car purchase, many banks and credit unions will also offer loans for sportscraft purchases, and they’ll almost certainly be at much more affordable interest rates than you’d find if you put the whole thing on a credit card. But as with a car purchase, you’ll want to make sure you’re doing your due diligence and thorough research before you sign on the dotted line.
Here are just some of the questions you should be asking potential loan providers—and yourself—while shopping for a motorcycle loan, ATV loan, or other sportscraft loan.
Who Is Financing Your Loan?
Before you get a motorcycle loan or other sportscraft loan, you’re going to need to know who you’re getting it from. While you could always go to a big bank, there are other options you should consider.
- Dealership Loan: It would be very rare to find a dealership who offered a loan on its own, and we’d probably consider that a conflict of interest, but most dealerships for motorcycles and other sportscraft typically have a list of approved lenders and financiers you can approach about financing your sportscraft loan. Do note, however, that dealerships often get a commission on these loans and so may be aggressive in pushing them—even if they aren’t the best deal.
- Manufacturer Loan: Depending on the manufacturer of your chosen recreational vehicle, you may be able to secure financing directly through them or their approved financier. For instance, if you’re interested in buying a Harley-Davidson, you can get a motorcycle loan straight from the manufacturer. This often includes extras, like motorcycle gear, which may not be available in other types of financing.
- Credit Union Loan: Credit unions are nonprofit organizations that are typically able to offer better service and better rates than major banks can; a bank is beholden to its shareholders, but to a credit union, its shareholders are its customers. A downside might be that credit unions typically require membership, which can come with requirements like living in a certain neighborhood or region, but it’s usually a simple process to join a credit union, so worth looking into.
- Bank Loan: Of course, you can always go to a large bank if that’s what you prefer. Banks certainly have the resources to provide a loan of this kind. However, not all banks offer specific loans for motorcycles, ATVs, jet skis, and other specialty vehicles. Wells Fargo does, for example, whereas banks like Chase and Capital One do not. You may be able to get them as a secured personal loan, but that’s by no means a sure thing.
What Is the Interest Rate?
Chances are, you were going to be asking this question anyway. Most people know that the interest rate is one of the key elements of any loan, and you’ll definitely want to make sure that the rates you’ll be paying are fair and within your budget. Remember to consider the total amount you’ll be paying and compare rates between vendors. For example, credit union interest rates are less than bank rates, so this might be your best option.
What Is Included in the Loan?
When you’re picking up a new motorcycle, ATV, jet ski, or other recreational vehicle, you’re probably not just going to get the vehicle itself. You’re probably going to get everything that goes with it: a boat trailer for your jet ski, a set of motorcycle leathers and a helmet, a manufacturer’s warranty, or any number of accessories.
Some financiers will include options to get some or all of these, while others will only include the direct cost of the sportscraft itself. Manufacturers are more likely to include these in a motorcycle loan or ATV loan, and large banks tend to be less likely, but it is something that should be determined on an individual basis.
What Is the Loan’s Collateral?
Ideally, you’ll be able to pay off the loan in the agreed-upon amount of time. However, life is unpredictable, and while nobody ever wants to be delinquent on a loan, it’s always wise to consider worst-case scenarios so you can be prepared for them in the event that they occur. Better to plan and not have it come to pass than not plan and have it happen.
Most of the time, if you default on a loan, the lender will repossess the vehicle in question. However, it may be the case that the lender will require extra collateral, which could be at risk in the event that you can no longer make payments on the loans.
And while a large, national bank is unlikely to budge when you’re about to default on your loan, keep in mind that a credit union is more focused on its members, which include you. You might be able to negotiate options besides defaulting.
Can You Pay the Loan in Full Before It’s Due?
On the other end of the “unexpected events” spectrum, it’s possible that you might come into extra money and want to pay off the loan with one big lump sum. However, some lenders prefer that you stick to the agreed-upon payment plan and will charge a fee if you pay the loan off early. So check on this before you sign.
What Extra Fees Are Included?
It’s always worth examining what else might be included in the loan other than interest rates. Be sure to ask what other hidden fees might exist, so you don’t get caught unaware.
What Legal Requirements Are There?
Be sure to look into local and state law in your region before you pursue a loan for a recreational vehicle. While it is entirely probable that you won’t need to do anything extra, depending on the region, you may need to have plans for insurance or other legal requirements before you can be approved.
If you’re interested in getting a loan for a motorcycle, ATV, jet ski, or other vehicle, contact Central Willamette Credit Union for a recreational vehicle loan. We offer convenient, affordable financing for all sorts of specialty vehicles. We look forward to hearing from you!
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