How much u all dp for a new Cl 2 typically ~$24K bike?

[gargantua]

My house not $150K mah... cannot full cash lor.

 

Haha. Been expecting this line.

 

No la got money actually.. juz asking ard only kpo2 only..

you have the money, than wats stopping you to pay full. It makes the most sense, you won't be able to get the same returns from your 24k holdings in the same risk free way as you are with the %100 liability to pay the interest. Also, thinking about paying the full amount will give you a reality check on whether you are really ready or really want to spent 24k on a bike. Although, I can afford a 24k bike in cash, I will never buy one cause I will want to pay in full and it makes me nervous thinking most of it will go down the drain in depreceating cost alone.

[xb84]

Juz asking mah. Dos who can contribute, pls tell me lor.

 

Don't need to tell me:-

 

1) If u can downpay more, u dp more lor, better... lesser interest.

 

2) Depends on how much is ur savings lor.

 

3) U ask this qn means u sure no $ to buy Class 2 bike lor.

 

4) **anything similar to the above.**

 

newbie! dont buy first lah. wait for me!

[xb84]

newbie, u cannot ask for opinions from the general public lah, then you would be just like anyone on the road.

 

instead of figuring how much to dp for a $24k bike, i rather u pick a 4yr old cl2 at $12k+++ and pay full cash. assume u are 25yrs old, u still got more than 30yrs to ride you know, plenty of chances to own a virgin bike.

[xb84]

newbie, mkts are shaky again, put your money into the cash machine, let them help u earn dividends, that way you get capital intact and soon a bike sponsored by dividends!

[minorsage]

if possible, i will down pay as much as possible to reduce the interest paid.

 

bike's interest rate are so much higher than cars. mine was only 2.7% iirc.

 

for example,

my accord, i took a 50k loan for 3 years, now paying $1,501.39 monthly. so i am only paying around $4000 for my interest. i am sure i am able to generate much more than that with 50k in 3 years.

 

however if i chose to take a 7 years loan, and have a lower monthly installment. i will be paying almost $10,000 for my interest !!!

[xb84]

if possible, i will down pay as much as possible to reduce the interest paid.

 

bike's interest rate are so much higher than cars. mine was only 2.7% iirc.

 

for example,

my accord, i took a 50k loan for 3 years, now paying $1,501.39 monthly. so i am only paying around $4000 for my interest. i am sure i am able to generate much more than that with 50k in 3 years.

 

however if i chose to take a 7 years loan, and have a lower monthly installment. i will be paying almost $10,000 for my interest !!!

 

highlight~!

[xb84]

never let anyone earn interest from you on a depreciating asset~!

[WildCard]

Juz asking mah. Dos who can contribute, pls tell me lor.

 

Don't need to tell me:-

 

1) If u can downpay more, u dp more lor, better... lesser interest.

 

2) Depends on how much is ur savings lor.

 

3) U ask this qn means u sure no $ to buy Class 2 bike lor.

 

4) **anything similar to the above.**

 

Funny you should ask this question, for someone who can freely advice other ppl when it comes to buying bikes.

 

Nonetheless, that aside, the answer to your question is as you wrote there. Downpay what you are comfortable with.

You have to decide whether are you keeping that bike for long.

 

I won't use point 3 coz I'm not that kind of person.

I'm sure every biker has a dream Class 2 bike and that he / she will do a lot to own that dream. I happen to be one of them.

Plus d/p is a portion of owning a bike. Its still the monthly installment plus maintenance that matters more.

Of course, if you can increase d/p, then monthly installment decreases. But sometimes you don't have that option.

 

Just as a reference:

My bike costs $16227 OTR.

As I had just used up all my savings for my marriage & house, I had just some spare cash to d/p a new bike.

I chose a new bike instead of 2nd-hand as I didn't want a maintenance nightmare after 2 years, as I did with my previous bike. I wanted a long-term bike this time.

So after some shopping around, I found a shop willing to offer me 3% p.a. interest on the price above. I calculated that I can d/p $1500, an amount I can safely put, and take a long-term loan (6 years) and still pay a very low interest amount (18%). I pay only about $200+, allowing me to allocate my cash to other priorities like house and family.

Its quite difficult for the 1st year. I was earning about 2K that time and my wife barely half of tat.

I can only fantasize about aftermarket parts and relied on DIY servicing / repairs.

Yes, as you would remember, I even had to take the option of renewing my insurance by instalment from NTUC.

But now, with most of my wedding loan cleared and a better-paying, stable & permanent job (job-hopping does help, you know), I can afford to double my instalment and set it aside for other bike-related purposes or other things.

At present, I have a bike in tip-top condition (as verified by the service agent), 4 years left of instalments and no plans to sell but plans to modify further,

 

So safe to say, having a low d/p is still ok.

Just have to know what you're doing and have clear picture of what is to come.

[Guest NPNT]

A very clear and concise explanation done by our very own SBF Senior Mod. Very goods!

 

Anyway, which shop was it dat offered u 3% interest rate? Goods goods. Was it your ah-kah-liao fren oredi, previous bike shop, need to sweet-talk, or anyone will get 3% one?

[xb84]

hmm sometimes asphoon and yamaha got offer on % interest during roadshows.

[xb84]

$0 downpayment confirm con job.

 

0% interest for first year anyone hear b4? saw advert, but dont know true or not.

[Guest NPNT]

eh got.. 1 of our bros in here said before.. he bought a CBR1000RR at a roadshow.. 1st yr interest-free.. so if 5yrs loan.. its 4 x XX%.

[EJ]

hmm sometimes asphoon and yamaha got offer on % interest during roadshows.

 

yup. asphoon guys offered me that when i was asking about the fazer 1000 during the big bike fest '07.

[WildCard]

A very clear and concise explanation done by our very own SBF Senior Mod. Very goods!

 

Anyway, which shop was it dat offered u 3% interest rate? Goods goods. Was it your ah-kah-liao fren oredi, previous bike shop, need to sweet-talk, or anyone will get 3% one?

 

Its available to all buyers who buy 1st-hand bikes from him.

Dun need to ah-ka liao or sweet-talk.

But if you want, PM , MSN or SMS me.

I dun like to advertise shop names here in SBF.

[xb84]

newbie, how much you wanna downpay, if u downpay a high amt and loan a small amount, bikeshops might not be willing to give your as low an int rate, if u put minimum downpayment and longer loan period, they are more than willing to offer 3%.

[xb84]

what a low downpayment and long repayment period means for bikeshops

 

0yr yr balance --- 24,000 -------int calculated on 24,000

1st yr balance --- 18,000 ------- int calculate on 24,000

2nd yr balance --- 12,000 ------- int calculated on 24,000

3rd yr balance --- 6,000 --------int calculated on 24,000

4th yr balance ----0

 

 

 

0yr yr balance --- 24,000 -------int calculated on 24,000

1st yr balance --- 20,000 ------- int calculate on 24,000

2nd yr balance --- 16,000 ------- int calculated on 24,000

3rd yr balance --- 12,000 --------int calculated on 24,000

4th yr balance ----8,000 --------int calculated on 24,000

5th yr balance ----4,000 --------int calculated on 24,000

6th yr balance ----0

[xb84]

some of you might be happy with a 3% interest and long repayment, but i'm sure the bikeshop is even happier.

 

0yr yr balance --- 24,000 -------int 720 (3% of balance)

1st yr balance --- 18,000 ------- int 720 (4% of balance)

2nd yr balance --- 12,000 ------- int 720 (6% of balance)

3rd yr balance --- 6,000 --------int 720 (12% of balance)

4th yr balance ----0

 

 

 

0yr yr balance --- 24,000 -------int 720 (3% of balance)

1st yr balance --- 20,000 ------- int 720 (3.6% of balance)

2nd yr balance --- 16,000 ------- int 720 (4.5% of balance)

3rd yr balance --- 12,000 --------int 720 (6% of balance)

4th yr balance ----8,000 --------int 720 (9% of balance)

5th yr balance ----4,000 --------int 720 (18% of balance)

6th yr balance ----0

[merlino]

My house not $150K mah... cannot full cash lor.

 

Haha. Been expecting this line.

 

No la got money actually.. juz asking ard only kpo2 only..

 

how much $$$ you have in your bank ar?

 

i also kaypo ley.. heehee *cute smile*

[merlino]

you have the money, than wats stopping you to pay full. It makes the most sense, you won't be able to get the same returns from your 24k holdings in the same risk free way as you are with the %100 liability to pay the interest. Also, thinking about paying the full amount will give you a reality check on whether you are really ready or really want to spent 24k on a bike. Although, I can afford a 24k bike in cash, I will never buy one cause I will want to pay in full and it makes me nervous thinking most of it will go down the drain in depreceating cost alone.

 

Thanks for telling the world you have $24k

 

Let's be friends

[merlino]

Funny you should ask this question, for someone who can freely advice other ppl when it comes to buying bikes.

 

Nonetheless, that aside, the answer to your question is as you wrote there. Downpay what you are comfortable with.

You have to decide whether are you keeping that bike for long.

 

I won't use point 3 coz I'm not that kind of person.

I'm sure every biker has a dream Class 2 bike and that he / she will do a lot to own that dream. I happen to be one of them.

Plus d/p is a portion of owning a bike. Its still the monthly installment plus maintenance that matters more.

Of course, if you can increase d/p, then monthly installment decreases. But sometimes you don't have that option.

 

Just as a reference:

My bike costs $16227 OTR.

As I had just used up all my savings for my marriage & house, I had just some spare cash to d/p a new bike.

I chose a new bike instead of 2nd-hand as I didn't want a maintenance nightmare after 2 years, as I did with my previous bike. I wanted a long-term bike this time.

So after some shopping around, I found a shop willing to offer me 3% p.a. interest on the price above. I calculated that I can d/p $1500, an amount I can safely put, and take a long-term loan (6 years) and still pay a very low interest amount (18%). I pay only about $200+, allowing me to allocate my cash to other priorities like house and family.

Its quite difficult for the 1st year. I was earning about 2K that time and my wife barely half of tat.

I can only fantasize about aftermarket parts and relied on DIY servicing / repairs.

Yes, as you would remember, I even had to take the option of renewing my insurance by instalment from NTUC.

But now, with most of my wedding loan cleared and a better-paying, stable & permanent job (job-hopping does help, you know), I can afford to double my instalment and set it aside for other bike-related purposes or other things.

At present, I have a bike in tip-top condition (as verified by the service agent), 4 years left of instalments and no plans to sell but plans to modify further,

 

So safe to say, having a low d/p is still ok.

Just have to know what you're doing and have clear picture of what is to come.

 

I like your write-up, honest and wise from experience. Something I'm sure everyone can pick up pointers on

[WildCard]

some of you might be happy with a 3% interest and long repayment, but i'm sure the bikeshop is even happier.

 

0yr yr balance --- 24,000 -------int 720 (3% of balance)

1st yr balance --- 18,000 ------- int 720 (4% of balance)

2nd yr balance --- 12,000 ------- int 720 (6% of balance)

3rd yr balance --- 6,000 --------int 720 (12% of balance)

4th yr balance ----0

 

 

 

0yr yr balance --- 24,000 -------int 720 (3% of balance)

1st yr balance --- 20,000 ------- int 720 (3.6% of balance)

2nd yr balance --- 16,000 ------- int 720 (4.5% of balance)

3rd yr balance --- 12,000 --------int 720 (6% of balance)

4th yr balance ----8,000 --------int 720 (9% of balance)

5th yr balance ----4,000 --------int 720 (18% of balance)

6th yr balance ----0

 

Erm, bro, your calculations like very funny leh.

How come the balance in the last few years jump up? Becomes accumalated?

If follow your calculation, whoever buy this bike is paying 44.1% interest (18% + 9% + 6% + 4.5% + 3.6% + 3%). Even the shop I went to with the highest interest barely touched 30% over 6 years.

 

As far as I have done my research, interest is applied in 2 ways, fixed sum and annual balance. Most banks apply the annual interest on the remaining balance for the year. So while the percentage remains the same, the amount drops each year.

Most bike shops I know apply the fixed sum method, like mine.

Simply explained:

 

My bike costs $16227 OTR (OTR being everything except interest).

I paid $1500 d/p, so thats $16227 - $1500 is $14727.

Interest agreed is 3%.

I took the option for 6 years (72 months).

So that's $14727 * (6 years * 3%) = $14727 * 118% = $17377.86

Amount per month over 6 years = $17377.86 / 72months = $241.39 ~$242 (I'm not going to be begrudge them $50 over 6 years).

Interest paid = $2650.

Per annum = $2650 / 6 = $441.

 

I only pay $2650 of interest over 6 years. Not so bad, even for a long loan. Of course, if I could d/p higher or shorten the loan, would be better. But, for a worse-case scenario, mine is still more than reasonable due to my circumstances.

I have a comfortable instalment amount per month while I settle my wedding loans quicker. Gives me the future option to pay more per month to end it quicker.

 

As a comparison:

A shop I visited offered me the following terms:

$15800 OTR before interest (though I cannot confirm as his breakdown was speculative at best).

5% interest.

Minimum d/p $2000.

 

So, let's say I follow along the terms.

I pay d/p of $2000.

Remaining OTR is $13800.

I take 4 years loan.

So $13800 * 120% = $16560.

Interest paid = $16560 - $13800 = $2760 (Still higher interest despite shorter loan).

But I have to pay $16560 / 48 = $345, an amount which is not an option for me at that time.

 

So, whether a longer loan or higher d/p hurts or helps depend on how you plan your finances in the long term and how hard you did your homework before making a purchase.

Higher d/p & shorter loan period is better no doubt. But when its not an option, paying lower d/p and having a longer loan period at the right terms can still be manageable...

[xb84]

wildcard, i'm posting the balance as per bikeshop point of view, for example, in the first year, the bikeshop used a capital of $24,000 to earn an interest of $720, but on the 4th year, the bikeshop has recoup $20,000 and is only having a $4000 balance owed by the borrower to earn an interest of $720.

 

$720/$24,000 x 100% = 3%

$720/$4000 x 100% = 12%

[WildCard]

wildcard, i'm posting the balance as per bikeshop point of view, for example, in the first year, the bikeshop used a capital of $24,000 to earn an interest of $720, but on the 4th year, the bikeshop has recoup $20,000 and is only having a $4000 balance owed by the borrower to earn an interest of $720.

 

$720/$24,000 x 100% = 3%

$720/$4000 x 100% = 12%

 

Dun do that.

You'll confuse newer riders. You confused me the first time.

More often than not, bike shops charge the full interest on the loan amount over the agreed number of years as a fixed sum upon initial agreement. Its easier to calculate and see.

 

I almost thought you wanted to follow bank's method of interest on remaining balance method.

[fantom]

some of you might be happy with a 3% interest and long repayment, but i'm sure the bikeshop is even happier.

 

0yr yr balance --- 24,000 -------int 720 (3% of balance)

1st yr balance --- 18,000 ------- int 720 (4% of balance)

2nd yr balance --- 12,000 ------- int 720 (6% of balance)

3rd yr balance --- 6,000 --------int 720 (12% of balance)

4th yr balance ----0

 

 

 

0yr yr balance --- 24,000 -------int 720 (3% of balance)

1st yr balance --- 20,000 ------- int 720 (3.6% of balance)

2nd yr balance --- 16,000 ------- int 720 (4.5% of balance)

3rd yr balance --- 12,000 --------int 720 (6% of balance)

4th yr balance ----8,000 --------int 720 (9% of balance)

5th yr balance ----4,000 --------int 720 (18% of balance)

6th yr balance ----0

 

i was trying hard to uinderstand ur formula initially..

 

when we take loan from bike shop, the amount/loan (principle) is fixed. the interest is based on that principle.

 

based on ur formula, ur loan varied... which is not right.

 

for eg, Tom takes 10K$ from Harry with an (fixed) interest of 10% for a period of 5 yrs. so in total, Tom has to repay Harry 11 000$. Tom and Harry agree the debt will be cleared with 5 installments of 2200$ every yr.

 

y1-y5, (10 000 x 10% + 10 000)/5 = 2 200$ per installment per yr

 

=======================

 

for ur formula, it seem like u based on u take 24K loan and REPAY ALL the loan on the 1st installment. then RE-TAKE ANOTHER LOAN of 18K but still repay the same amount at the 1st installment. get it?

[xb84]

i think all of you dont get it, i was just calculating from a bikeshops' point of view.

 

if i ever think of a simpler method of illustration, i will post.

 

u think 2nd hand car dealers in the 90s were in the business to sell cars? no. their main business is in financing.