Question about buying new with cash...

[Mt707]

Yo. Ive been lurking for what seems like a year now. 

Figgured id make a into thread with a question  but more about the question than intro so i posted here...

 

So ive been riding since i was 3. (33 now). Pops got me a a trail 50. Moved up to a 80 then 125 then a 250, first street bike was a inherited 05 gsxr 1000. Totatled it. Then bought a garbage 05 R1, toatled that... bought a 06 drz400 blew that up.  Grew up a little bit, bought a F4i just to commute. Had a blast with that little 600. Had to sell it for rent. Now here i am years later looking for a toy. 

Ive decided 100% on a new mt 07. 

Now to the question part. Ive never bought a vehicle brand new, let alone from a dealership. Because of extremely unfortunate circumstances I am able to buy with cash. Is cash the way to go, or should i still try to finance. Again ive never delt with a dealership, and my whole life ( i have a legal income) ive only ever delt with cash so im not sure how to go about tryi g to get the best deal. Cash or finance..

I appriciate all advice

 

 

[D.A.]

@Mt707

Short answer:

Buy with cash.
 

Long answer:

I have purchased 6 motorcycles  in the past 20 years — 2 brand new from dealerships and 4 used from private individuals. If you’re buying from an individual, cash in hand when negotiating a price gives you a lot more bargaining power than the promise to borrow money somewhere and bring it to the seller.

And while I’ve heard, sometimes from dealers themselves, that you can get a slightly better deal if you finance a bike through them because of the money they make on interest, my experience is that once again, you have more leverage if you walk in with cash (or the ability to pay with a cash equivalent like a check or credit card). 

That being said, the most important factor is timing. The best way to get a killer deal on a motorcycle, regardless of whether it’s new or used or whether you’re using cash or financing, is to buy when nobody else is buying, when sellers are most motivated, even desperate to sell. For me that’s meant buying in late November / early December. Don’t allow yourself to be too eager or in a big rush to buy, don’t buy at the peak of riding season and don’t get Bike Fever, because that puts you in a weak bargaining position and results in you paying a higher price.

Second, if getting the best price is genuinely your prime objective, don’t box yourself into one specific model of motorcycle. For instance, as much as I love my FZ, I would just as readily have gone for a Z900 or Street Triple had I found one at the right price. There were several possible motorcycles on my short list and after obsessively watching the market for 5 or 6 weeks, scouring CycleTrader and Craigslist daily, I stumbled across a killer deal on a low mileage FZ07 and decided to pull the trigger. And having cash in hand allowed me to negotiate the price down to even less than the already low asking price.

Third, both of the bikes I bought brand new — a Kawasaki ZX-10R and a 1700cc Yamaha Warrior cruiser — were end of the year models the dealers seemed especially eager to dump to make room for new models hitting the showroom floor. In the case of the ZX, the dealer had a glut of unsold, previous year models sitting in crates in the warehouse and they were basically giving them away to get rid of them.

And the dealer that sold me the Warrior had bought out the stock of another Yamaha dealership which had gone bankrupt and they were therefore able to price the bikes thousands of dollars below what they were otherwise selling for. That particular dealer explained that the longer the bikes sat in their dealership, the more it cost them because of their financing arrangement with Yamaha. Plus the bikes lose value as they age, regardless of the fact they’re brand new.

I did have to drive a few hundred miles on a moment’s notice to get these distressed deals but the savings made it worthwhile. 

If you have your heart set on a brand new MT07 and you have to have it now, then go for it — it’s a great bike! But regardless of whether paying with cash or credit, you will pay more for it than if you wait until the end of the year when nobody is buying motorcycles and the 2021 models are hitting or are about to hit the floor. At least that has been my experience. 

Edited August 12, 2020 by D.A.

[mossrider]

Actually been 11 months...

Cash is king but:

I would add since you mention never having bought a vehicle on credit that you may want to consider just that. For two reasons. My son in law has money too but no credit, having done everything with cash till now. Once married he discovered he couldn't get utilities, cable, internet, phone or rent an apartment w/o a credit history.  Secondly you may be able to take advantage of dealer or manufacturers incentives and get cash back, double points, 0% interest, $500 clothing or accessory allowances or whatever they are offering by using their money. Especially since you are in a position to buy out at any time to escape any interest or penalties or the long term hook they would love to see you in.

Food for thought.

And welcome aboard.

[klx678]

Problem this year will be shortage of bikes to buy.  The pandemic shut down production of parts and motorcycles made from said parts.  So dealers at the moment have a seller's market.   You can't buy what they don't have.  Smart dealers will not dealer trade at cost either, if they can't replace it.   They all know that.

Key with buying is to decide which dealer or dealers you would actually like to buy from, then do all your shopping around and try to get a solid grasp of what it takes to buy.  Then go to the dealer you want to buy from and tell them exactly what it takes to buy and that you have the check book or cash if they will do it and show them.   

I will tell you the dealers have about 17% margin on their bikes so don't expect to go in and get 25% off of a bike priced at MSRP and no matter what anyone may tell you, it does cost the dealer for the shipping and the assembly/prep when they get in new bikes.  Some dealers may include that in their price others may not, adding it on the top, but it is a real expense. 

Knowing a bit about what they have in the bike including their costs above that paid to the manufacturer can help you to know the BS from the truth.  Anyone quoting a price that is more than that 17% as their price on the bike is going to add a bunch of fees when you go in.  On a bike that has any sort of demand they will not lose money.   They can tell you anything on the phone, by email, or in ads, but when you go in and sit down you will find that $10,000 MSRP bike quoted at $8000 will not be $8000 for long.   One guy we lost to one of those dealers ended up with a $3 difference and a 200 mile one way trip, buying his bike that was quoted a grand under us.   That's why better dealers hate giving quotes over the phone.  If they're honest the liars will underprice them by giving prices that cannot be done.  

You can always lowball an offer and get things started.   If a guy sat down and pulled out a check book and gave us a reasonable but too low an offer, we know they're ready to buy and we will counter offer with what it takes, usually asking if we do $XXX will you take it?  Ignoring trade ins once we arrived at a bottom line for a model we usually would do within a small amount difference if not identical on all.   One time we might cut the price is if there is a fair amount of accessories being bought in the deal too.

Summary, get an idea what the general price is, it may vary on hotter sellers, the mark up on bikes to MSRP is less than 20%.  There are fees the dealer may show or absorb, but they are real.   Have an idea of what price is a sale for you.   And how much is it worth to stay at that dealer or dealer near you, to eliminate running around hundreds of miles.

If some salesperson writes up a price you know is good, be ready to put the deposit on it now.   If you walk out that deal may be taken by the next person in the door and they may not have the bike to sell you.   This is the case when buying year old or two year old bikes.  They may give the serious low price to get the bike off the floor, but once gone they aren't going to replace it and getting another one will only be done if sold and it won't be at the lower price.   I had that happen to me.  If I had acted sooner on the bike they had on the floor for the year I could have probably saved $500, but I was a week late and the extra cut wasn't going to happen on another bike they'd have to get shipped in.

Hope this helps a bit.  I sold bikes for around 22 years full and part time, plus bought some bikes, so been on both sides of the fence and seen what goes on.  Seldom will the cheapest dealer be the best to buy from and seldom are they honest about numbers.

[Airbornedeth]

I paid cash for my leftover 2019 model 2 months ago, and got a pretty good deal on it. The first dealer I went to tried to get me at $9100 out the door paying cash. He openly laughed at what number I was comfortable paying, and he came back at $8500. I got up and walked out. I went home to do some more research, and saw another dealer close and sent an email inquiry. They replied in less than 3 minutes, and told me a number that was a few hundred less than I wanted to pay, so I immediately placed a deposit and picked it up the next day. It was hassle free, and I'm very satisfied with how they handle themselves and everyone that walked through the door while I was waiting to sign my paperwork.

 

Moral of the story is, the deals are out there. Just don't get tunnel vision with one dealer. The first dealership I went to will never have my business again, even if it's just oil change supplies. 

Edited August 12, 2020 by Airbornedeth

[rfmueller]

1.  Cash.  Can you take that same money for the bike and get more back on it investing than the interest you'd pay? 

2.  Buying used is the best way to go, but nothing with more than 5k miles on it.  Bikes don't last nearly as long as autos.  You don't want a bike that will need tires, battery, chain, brakes, spark plugs right out of the gate; you'd spend a lot of money on service, which would offset your savings, besides the time and frustration involved.   Get something you can save dealer fees on, but without having a ton of service needed right away.

[RobC2]

So all that said, if you could get out of the door at MSRP (not including state taxes and fees since they vary widely), would that be a good deal? Basically the price of the bike, reduced by all the dealer setup fees. 

[Mt707]

So it seems to me, as someone who isn't too concerned about credit, cash would be the way to go if I can find a dealer who's maybe got a decent deal on a 2020... ( i really want the 2021 just for pride because its my first new vehicle but if I can get a better deal on a new 2020...)If i cant find a sutible price otd, Try and finance with discounts and what not and then just pay it off right away?Sounds like covid really fked up the 2021 sales 

 

I appreciate everyone's opinions this is kinda a big deal fot me bahahahaha

[rfmueller]

28 minutes ago, RobC2 said:

So all that said, if you could get out of the door at MSRP (not including state taxes and fees since they vary widely), would that be a good deal? Basically the price of the bike, reduced by all the dealer setup fees. 

Sure, it's good deal for NEW bike.  My FZ07 was purchased new in August (2017), so I got $600 off the sticker, but the $300 dealer fee sort of took away half of the discount.  If you can get a dealer to take anything off, you're doing good.  Right now is when all new bikes go on sale by the way.

On the other hand, if you're going to pick up a 1 year old bike with a thousand miles on it for $1000 off of a new price, you also don't pay the dealer fees (shipping etc.) and that is an even better deal.

[Mr.Puss]

I bought mine cash right off the floor., and Id do it that way again.

Why pay more for whatever extra fees and nonsense and why add one more thing to concern yourself with? I say buy and be done with it.

...and welcome to the club!

[klx678]

20 hours ago, Airbornedeth said:

I paid cash for my leftover 2019 model 2 months ago, and got a pretty good deal on it. The first dealer I went to tried to get me at $9100 out the door paying cash. He openly laughed at what number I was comfortable paying, and he came back at $8500. I got up and walked out. I went home to do some more research, and saw another dealer close and sent an email inquiry. They replied in less than 3 minutes, and told me a number that was a few hundred less than I wanted to pay, so I immediately placed a deposit and picked it up the next day. It was hassle free, and I'm very satisfied with how they handle themselves and everyone that walked through the door while I was waiting to sign my paperwork.

 

Moral of the story is, the deals are out there. Just don't get tunnel vision with one dealer. The first dealership I went to will never have my business again, even if it's just oil change supplies. 

I'd have walked too.  Pretty stupid of the dealer or salesperson to laugh at a serious offer.  I'd have simply said I couldn't do that but let me see how close I can get.  Then go get the bottom line.  

The other dealer was clearly a good choice.

 

13 hours ago, RobC2 said:

So all that said, if you could get out of the door at MSRP (not including state taxes and fees since they vary widely), would that be a good deal? Basically the price of the bike, reduced by all the dealer setup fees. 

MSRP out the door was historically pretty close.  I've been out of sales for a long time so I'm not totally sure of the additional cost beyond the price of the bike for the dealer.   If there are any breaks from Yamaha that will drop the price that amount.  In fact when I bought the XSR the Yamaha money was deducted after the tax for legal reasons with state tax...  they don't deduct before taxes.  I ended up a couple hundred under MSRP including all fees,  but plus state tax and title fee.  Tax was 7%, title was like $20.   

 

 

I will say cash really doesn't mean anything to the dealer other than the initial deposit to bind the sale.    If they do the financing they with a local bank they may get a couple percent over the life of the loan if run out around 1/3 or so of the life of the loan.  I don't know if they get anything from the manufacturer financing, I'm betting not due to the low interest rate.   

Edited August 13, 2020 by klx678

[Two-rocks]

I pay cash for everything (almost). Sometimes the dealer gets a kickback on financing. Ask them, they might work harder for the sale if they do. New car last year was that way, but cars are a different market....

Edited August 13, 2020 by Two-rocks

[shinyribs]

It doesn't hurt to ask about financing deals. Sometimes dealerships get kickbacks for using certain banks and it can give them a little headroom to drop the overall price. 

I went with cash to buy my bike, but they had some dirt cheap financing options that was giving them advertising kickbacks. I paid $3k cash down and financed the remaining $4k. I paid $65 in total interest/financing fees. 

 

I don't know why a bank would even lend $4k for two years and deal with all the paperwork for only $65. I wouldn't do it! But it kept a little extra side money on hand for things like fancy exhausts and such