A Guide to Financing a Powersports Vehicle

When you’re in the market for an ATV, UTV, motorcycle, or personal watercraft, you’ll find an amazing selection of vehicles to choose from. Whether you’re seeking a touring bike for long-distance road trips, a quad for off-road adventures, or a high-speed PWC for the perfect dose of fun on the water, there are plenty of rides out there. However, the cost of these machines can be high, and not many people can pay the full cost upfront. That’s why many potential buyers choose various financing options.

At Vey's Powersports, we strive to help our customers get the powersports vehicle of their dreams with a trouble-free experience, which is why we have compiled this handy financing guide. Keep reading to learn more and if you want to check out our selection of powersports vehicles, visit our dealership in El Cajon, CA, to explore what we’ve in stock.

Make a Budget

Your first step is to determine how much you can spend on buying a powersports vehicle. This accomplishes two goals. First, it helps you avoid falling in love with models beyond your price point since you'll eliminate them from your search at the start. Second, it helps you avoid skipping features or models that you can afford. By setting a realistic maximum spending amount, you will be able to get the highest quality model that you can afford.

As you establish a budget, keep a few points in mind. Powersports vehicles can last many years so you'll want to invest accordingly. Don’t forget to factor in additional costs such as fuel, upgrades, and maintenance. Remember that most loan terms can range from around 2 to 6 years, so you'll want to consider how your finances may change over time.

Know Your Credit Score

The amount of money you will get from a loan will strongly depend on your credit score. The higher your credit score, the better off you'll be. Focus on building a solid credit score and try to get it above 700. If your credit score is lower than this, you’ll want to improve it before you apply for a loan.

Financing Options

Think about what type of loan you want to pursue. Secured loans use the vehicle you purchase as collateral in the event that you default on the loan. This means that your ATV, bike, UTV, or PWC may be repossessed if you fail to make payments on time. These loans have high limits, lower rates, and longer repayment terms, and they’re the best option if you need a larger amount of money up-front or if you don’t qualify for an unsecured loan.

Unsecured loans require no collateral, but their rates are higher and terms shorter. You probably won’t lose your vehicle if you default on an unsecured loan, but you could end up dealing with a penalty. Try to know as much about the loan you’re taking as possible. There are some loans that penalize you for paying it off before the term is over, and you don’t want to have to deal with that. We recommend that you always read your loan terms carefully and make sure that you understand your obligations before you sign on the dotted line.

Consider the Down Payment

Most powersports vehicle financing options require an upfront down payment of 10% to 20% of the vehicle's total cost. Start saving up for that payment and keep in mind that paying more upfront will save you money in the long run due to lower interest rates.

You should be sure that you’ll be able to make your monthly payments before you get your purchase financed. You’ll need to do some math to determine how much these payments might be for the vehicle you want, as well as how much interest will accrue over time. 

To avoid going into debt, a loan payment generally should not be more than 20% of your total income. As you explore various models, stick with what you can afford in the long-term and make the largest down payment upfront that you can.

We hope that these tips will help you to successfully finance a powersports vehicle. Once you’ve finalized the model you’re interested in purchasing, one of our knowledgeable and friendly team members at Vey's Powersports would be happy to walk you through the financing process. You’ll find us in El Cajon, California, and we proudly serve all those in San Diego and Santee.