ATVs and side-by-sides are a great way to experience the outdoors. However, purchasing one is a significant investment, often requiring financing. Understanding the financing process is essential to making an informed decision. According to ATV.com, securing a loan for an ATV or SxS shares similarities with auto financing, but also presents unique aspects.
Exploring Local Banks and Credit Unions
When starting your financing journey, ATV.com suggests first consulting with your local bank or credit union. This approach can be advantageous for several reasons:
- Established Relationships: If you have a pre-existing banking relationship, you may qualify for better interest rates and loan terms.
- Personalized Service: Local institutions often provide more personalized service and a better understanding of your financial situation.
- Used Vehicle Financing: Local banks are generally the best option when financing a used ATV or SxS from a private seller.
ATV.com notes that interest rates for recreational vehicles like ATVs and SxS may differ from those for cars and trucks. However, increased competition in the lending market is leading local banks to offer more competitive rates. Some credit unions may even offer lower rates and longer terms for recreational vehicles compared to auto loans. Shopping around and comparing offers from multiple institutions is crucial.
Securing pre-approval from your bank gives you increased negotiating power at the dealership, potentially allowing you to negotiate additional items like helmets into the deal.
Online Lending Options
Online lenders also provide financing options for ATVs and SxS. When considering online lenders, exercise caution and conduct thorough research, paying close attention to the fine print. Some ATV manufacturers partner with online lenders to offer attractive rates on specific models. As with local banks, pre-approval from an online lender strengthens your negotiating position at the dealership.
Before applying with an online lender, verify that the dealership accepts financing from that particular lender. Also, inquire with the dealership about their preferred lending sources, as they may offer more favorable rates.
Understanding Interest Rates and APR
ATV and SxS loans typically function similarly to auto loans, with interest rates expressed as an Annual Percentage Rate (APR). The APR includes all finance fees associated with the loan. According to ATV.com, the interest paid on the loan goes to the lender as a fee, and is paid before the principle.
Given that ATV and SxS financing rates can be higher than auto loan rates, making timely payments and paying extra on the loan each month can significantly reduce the overall cost of the vehicle.
Financing with Poor Credit
Even with a less-than-perfect credit score, securing financing for an ATV or SxS is still possible. Some lenders specialize in loans for individuals with lower credit scores. However, be prepared to pay higher interest rates and potentially make a larger down payment. Carefully evaluate your options and financial situation before committing to a loan with unfavorable terms.
Final Thoughts
Financing an ATV or SxS purchase is a significant decision. By thoroughly researching your options, comparing interest rates, and understanding the terms of the loan, you can secure the best possible financing and enjoy your off-road adventures without breaking the bank. According to ATV.com, remember to check with your local bank and dealerships for more details.