10 Tips for Acquiring Powersports Financing for Any Budget

Are you interested in taking up a high-adrenaline sport like dirt biking or ATV off-roading? At least 1 million Canadians ride on-road and off-road vehicles annually. Before you take to the trails, though, there’s something you need to think about — how am I going to pay for this?

Powersports financing can be confusing and intimidating, but it does not have to be. With these tips for acquiring powersports financing, no matter your budget or credit score, it’s easy to access the extreme sports adventures of your dreams.

What Are Powersports?

Before we can talk about powersports financing, it's helpful to understand what falls under the umbrella of powersports. Simply put, powersports are just one of the fun and energizing ways to get that adrenaline rush. These thrilling activities include the following extreme sports vehicles:

• Jet skis
• Dirt bikes
• ATVs
• Personal watercrafts
• Motorcycles
• Side-by-sides
• Snowmobiles

Whether near a lake, ocean or in the woods, powersports will provide an exciting experience unique from all other outdoor activities you'll never forget.

Powersports Financing Options

Regarding powersports finance options, your choices are similar to the financing you'd find for other types of larger vehicles, such as boat or RV financing. Honestly, they're pretty similar to a traditional auto loan or mortgage loan. If it's your first time financing dirt bikes or other non-traditional vehicles, here's a brief overview of how it works.

Secured vs. Unsecured

A secured loan is linked to an asset, such as a house or even the dirt bikes themselves, which acts as collateral for the lender and gives them peace of mind knowing they will have an asset to redeem if the borrower fails to pay back their loan. As a result, secured loans tend to have lower interest rates than unsecured loans, making them attractive for larger purchases.

On the other hand, unsecured loans do not require any pledging of assets but can charge higher interest rates because there's more financial risk involved for the lender.

What's best for you? We'd definitely suggest speaking with an expert first. However, when it comes to ATV or dirt bike financing, an unsecured loan might be better since such vehicles often hold limited resale value and may pose too much risk to use as collateral on secured loan agreements.

Flexible vs. Fixed Interest Rates

With flexible rates, the interest rate may fluctuate due to changes in a given index rate. This means the monthly interest payments can sometimes be more than initially estimated. It also means that your interest rates are subject to changes in Canada's economy.

On the other hand, a fixed interest rate provides security since the same amount is payable each month for the entire loan period.

The biggest “pro” of flexible rates is their lower entry cost than a fixed rate. It also allows individuals to benefit from a slight drop in market interest levels. Conversely, one of the most appealing aspects of a fixed rate is that it protects against large increases in monthly payments should there be an unexpected rise in market rates.

10 Tips for Successful Canada Powersports Financing

Ready to finance your dream dirt bike or that shiny new ATV you've been eyeing? Before you sign a dotted line or fork over any cash, read through these ten tips for successful powersports financing.

1. Set a Budget

Before you make the plunge, establish the amount of money you are comfortable allocating for vehicle-related costs, such as maintenance and insurance. With this budget amount in mind, finding the right powersports vehicle for your needs will be easier.

This helps optimize your search, sure. However, it also forces you to consider the additional costs of financing something like a dirt bike or ATV. For example, it'll force you to consider insurance costs, loan origination fees, and even accessories or repairs that might be necessary before you can take your vehicle out on the open road.

2. Check Your Credit Score

As you develop your budget, ensure you've checked your credit score. A low or unstable credit score can make lenders hesitant to approve you for loans and other financing options with competitive terms. That’s why checking your credit score before applying for any powersports financing is important. That way, you can know if you need to improve your score before applying.

Additionally, having a good grasp on your credit score can help you find the best rates since lenders will be more likely to grant you a loan at a better rate than if they view you as a high-risk customer.

Don't worry if you have poor credit. At NLP Finance, we can help you access ATV financing and other powersports financing regardless of your credit score or financial situation.

3. Save for a Down Payment

Before financing these types of vehicles, having enough money for a down payment is essential. After all, they're larger, more expensive vehicles. Most lenders will require some down payment, usually 10% to 20% of the vehicle's value.

It's not just about having enough cash on hand, though. A larger down payment can often lower your monthly payments, make qualifying for better loan terms easier, and even lower your interest rate. The bottom line? By starting with some equity from a down payment, you'll be better positioned to manage any unforeseen financial hardship down the road.

4. Understand Your Options

You've got your budget, you know your credit score, and you've started saving for your down payment. Great! Now, having a good idea of vehicle options before opening your wallet is crucial. Knowing all the vehicle brands, models, and feature options available can easily be the difference between a vehicle that is perfectly suited for you and one that will leave you unfulfilled.

This is why it's important to research before considering a vehicle purchase. Consider the following:

• How will you use the vehicle?
• Is it something a younger family member will use and need to grow into?
• What kinds of tech features should it have?
• What engine size for you need?
• Are there any aftermarket parts you might need?

Asking yourself questions like these can help narrow down your choices and help you settle on a vehicle that best suits your budget and specifications.

5. Get Pre-Approved

Getting pre-approved for a loan can save you time and hassle down the line. Knowing how much you can borrow before you start shopping will help ensure you get the best deal available without pinching your pocketbook too hard. It also helps ensure that multiple inquiries won't affect your credit score and that you get the best interest rate possible.

However, remember that pre-approval doesn't guarantee an approved loan or purchase. Still, it does give you a better starting point for securing your dream ride without any nasty surprises cropping up afterward.

6. Consider Insurance

Protecting your powersports vehicle with the right insurance is important for several reasons, including the fact that it will cover you and help ensure that you can continue to enjoy all the fun associated with off-roading.

Whether it’s an ATV or a snowmobile, powersports vehicles are prone to unexpected repairs and sometimes accidents, so having adequate powersports vehicle insurance in place will help ensure your investment is covered and you won't have to struggle financially in those types of situations.

7. See Dirt Bikes in Person

By this point, you're likely close to making your decision. While we suggest starting your search online (we offer several new and used vehicles for you to view online), it's always best to view the dirt bike or ATV in person if you can.

If you can't view the exact one you're interested in, try visiting a nearby shop with a similar make and model. This will help give you a good idea of the vehicle's size, weight, and feel before you purchase it. Whenever you make a large purchase like this, it's always best to at least see it in person, if not test drive it beforehand.

8. Chat About Details

Assuming you've applied for ATV financing (or some other form of powersports financing), we suggest ironing out the details before you close the deal entirely. Ask about loan origination fees, hidden costs, payment schedules, and interest rates. You want to ensure you know every little detail about the cost of the loan and other fees before you agree and sign anything.

9. Consider a Payment Plan

Paying for a powersports vehicle outright can be expensive. Fortunately, payment plans offer the opportunity to purchase your dream machine by spreading out the cost. Not only will payment plans give you much-needed financial respite, but they also provide a convenient payment structure that fits your budget or lifestyle.

You'll also have access to a payment plan that offers low rates and flexible payment schedules. With options like deferred or no-interest payment plans, pre-payment bonuses, or payment extensions if needed, you can have it all without breaking the bank.

10. Work With NLP Finance

Our last and best tip for successful powersports financing? Work with NLP Finance. Our online loan application is fast and hassle-free, and we work hard to get you the best rate, terms, and protection available.

Get ATV Financing

Interested in hassle-free powersports financing in Canada? All that's left for you to do is apply online. You'll fill out a few forms and provide us with a few documents once our lender gives us conditional approval.

Short on cash right now? Don't worry! We offer an attractive third-payment option and an easy-pay option with no penalties if you need to pay off the loan early. NLP Finance has got you covered, so go ahead and apply today!