A Complete Guide to Powersports Financing

There are plenty of options for powersports enthusiasts when shopping for an all-terrain vehicle (ATV), motorcycle, utility terrain vehicle (UTV), or personal watercraft (PWC). These vehicles are great investments, whether you need them for specific jobs or adrenalin-filled adventures. Understanding powersports financing can help you understand your options when purchasing a new vehicle.

Understanding Powersports Vehicle Financing

Those who are interested in financing their vehicles instead of paying for them in full upfront can benefit from powersports loans. Similar to a vehicle loan, you can obtain a powersports loan by meeting specific criteria. Then, you’ll make payments according to your contract to pay down the loan and eventually own the vehicle outright. These loans are available for different types of powersports vehicles, such as:

• ATVs
• UTVs
• PWC
• Snowmobiles
• Motorcycles

The Powersports Financing Process

The financing process for an ATV or any other powersports machine resembles your typical auto loan:

1. Check your credit score: Know your credit score and its impact. Generally, the higher your credit score, the greater your chances of getting approved for a loan with favorable interest rates. Some lenders offer powersports financing for low credit scores, but keep in mind they typically come with higher interest rates.
2. Make a budget: Establish a budget to determine how much you can spend on the vehicle. A budget will help you narrow down which recreational vehicle types and models you can reasonably afford. Factor in fuel, maintenance, and upgrades in your budget.
3. Consider the down payment: Many lenders require a down payment of 10% to 20% of the vehicle’s value. For example, if you’re interested in an ATV that costs $4,000, you may need at least $400 to make a down payment. Make sure you have enough money set aside to cover that upfront cost.
4. Shop around: Do your research to find the exact type of machine you want. This way, you can compare models and look at average prices, which can help you decide which vehicle is best for your needs, wants, and budget.
5. Research lenders: Do your research to find companies that offer powersports financing. Compare loan offers from different lenders before choosing what works for you. Besides the principal amount, you’ll want to consider the interest rate, whether the loan is secured or unsecured, and loan terms.
6. Apply and get preapproved: Fill out the loan application form for preapproval. The information needed when applying typically includes your identification information, proof of income, and proof of residence. The financial institution will review your financial situation to decide if they’ll grant you the loan or how much they’re willing to lend.
7. Calculate your payments: The preapproval will have terms under which your loan will be provided, including the interest rate. Use that information to calculate the monthly installments and total loan amount.
8. Buy the vehicle: Once you consider the loan terms and decide to proceed, you can make the purchase and enjoy your new vehicle.

Loan Types for Powersports Vehicles

The following types of loans are available for powersports vehicles:

• Secured loans: These loans have long payment terms, high limits, and lower overall rates. However, your ATV, UTV, or any other vehicle you want to buy will be used as collateral. If you default on your loan, the vehicle will be repossessed.
• Unsecured loans: These loans do not require collateral. However, their rates are higher, and their terms are shorter. Although you won’t lose your vehicle if you default on an unsecured loan, you’ll suffer other financial consequences, like a lowered credit score and penalties.

Where Do You Get a Powersports Loan?

Financial institutions like banks and credit unions are often the most popular places to obtain vehicle loans. They provide competitive terms and interest rates, making them a great choice for people with high credit scores.

Manufacturer financing is another option, where powersports manufacturers may offer zero-percent financing for a limited period or promotional financing deals. Most deals are offered through local dealerships, where the dealer handles the sale and financing in-house. However, this financing option is usually only available for new vehicles and has higher interest rates after the end of the promotional period.

Otherwise, dealership financing provides buyers with convenient financing options. The dealer has a relationship with multiple lenders, and you, as a buyer, get financed directly through the dealership. You also have the opportunity to negotiate pricing when buying through dealerships.

What Factors Do Lenders Consider for Powersports Loans?

As you prepare to get your powersports vehicle through financing, it helps to understand the criteria that financial institutions consider when processing your application. Most notably, credit score is one of the most significant factors. Your credit history gives lenders a picture of your financial habits and situation, which can help them determine if you’re a good candidate for a loan.

An additional factor financial institutions consider is debt-to-income ratio. This ratio indicates how much of your monthly income you put toward debt. A low debt-to-income ratio suggests you have more disposable income that can cover new loan payments. Lenders also consider the stability of your income. A stable source of income indicates that you’ll be able to make regular payments.

Some financial institutions may also look at your loan-to-value ratio (LTV). This is the ratio of the loan amount compared to the value of the machine. Lenders generally prefer an LTV below 100%, which you can achieve by making a down payment. An LTV to aim for is about 80%, and you can achieve this by making a down payment of at least 20% of the vehicle’s value. A low loan-to-value ratio can also help you get a better interest rate.

The type of machine you want to buy also plays an important role in determining your financing. For example, reputable and popular brands may have better resale value, so they could come with better loan terms.

Family Powersports Financing Options

At Family Powersports, we have an extensive inventory of new and used powersports vehicles. To help you afford your dream ATV, UTV, or other powersports vehicle, we’re product to offer powersports financing through our professional finance department.

Let our expert team walk you through your options so you can get your vehicle to your jobsite or out on the trail as soon as possible. We’re here to answer all of your financing questions and create a financing plan that works for your budget, no matter what kind of vehicle you’re interested in purchasing.

If you already know what kind of vehicle you want, getting started with financing is easy — simply visit one of our six locations, or fill out and submit an online credit application through your closest Family Powersports dealer.

Contact Family Powersports for ATV and Powersports Financing

Family Powersports is proud to offer a comprehensive selection of boats, ATVs, mowers, UTVs, and more at our six dealerships, located in Lubbock, San Angelo, Odessa, Austin, San Antonio Alamo, and Midland. With thousands of options available, you don’t have to look anywhere else to find the perfect powersports vehicle for your needs.

Plus, we offer comprehensive financing options, so you can complete the buying process in-house — all with guaranteed price matching. It’s also easy to stay updated on our regional manufacturer promotions, allowing you to save even more on your dream model. Visit any of our locations across Texas today or reach out to us at 877.425.8240 for more information about financing!