So you’ve been introduced to the thrilling off-roading industry and have to get your hands on your own UTV. But you don’t have thousands to pay outright for one. What do you do? UTV financing is your solution. It’s like buying a house, but a little easier. And yes, it’s possible to get a loan with bad credit.
It can be overwhelming to figure out what you can afford and where to get the best loan. We make it easy by breaking it all down for you.
How to Get Your UTV Loan
First, we need to look at the process from start to finish. It might seem like a big mountain to climb, but go one step at a time and you’ll be on the trails before you know it.
Check Your Credit Score
Potential lenders will ask about your credit score and use it to define the terms of the loan. The better the credit, the better your interest rate and loan amount will be. A bad credit score might mean a higher interest rate.
Create a Budget
What can you comfortably afford for a monthly payment? Start with your monthly take-home then deduct all expenses and any debt payments. This should give you a good idea of how much is left for a UTV payment.
Save for a Down Payment
A down payment is the money you pay the dealer out of pocket, and it makes your monthly payment smaller. Some dealers want a 10%-20% down payment before taking home your new rig.
Shop Around for Different Lenders
Each lender offers a slightly different loan length and interest rate. A shorter loan usually gets you a smaller interest rate, while longer payment periods will cost more in the long run.
Get Pre-Approved
Pre-approval gives you an estimate of what you qualify for in terms of loan amount, length, and interest rate. You haven’t officially taken a loan out, but you know much much you can borrow. Be careful, though—qualifying for an amount and affording the monthly payment are two different things.
Calculate Monthly Payments
This is the not fun part of the process—it’s math time. This is where you see what that monthly payment will look like. Often financing takes between 36 months to 72 months. And don’t forget to factor in taxes and miscellaneous fees (delivery, setup, documentation, etc.). This UTV financing calculator can help you do the math.
Whether buying a brand-new machine or shopping for a used one, take time to assess your options. Traveling to the dealership can turn into a day trip, so it’s easier to get everything done in one go.
Talk to your riding buddies, see which dealerships are in your area, and go from there.
Which Loan Is Best For You?
Financing comes with lots of options, each with their own benefits and downfalls. We listed the popular types of lenders and what you need to know about them.
Retailer (Dealership or Manufacturer)
Retailers are convenient lenders, since you can get your loan and machine at the same place. They might offer a 0% APR for a limited time that can increase up to 30% after that, as well as rebates and discounts. The dealership could repossess your UTV if you miss a payment.
Banks
Already having a bank account makes them a convenient choice, especially when paying your bill online is easy. Banks require a higher credit score for approval.
Credit Unions
Credit union members can get loans with lower interest rates. The downsides are that online services might be less developed compared to banks and there are less physical buildings.
Personal Loans
Personal loans can be used for pre-owned or new side-by-sides. It’s easier to compare rates with other lenders. Plus, the website and app are streamlined. The drawback here is that there might be upfront application fees.
Home Equity Loans
Ask your mortgage lender if you can add a UTV to your home equity loan. These loans have lower rates than most financing options, even though rates can rise over time. This does directly affect your credit score and can put your home at risk if you miss a payment.
Credit Cards
Credit cards are easy to apply for and offer flexibility with monthly payments. Most new credit cards have an interest-free trial, but interest can increase up to 25% once the trial is over. These are better for financing smaller purchases, like tires.
Buying a UTV with Bad Credit
Lenders typically want to see a credit score of 670 or higher, but bad credit isn’t the end of the world. There are still lenders who are willing to work with you. They’ll look at your income compared to expenses, whether you rent or own your home, and your overall debt. The downside is that the terms aren’t ideal, even though the funds can be sent directly to your account.
Rebate vs. Discount
Rebates and discounts are two words you might hear after walking through the dealership. But the two are not the same. Rebates refund the money either after the purchase of the machine or after a fixed time. You’re still paying the full amount plus taxes. Discounts, on the other hand, give you a certain amount off the machine before taxes.
Be sure to do the math before accepting a rebate because they usually come with a shorter loan length and lower interest rate.
The price tag on the machine won’t be the final price you pay. Dealerships will apply other fees that are sometimes necessary and sometimes negotiable. That’s why it’s important to shop around to see which dealership charges the least in hidden fees.
Some hidden fees to watch for include accessory install fees, delivery charges, setup fees, document fees, and extended warranties.
We’ve thrown a lot of information your way. It can be hard to dip your toes into something new, but taking the first step of side-by-side financing is worth it. You’re joining a great community of riders and that makes you one of us.
