Guide to ATV Financing-Get the Right Loan, not Ripped Off


It’s time.  You are ready to pull the trigger and purchase a new ATV.  This may be your first ATV purchase or your tenth, but once you find your dream machine, it is hard to get your mind off of it.  This is usually when the second biggest question, after which ATV to buy, comes up: how are you going to pay for it? Unless you are sitting on thousands of dollars in your bank account, this is usually a fairly daunting question.  Luckily, there is no reason to fear the purchasing process as long as you understand the general options, what you are looking for and what you need to look out for.  We always prefer to buy ATVs with cash to avoid paying extra due to financing, but that is not always an option, so knowing the below information about financing will put you in the best position to not get ripped off.

Beginner Tips

I would love to say that there is some secret that makes a lender just give you money with no expectation of getting repaid, but I have yet to find such a lender, and if I do I might just keep my mouth shut about it for a while.  Just because lenders do expect you to make money off you doesn’t mean that there aren’t some things you can do to help yourself in the process.

First: Understand that the lender is there to make a loan.  The only way the lender makes money is by making a loan, so if you are a decently well qualified applicant, that lender wants to give you a loan.  They do want to make a loan that is most advantageous to them, but you hold more of the power than you think. Until you sign on the dotted line, you have the ability to say no and walk away.  This means that you are not at their mercy, you have the ability to kill the deal for them.  If you don’t feel good about the offer presented to you, do not sign the papers.  They will either sweeten their offer or you should walk away.

Second: The lender you are working with does not have the ability to give you the exact deal you want.  A lot of lending applications are now processed using complicated algorithms, statistics and computers that calculate the likelihood of a lender being repaid by the applicant.  These predictions usually spit out the interest rate for the applicant and then it is reviewed by an underwriter who makes  a cursory check to make sure there isn’t a flaw in the system. Higher interest rates are given to those who are more likely to stop making payments or on used ATV’s that are inherently less likely to last the length of the loan, which may cause an owner to stop making payments.  Why is this a beginner tip, you might wonder.  Easy, there are things that are out of the control of the lender sitting in front of you.  Although you hold the power, you may need to make a difficult decision about whether or not there is a deal out there that will work for you and your budget.

Third: ASK QUESTIONS!!!  Have you ever read a lending contract? It is complicated and full of phrases and terms that trained attorneys may stumble over from time to time.  The time to ask questions about the terms of your contract is not when the first payment comes due, it is when you are sitting at the table with the person who only makes money if you decide to borrow money. You will want to go over what money you are expected to shell out and when.  You will want to ask about the specific amount of money you will be expected to pay at the time of purchase, how much you will be paying every month, how many months you will be paying, how much total you will pay and what happens if you pay off your loan early.  Do not stop asking questions until you can parrot back to the lender the exact payment schedule for the entirety of your loan.  If he ever has to correct you, start from the beginning.  You may think that this is a little overkill and will be annoying, but I would recommend you annoy them and save a couple hundred (or thousand) dollars, than pretend like that amount of money doesn’t matter to you.  I like to think that lenders just don’t realize how complicated these contracts are to the average buyer, but there are those finance people who profit off buyer ignorance and line their pockets in the process.

Fourth: Keep your eye on the prize. Finance people are often focused on how to make their money by getting you to agree to a loan.  They are trained to do this by keeping your focus on what will seal the deal, not what is best for you.  The last time we went in to buy a car, the sales person kept asking what we wanted our monthly payment so he could calculate an 8 year car loan.  This is called a Four-Square Contract.  Little did this sales person know that this was a huge turn off to me as a buyer.  He wanted me to buy a vehicle on his terms, using his method to calculate what I could afford and had little concern when I told him what our overall budget for a car was regardless of how it broke down monthly.  I am sure many people look at what they can afford monthly and make decisions that way, but that wasn’t me and until this sales person understood I was not that buyer, it was a pretty frustrating experience.

It doesn’t really matter how you decide what your budget is, either overall what you can afford (which is my personal recommendation) or what you can afford monthly, the point is that you are not obligated to answer any of those types of questions.  I never pretended to have a monthly amount I could afford, in fact I looked the sales person in the eyes and told him that wasn’t how I was going to make my decision several times before he understood I was serious about it. The point is, before you walk into a dealership or ATV lot, you should have an idea of what you want, how much you want to spend, and in what way you feel comfortable dividing up those payments. Once you have those standards in your mind, you hold a lot more of the power to get exactly what you want. I am not suggesting that you can’t be sold on a feature or a payment plan that you hadn’t previously considered (I did cave and paid a little extra to get the DVD player for my kids when I swore I wouldn’t), but having a basis for what you feel comfortable with gives you the ability to make educated decisions rather than feeling talked into things you aren’t sure about.

Fifth: If it is not written in the contract it does not exist. Suggesting this always makes me feel so callous against the world, but unfortunately it is true. Whenever you are buying/financing anything, if the salesperson or finance person promises you something out of the ordinary make sure that it is written and initialed in the contract. Hopefully they would honor the promise regardless of if it were written or not, but there is enough horror stories out there that asking for a little reassurance should seem like nothing in the end.  This also protects you from being soured on the whole experience of purchasing.

Sixth: Don’t wait to consider how you are going to pay for your ATV until you are at the dealership. There are several different loan options that you can think about and investigate before going into a dealership. Dealerships often have their own financing department which can offer incentives including no interest for a period of time or a low interest rate, but sometimes they do not have those incentives and you do not want to be stuck with a less advantageous loan because you didn’t take a couple hours to look into other options, like your local bank or credit union.  It is important to note that just because you have been pre-approved or pre-qualified by a specific lending source does not require you to use that specific loan when buying your ATV.  If you are pre-approved by your personal bank, but the dealership has incentives you want to take advantage of simply do not use that pre-approval to purchase your ATV. Just call the bank and tell them you found other funding.  It is really that simple!

Seventh: When you are looking into different lending options, you can gain a lot of information online. One of the biggest fears that most borrowers have is that they need to apply for a loan before they will be given any information by a lender as to the terms of their loans.  This just isn’t true.  Most lenders have the basics of their loan structures on their websites.  This includes the interest rates for different type of vehicles, including ATVs, the amount of time their loans are for as well, as whether they have fees associated with their loans. Of course, the information provided on the bank’s website is designed to attract borrowers and therefore is typically outlined for stellar applicants and not the everyday Joe, it does give you a good place to start your search before having your credit run and filling out a million applications.  It is also important to know that when making a major purchase, having your credit run will not negatively affect your credit score as long as it is within a reasonable amount of time. So applying for a few different loans over a week should not impact your score, but applying for several over a couple of months may make it look like you are borrowing a substantial amount of money when you aren’t.

Eighth: If you are at a dealership or a lender and something doesn’t feel right to you, just walk away.  There is no reason or rush to obligate yourself to a major purchase without feeling confident in your purchase.  Sales people may chase after you to close a deal or a lender may drop your interest rate a little, but unless you feel like you have a good understanding of what you are buying and for exactly how much, there is rarely harm in taking a day or a few hours to think about it.  I have walked away from major purchases that didn’t feel right for one reason or another to later think maybe I should have pulled the trigger, but I would rather deal with those feelings than the feelings I get when I hastily agree to something I should have walked away from and have to deal with the consequences.

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Types of Loans

Now that you are empowered with some information and attitude about how to approach ATV buying, it is time to start thinking about what types of loans you can consider before walking into the dealership. It is important to remember that even if you are pre-approved for a loan amount before walking into the dealership, you are not obligated to use that pre-approval, regardless of what money you have been approved for before walking into a dealership, a loan is only full processed when that money is used to actually purchase something.  That being said, here are a few different loan types to consider before making your big purchase.


A personal loan is just what it sounds like, a loan made to you because of your person.  This is a loan that a lender will make to you simply because of who you are.  It is not tied to what you are purchasing.  That means that a lender will give you a check and you are basically allowed to spend that money on whatever you want.

There are a lot of great things about getting a personal loan. One of which is that it isn’t directly tied to your ATV so if you were unable to make the payments for some reason, they wouldn’t be able to simply repossess your ATV right off.  Don’t assume this means they won’t be able to recoup their loss from non-payment, but the process isn’t as simple as loans which possess the ATV as collateral.

The disadvantage of exclusively looking at personal loans is that they are incredibly hard to qualify for.  They are typically meant for those people with 750+ credit scores and who have a lot of money in the bank or collateral in their portfolio so that the lender feels totally secure they  will get their money back.   If you are a borrower with a more average credit score and fewer assets that the bank can take in case of non-payment you may still qualify for a personal loan, but the high interest rate and fees will probably make it a less than ideal situation. The other con is that the loans often have origination fees as well as other out of pocket costs that other loans do not.  This makes sense because the bank is taking a bigger risk when giving out money that is not directly tied to its collateral (the collateral in this case is the ATV).

If this is the loan type that seems best suited for your situation, you can obtain a personal loan through banks, credit unions or online lenders.


A consumer vehicle loan is what most people typically think of when they are purchasing any type of vehicle, including an ATV.  These loans are specifically tied to the purchase you are making, whether it is an ATV, truck, car, side by side or motorcycle, which offers the lender a little more protection in case of non-payment. The money in these loans are meant specifically and solely for the use of the approved vehicle, in this case an ATV, and even if you are pre-approved for a larger amount of money, the loan will only be finalized for the actual cost of the ATV purchased.  This means that if you are approved for $15,000 but decide to purchase an ATV that is only $10,000, the loan amount will only be for the final purchase price of the ATV ($10,000), less any down payment you make, and you do not get to take the remaining $5,000 home.

These are the most commonly used ATV loans because they are specifically designed for the purchase of an ATV.  These are the types of loans that the financing departments in dealerships offer, often with incentives.  Incentives you should keep an eye out for are 0% interest for a period of time, no money down, as well as other.  Dealership make a lot of money when they carry the cost of the loan themselves so they try to make the process as enticing as possible even if you have a less than stellar credit rating.

Although these are the most common types of ATV loans it does not mean that there aren’t some concerns. Firstly, make sure that you understand all the terms of the agreement.  These loans are collateralized by the ATV you are purchasing.  This means that if you fail to make a payment, the dealership has the ability to come and repossess the ATV without a lot of questions. Secondly, the interest rates at most dealerships are fairly competitive with banks, but without doing your research you won’t really know how good of a deal you are getting.  Finally, dealership finance departments do a really good job of making their products look amazing while hiding all the downside, so you will need to be vigilant in understanding what you are signing before you sign.

If this seems like the best loan for your situation, consumer vehicle loans are offered through most dealerships, banks, credit unions and online lenders.  Bank and credit unions are often a little more strict about their lending needs than dealerships but there are many lenders who work with people who have damaged credit.


Commercial vehicle loans are loans that are used by business owners who are purchasing an ATV for business use.  This means that the business, rather than the individual, would own the ATV. If you do not own a business or are not planning to use your ATV for your business, this loan really doesn’t apply to you.

If you are a business owner who is buying an ATV for your business, this is a great loan method because it establishes that the ATV is not for you, so it will not affect your personal credit score or finances.  When you purchase the ATV for your business, it will also provide you tax breaks for your business in that fiscal year.

Unfortunately, there are a few things to watch out for with commercial loans.  Although it does not affect your personal finances, the ATV can still be repossessed if non-payment becomes an issue, which can negatively affect your business standing. The interest rate associated with commercial loans can often be higher as there is not necessarily a personal interest in the vehicle, unless you are willing to enter a personal guarantee, which many lenders will require if the business is not well established.  There is also a lot of paperwork to provide as the lender wants to feel secure in the financial standing of the business making the purchase and the need of the ATV.

A commercial loan is something a business owner should look into, but it may not be the best option for a business depending on the circumstances.  Commercial vehicle loans are offered through primarily banks and credit unions, although there are several online lenders as well.


Credit cards are familiar to pretty much everyone as they are offered by basically every major retailer, bank, and companies who are specifically credit card lenders.  Credit cards offer a standing line of credit to the holder with a standard interest rate and no collateralization.

Purchasing an ATV with a credit card is possibly the simplest way to do it.  There is no paperwork, no discussion of terms, no listening to the finance guy go on for hours about things you really don’t understand or want to hear about. Many dealerships actually offer credit cards for this very reason, and some of those cards have reasonable interest rates and many perks to make this payment option even more appealing.  Using a rewards credit card on such a large purchase can also help you rack up points for that dream vacation you’ve been planning or to buy gift cards for the holiday season.

While that may sound great, there is a lot of dangers in using a credit card to purchase an ATV (or anything you can’t pay off quickly).  In fact, it is on my personal no-no list, but since it is an option, I will give you all the cons.  Credit cards often carry ridiculously high interest rates that make the idea of carrying that large of a balance on one incredibly dangerous to your credit and financial future.  Even with a bad vehicle loan and good credit card, you are likely looking at double the interest.  Credit cards only really make sense if you have are just collecting the rewards and have the cash to pay it off by the end of the month.

There is also a risk that the dealership will not charge an entire purchase on a credit card because of the fee that the credit card company charges them for using their service.  Typically, dealerships are charged 3% of the purchase amount every time they run a credit card, and on a $10,000 purchase that is $300 dollars that they just lost off their bottom line.  Some dealerships have a limit for how much they will allow on a credit card and others pass that usage fee to you, which is just adding more to the bottom line of your ATV. If you have a lower credit score, obtaining a credit card with a high enough credit limit may be difficult and if you do, the interest rate could be well into the 20%’s.

If a credit card is the way that you choose to finance your ATV, then you will want to do your homework and get the biggest bang for your buck.  Look into reward cards with huge sign-up bonuses, as well as cards with the lowest interest rate so you can fully understand how much your new ATV is going to cost.


Buying an ATV is exciting, and it should be, so do not let the hassle and stress of figuring out how to pay for it dampen your spirit.  Before you begin the fun part of shopping, test driving, comparing features and getting excited about which ATV you are going to purchase take the time to set yourself up for success.  Create a wish list of features, set a budget for how much you are wanting to spend, and examine the different lending options available to you.  Doing the “boring” parts first will help you enjoy the shopping process and when you find your dream machine, you will be ready to pull the trigger and hit the trails.

For more tips on how to get the best deal, even on new ATVs, check out our article on buying a cheap used ATV.

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