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Snowmobile for Sale: Should You Finance Your Winter Toy?

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Winter is definitely here and you may be thinking about enjoying this early winter snow with a new snowmobile. You may wonder whether you should finance the sled or pay cash for it. If so, you can begin by asking yourself a couple of questions: Do have enough cash to purchase the snowmobile out of pocket? If I take out a loan, can I afford another monthly payment? Do I have to put insurance on the snowmobile? How much do I really want to spend?

If you don’t have enough cash to cover your big purchase, consider some financing options:


Credit Card—This is often the first option people consider, but it’s not necessarily the best one, particularly if it will take you a while to pay it off. Once you swipe, you will be charged interest and the rates can keep increasing. The credit card companies will have you pay between 2% – 4% of the principal balance for your monthly payment, which could end up costing you thousands of dollars for the one purchase. It could take years to pay off your purchase if you do not make more than the minimum payment each month.


Personal loan—A personal loan can be a much better choice for most people. It’s true that financial institutions can have restrictions on getting a personal loan. They may set a low loan limit and restrict how much unsecured debt you can have based on your debt to income ratio, and the interest rate will be higher than that of a secured loan. However, the financial institution won’t require you to have insurance on your snow machine, and the collateral (the snow machine) will be yours; you own it, not the credit union or bank. Because it will be a fixed-rate loan, you will have a monthly payment that is the same every month, with an exact payoff date. And once you’ve been approved for the loan, you will have buying power with the seller of the snowmobile by knowing how much you can afford.


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Other Secured LoanA secured loan is often the best option because the interest rate will be much lower. Much like a personal loan, it has a fixed-rate, so you will pay the same amount every month and will know the payoff date. The reason you get a lower interest rate with this loan is because your snowmobile will secure the loan. Therefore, you will need to have insurance on the snowmobile. The loan check will be made payable to the company you are purchasing from, so you will need to know who you are purchasing the snow machine from and the total amount of the purchase.


A snowmobile can be a big purchase to think about. In Vermont, we can pay a lot due to the higher cost of heating fuel, plowing, winter clothing, and other seasonal costs; so when thinking about adding another payment to your budget, you will also have to factor in some additional cost for purchasing a snowmobile.

In many states you will to pay to utilize the snowmobile trails and the cost can run from $100.00 to $200.00, depending on which state you choose to ride your snowmobile in. You will have to register your snowmobile if you are riding on any state trails, and also have insurance on your snow machine. So when you are thinking about purchasing your winter toy, don’t forget about the extras!


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About Christine Davidson

Christine Davidson is a former employee of VSECU. She has two children and lives with her husband in Northfield.
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