How Stupid Do You Think I Am?

When a young man I know learned that I’m selling my motorcycle, he immediately said, “I’ll buy it. You’d have to finance it, but I’m good for it.” 

I immediately thought, “That’s the dumbest idea I’ve ever heard.” 

This kid is a 20-something, wanna-be motorcyclist, who had an 80cc dirt bike when he was a pre-teenager, making him (in his mind) an “experienced motorcyclist.” To make up for his lack of a motorcycle license and riding skill/experience, he even asked me to give him a free MSF course; since I’m a retired Minnesota MSF instructor. 

I’m selling a $4000 motorcycle. I’m 71 and at the point in life where if I see a light at the end of the tunnel I’m pretty sure it’s the Grim Reaper’s train. What part of this transaction sounds intelligent from my side? Or even his side, for that matter? The risk in that loan is insane. When he crashes it and his wife tells him to get rid of it or hit the road, I’ll be stuck with a mangled motorcycle, little-to-no-money for my long-shot self-financing bet, and the scary possibility of assuming some liability in his crash(es). I would have to be stupid to take that bet. 

I’m not brilliant, but I’m not stupid. (As I often do, after writing that statement I check the heels of my boots to see if there is straw sticking out; since I obviously look like someone who just jumped out of a farm truck.)

From that conversation, I started to think about a bank or anyone else financing a motorcycle. It wasn’t that long ago that Harley-Davidson had to be bailed out by taxpayers for its own inability to manage loan money; to the tune of $2.3B. If Harley, a company that rarely wastes precious cash on frivolous things like engineering and competent product development, can’t find safe buyers for its hippo bikes, who am I to gamble in that market? Pretty much anything a bank would get involved in would be a $6,000 to $40,000 loan to a person who is probably 15,000 times more likely get killed than, for instance, someone asking for a car loan. A company insuring a motorcycle and loan is about as dumb as the bank making the loan, too.
Bankers are not a group widely known for their brilliance, outside of their own closed and in-bred circles. If you’ve read All the Devils Are Here or The Big Short: Inside the Doomsday Machine, you know that what passes for financial skills in these declining years of the United States empire is pretty dismal. Bankers are notoriously financially foolish with even their own money. In fact, the people most of us trust to hang on to our cash are not that smart or good at their jobs. Bankers and other financial gamblers will pay $100 and more to “win” a twenty-dollar-bill in an auction, in a crowd of other supposedly money-wise nitwits. These are the people who will loan you money to buy a brand new $40,000 Harley Davidson; even knowing that the odds are good that you won’t live long enough to pay off the debt. Just as dumb, the insurance industry is betting that you won’t actually ride the damn thing (which is, actually, very likely) which will self-limit their risk to your death and the destruction of the item they are insuring. 

If you have any money squirreled away with a bank, the fact that institution would gamble on a loan for a motorcycle and that someone else (maybe in the same bank) is dumb enough to insure that motorcycle for comp and collision ought to scare the crap out of you. Seriously. How does that not bother anyone with cash in a bank? 

Back to my own situation, I have never loaned money to anyone in my life. If a friend or relative is hard up enough to ask me for money and I have it, I consider it a gift. If I get paid back, I consider that amazing. If not, I never expected repayment and won’t be surprised when it doesn’t happen. That old Shakespeare rule, "neither a borrower nor a lender be" has always made sense to me because of the line that follows, “for loan oft loses both itself and friend.”  As for loaning money for a motorcycle purchase, do not count on me to even be willing to make a gift toward that dumb idea.