When looking for a Motorcycle Loan, most motorcycle buyers make the same mistake. It doesn’t matter what time of year it is, whether interest rates are high or low or if its an end of year model with lots of incentives prior to the new model being released, the same mistakes are made when shopping for a motorcycle loan. And it can be costly!
Here are the most common mistakes made.
Loaning too much Money.
This the most common mistake made by the first time motorcycle buyer. They do not look into their finances and work out how much they can afford to repay. Mostly it is the young motorcycle buyers, who wish to buy the top sports bikes that can cost as much as $10,000 - $15,000. They may not realise how much money they need for other things such as, clothing accessories for their new motorcycle, insurance, maintenance, registration etc. The new motorcycle enthusiast may not realize the cost of financing a $10,000 - $15,000 motorcycle loan can be quite a hefty sum, resulting in them having little cash to enjoy themselves and the motorcycling lifestyle.
Looking to purchase a motorcycle before applying for a motorcycle loan.
Many motorcycle buyers venture to the showroom looking for their new motorcycle before they have even approached the loan company to find out how much money a motorcycle lender is willing to loan to them for them to be able to purchase their new motorcycle. They cannot purchase a $20,000 motorcycle, if the lender is only willing to lend them $10,000. This can and does cause big problems.
Motorcycle buyers also visit the showroom just to ‘look’ before they buy and are pounced on by over zealous salespeople who often pressure them into a motorcycle loan with a much higher interest rate than they could have got had they done their homework and looked for a motorcycle loan at a bank, credit union or online. In the salespersons mind people who come to look first only increases the chance of loosing a sale and their commission if they let them leave. The Salespeople earn a commission from selling the loan as well as a motorcycle to the potential buyers, they do not like the motorcycle buyer to leave the showroom without having made a sale, so they try for a quick sale which normally results in pushing motorcycle buyers to get their finance from them. The obvious answer is always best to shop for a motorcycle loan before entering the showroom.
Don’t rush into a motorcycle loan.
Motorcycle buyers often rush into a motorcycle loan that may not be the best alternative for them. They may not completely understand the terms and conditions of the loan. For instance, motorcycle manufacturers often run promotions on their private-label credit cards for motorcycle loans. However, these usually offer a short term of 12 or 24 months with a low interest rate and for the remainder of the term have a much higher interest rate. With this kind of promotion, if motorcycle buyers can not afford to pay the loan off during the initial promotion period, only taking advantage of the low interest rate then they are would be better taking a higher interest rate on an installment motorcycle loan over a longer period of time.
Knowing the right questions to ask.
Beware! Is the first warning sign that motorcycle buyers should see. You should be sure to ask a lot of questions so that you fully understand the type of motorcycle loan you are being offered and make sure it is right for you.
Here are some good questions to ask:
How long is the term on the motorcycle loan?
Is the interest rate fixed? If so, how long for?
Is the interest rate variable? If so, is it a short term on a low interest rate and then a higher interest for the remainder of the term? (Beware of this one)
Are there circumstances that can make the interest rate on the motorcycle loan change in the future?
What happens if a payment is a few days late? Is there a penalty to pay?
What happens if a payment is 60 days late? Does the interest rate increase?
If the loan is an installment loan, are there any penalties for paying off the loan early?
What is the amount of the deposit required to get the motorcycle loan?
How much is registration and are these fees included in the motorcycle loan?
Do they charge an administration fee to get the motorcycle loan and if so how much?
Is full coverage insurance required?
Can you afford the repayments?
In conclusion, when looking for a motorcycle loan, do your homework, spend a little extra time reading the small print and above all make sure you ask lots of questions. In doing this, and it need’nt take too long, you can avoid these common mistakes.
Happy and safe motorcycling.
For more information about motorcycles visit the website: http://www.usedmotorcycles-4u.com
ABOUT THE AUTHOR:
Tony Harries writes about his love of motorcycles. You can get additional information at his website: http://www.usedmotorcycles-4u.com
0 responses so far ↓
There are no comments yet...Kick things off by filling out the form below.
Leave a Comment