Common
Mistakes Motorcycle
Buyers Make When Looking for
a Motorcycle Loan
Author:
Jay Fran
Whether interest rates are high or low or it's the end of a model year with lots of incentives, motorcycle buyers tend to make the same mistakes when shopping for a motorcycle loan. Here are four common mistakes motorcycle buyers make with motorcycle loans.
Shopping
for a motorcycle before shopping for a motorcycle loan. Many motorcycle
buyers enter the showroom looking for a motorcycle before they
determine how much money a motorcycle lender is willing to loan
to them for the purchase of a motorcycle. There is no need to
shop for a $20,000 Harley Davidson motorcycle, if a lender is
only willing to provide a loan amount of $10,000.
Additionally,
once motorcycle buyers enter the showroom slick salespeople often
pressure them into motorcycle loans with much higher internet
rates than they could have gotten had they shopped for a motorcycle
loan at a bank, credit union or online. Salespeople do not like
motorcycle buyers to leave the dealership to get a motorcycle
loan. In the salespersons mind this only increases the chance
of loosing a sale and commission. Therefore, salespeople frequently
try for a quick sale which normally results in pushing motorcycle
buyers to get motorcycle financing at the dealership.
The
bottom-line is that it is always best to shop for a motorcycle
loan before entering the showroom.
Diving
into the unknown motorcycle loan. Motorcycle buyers often jump
into motorcycle loans that they do not completely understand or
may not be the best alternative for them. For instance, in today's
age manufacturers frequently run credit card motorcycle loan promotions
on their private-label credit cards. But these promotions typically
offer a low interest rate for a short term like 12 or 24 months
and have a much higher interest rate after the short promotional
term. On a credit card promotion if motorcycle buyers can not
afford to pay off the loan during the short promotion period,
then they are typically better taking a slightly higher interest
rate on an installment motorcycle loan for a longer term.
Borrowing
too much. The most common mistake the first time motorcycle buyer
makes in not having a clear sense of how much motorcycle they
can afford. This is especially true for young motorcycle buyers
who look to buy the top sport bikes that cost up to $10,000 -
$15,000. What they fail to realize is that financing a $10,000
- $15,000 motorcycle can stretch them to thin, resulting in them
having little cash to enjoy themselves and the motorcycling lifestyle.
They may also have too little cash to pay for insurance, maintenance,
registration or new accessories for their motorcycle.
Not
asking the right questions. The first warning sign that motorcycle
buyers should see is that if they do not understand the type of
motorcycle loan, then they should be sure to ask a lot of questions.
Here
are some good questions to ask:
•
Is
the interest rate fixed or variable? If fixed how long
will it be fixed for?
•
Are
there circumstances that can make the interest rate on
the motorcycle loan change in the future?
•
What
happens if a payment is 30 days late? Does the interest
rate increase?
•
What
happens if a payment is 60 days late? Does the interest
rate increase?
•
How
long is the term on the motorcycle loan?
•
If
the loan is an installment loan, does it use rule of 78
or simple interest? (Simple interest is always better
because it does not penalize the motorcycle buyer if the
loan is paid off early.)
•
What
is the down payment requirement to get the motorcycle
loan?
•
Is
full coverage insurance required?
•
How
much is registration and are these fees included in the
motorcycle loan?
•
Are
there any administrative fees to get the motorcycle loan
and if so how much are the fees? |
Overall,
motorcycle buyers can avoid these common mistakes by spending
a little extra time focusing on shopping for a motorcycle loan
and asking lots of questions.
A
complimentary copy of any newsletter or a link to the site where
the article is posted is greatly appreciated.
About
the author:
Jay Fran is a successful author and publisher at http://www.motorcycle-financing-guide.com.
A comprehensive resource on how to have the best experience and
get the best deal on motorcycle financing, bad credit motorcycle
loans, high risk motorcycle loans and motorcycle buying.
Learn
about The World Of “Upside Down” motorcycle
loans, check this other great article by the same author.
Motorcycle values? Click here
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