Motorcycle Loans
Common Mistakes Motorcycle Buyers Make When
Looking For A Motorcycle Loan
by 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.
Copyright (c) 2004, by Jay Fran
This article may be freely distributed as long as the copyright,
author's information and an active live link to http://www.motorcycle-financing-guide.com
is published with the article.
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. |
