Common mistakes motorcycle buyers make when looking for a motorcycle loan

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 the author’s information and an active live link
to www.motorcycle-f
inancing-guide.com - Motorcycle Financing & Bad Credit
Motorcycle Loans 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.

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