Are you looking for a motorcycle? Don't worry! 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.
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 losing 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.
Motorcycle buyers often jump into motorcycle loans that they do not completely understand or may not be the best alternative for them. On a credit card promotion if motorcycle buyers cannot 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.
The most common mistake the first time motorcycle buyer makes in not having a clear sense of how much motorcycle they can afford. They may also have too little cash to pay for insurance, maintenance, registration or new accessories for their motorcycle.
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?
Peterson Richard is writer of Car Title Loans.For more information about car title loans in toronto, midwest title loans chicago visit www.cartitleloanss.com
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