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Motorcycle Loans
Applying for a motorcycle loan is a lot like applying for a car loan. The big difference between the two is that buying a car is more often than not a carefully thought out decision, based on research and pragmatism; people buy the car they think best fits their current situation in life. A motorcycle, on the other hand, is more often than not an emotional or sentimental purchase; people have love for bikes, and that love can sometimes lead them to make brash or foolish decisions when it comes to taking out a motorcycle loan.
It’s important to understand that like car salesmen, motorcycle salesmen are working for commission—commission that includes the amount financed and the finance charge that you pay as a buyer. This means that when it comes to establishing a motorcycle loan, salesmen have a great deal of incentive to push you into loan options that will boost their commission, without necessarily providing you with the motorcycle loan best suited to your needs. To avoid that pitfall, many third-party motorcycle loan providers suggest doing careful research beforehand, as you would with a car, You should come to a dealership knowing exactly what kind of bike you’re looking to buy, how much you’re looking to spend, and you should have your motorcycle loan already established. By having your finances firmly in place before you buy, you help to ensure that you will walk away with the best motorcycle loan possible, as well as one awesome bike.
Before securing a motorcycle loan, be sure to check your credit report. When reviewing your credit report, make sure that all information is true and up-to-date, that there are no mistakes or misconceptions, so when you go to apply for your motorcycle loan you’ll already know that you’re getting that best loan available to you.
Some common pitfalls to watch out for when applying for a motorcycle loan:
Don’t let your excitement get the better of your budget. Yes that new $50,000 Harley Davidson may look pretty, but don’t let that steer into a foolish purchase when you know your motorcycle loan was only approved for $20,000. Work with what you have, not with what you wish you had.
Research third-party lenders before securing a loan from a dealership. Salesmen will often pressure you into dealer direct financing to boost their commission. Although such deals often sound nice with their promises of “No money down!” or “Low introductory rates for the first year!” the bottom line is that the more you finance your purchase, the higher the monthly payments and interest rates will be. Through clever phrasing, or hidden catches in the fine print, many dealerships will ultimately steer you into a motorcycle loan which will cost you more over time than you would’ve paid by putting money down upfront (always smart,) or securing a loan from a third party lender. Do your research.
Don’t borrow more than you can afford to repay. Again, unlike a car, buying a motorcycle is often a sentimental indulgence for bike lovers. That said, it’s important to never let sentimentality get the better of practicality. You should always establish a motorcycle loan whose monthly payments you are absolutely certain you can afford. According to the Motorcycle Loan Center, no more than 35% of your dispensable income (after taxes, bills, and expenses,) should be allotted to making payments on a motorcycle loan. Working within that range could mean the difference between a fulfilling purchase, and falling into a hole of debt.
Bottom line: do your research first, have your motorcycle loan secured before you ever step on the showroom floor, and make sure the loan you take out is one you can afford to pay without dragging down your faineances. Do these things, and you should be able to ride the open road in peace, enjoying every minute on your hog.
Topics: Auto Loans |
