When you're buying a motorcycle you need to know about bikes, but you also need to know about how to buy a bike, and that has nothing to do with engines and manufacturing. One important detail where a lot of people that purchase motorcycles go wrong is getting the right loan.
How much the loan agent is willing to loan you is a good way to figure out what kind of bike you can afford to buy. Prices vary a lot between different models, and at the beginning of the year when new models come out they are generally more expensive than at the end of the year when dealers are trying to get rid of old inventory to make space for the next year's models. But through all this one thing remains constant, and that is the fact that if you don't have the cash, you're going to need a loan. Don't fall for the tricks. Remember that you have alternatives to purchasing a loan from the dealer. Don't get caught up in the pressure to buy a bike and forget that this deal is really all about money. You can go to the bank, the Internet, or to a credit union and apply for a loan, so don't let anyone push you around.
The best thing you can do is shop around before you even go into the bike shop, so that you go in there knowing what you're working with. You are now in a position to fight for the best price, but if you don't know what your options are then you have to take the word of the person who is trying to sell you a loan. That is never a good idea.
There are many mistakes that people commonly make, and the person who gives you the loan is apt to make a lot of money off people who don't do their homework before signing on that dotted line. Here are some things to think about:
Be careful about reading the fine print. If there is a special low interest rate for a short period of time, but then the rate increases to a much higher rate (as with many credit cards) it is not advisable to take that deal unless you are surely able to pay off the loan before the high rate kicks in.
If you can't, it is probably a better idea to opt for a different kind of loan, even if you end up paying a higher interest rate. You don't want to get caught with that inflated interest rate at the end of the promotional period.
Another thing is to remember your budget. Don't borrow more than you can afford to borrow just so that you can have a shiny bike. Remember you're going to have to buy gas, insurance and pay for maintenance, and you have a life to live than involves other expenses as well.
Make sure you know what you're signing. There are a lot of loopholes that a layman misses the first time he reads a technical legal document, and lenders use these loopholes to get you to pay more than what you planned for. What is the time period of the term? Is the interest rate fixed, and if so is it permanently fixed? If not, when can it change and for what reasons? Does it have to be full coverage? What are the registration fees, and what other fees are there? Is there a late payment penalty? Does late payment affect the interest rate? Does the program use simple interest or the rule of 78?
Remember, what you don't know can really hurt your pocket and affect your way of life. It is worth the effort to do the extra research before going out there and buying a bike.
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