You’ve been thinking about owning your first motorcycle since you were 12 years old. You heard your neighbors rev up their Harley Davidson motorcycles, there you were, starring with open jaw as it took off up the street. Totally awesome. Since then you tend to see them everywhere, in your neighborhood, on family vacations, on the showroom floor, at the local dealer, and of course on the internet. Now you are finally of age and you just can’t wait to get one of your own. However, like most people your age, you just can’t afford one.
Then one day you heard about motorcycle loans. Woo Hoo, now your mind is swimming in possibilities. Well hold on there buckaroo, before you go flying over the handle bars after hitting the financial speed bump, do yourself a favor and look a little deeper into your situation and learn as much as you can about the different types of motorcycle loans and the process of getting one and paying it off.
One of the most common mistakes is to search out your motorcycle before you have the money in hand. This usually results in getting talked into getting financed by the dealer’s private label lender. It is also quite easy for most dealers to sweet talk a new buyer into something that is most likely beyond their means. After all that awesome, shiny new motorcycle is right there in front of you practically selling itself. If you don’t have any idea of how much you can afford, as well as all your facts and terminology together you will most likely get talked into extra fees that you wouldn’t necessarily have to pay if you got the loan through another lender. Extended warranties, document fees, and Guaranteed Auto Protection insurance. The dealer makes money from these extras and he or she wants to sell them. If you walk in and have that blank stare when these fees are mentioned the dealer will know your are a newbie and may be more likely to try to take advantage of that fact.
It will be to your benefit to learn about the loan process and actually get the loan before you go searching for your motorcycle. Get the facts and do the math. How much can you really afford to pay on a monthly basis, how much of the loan will you have to part with up front. Think about insurance, cost of gas, a helmet, routine maintenance. These items alone may not be that expensive but they will add up quickly.
You best offer will come by searching around and exploring the different options. Credit unions can sometimes offer great loans because they make up only a small portion of the loans they offer as opposed to a dealer who only deals with motorcycles.
One of the first stops you should make is to the local bank. Your local bank will most likely not have a lot of motorcycle loans in their portfolio and it is in their interest to diversify, therefore the terms they offer may be more palatable than the dealers. A personal loan is always an option as well though interest rates tend to be a bit steeper. Then there is the internet, a veritable warehouse of information on all the language you may be unfamiliar with as well as a myriad of lending institutions that could possibly get the loan process done over night.
So the two best pieces of advice you should take to heart is to learn the ropes, the terminology and the process of acquiring your motorcycle loan through to the final payment. And avoid the middle man. Rarely will a dealership that is acting as liaison to the actual lender be able to save you money. Dealers make money on commissions so the more add ons, including the motorcycle loans themselves, the dealer can sell, the more money the dealer will make.