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Motorcyclists, Safety and Bus Lanes
With the depreciation on motorcycles being so enormous after they are driven off the showroom floor, the potential for a buyer owing more on their motorcycle loan than the bike is worth it quite high. Owing more on your bike than it is worth is often referred to as the world of “up side down”.
Many people finding themselves in this situation discover that financial lessons are sometimes the hardest and most expensive to learn. Motorcycle loans of more than 48 months (especially without a down payment) put you in the position of owing more than the value of the bike.
Let’s take a look at this phenomenon.
First, the interest calculation your lender uses can make a big difference in your situation, especially in the first 18 months. There are two primary interest calculations, pre-computed (combined with rule of 78) and simple interest.
Pre-computed interest combined with Rule of 78, is typically the worst situation for a buyer because most of the interest is paid in the first 24 months. Therefore, in the first 24 months little of the monthly payment has gone towards paying down principal. If a buyer wishes to sell or trade in the motorcycle within this timeframe they will likely find themselves owing more than the bike is worth. Statistics show that the average owner trades in every 18-24 months.
Simple interest on the other hand, is much more favorable for buyers since interest accrues on the balance of the loan. However, buyers that extend their loans for greater than 48 months can still find themselves up side down with simple interest. This is especially true if a down payment is not made. The reason this occurs is that the motorcycle depreciates faster than the principal is paid; leaving the balance owed to the lender to be more than the bike can be sold for.
A common view that many people have is that they will just surrender their motorcycle to the lender if they are caught in an “upside down” position. If you are considering this option don’t! Your worries do not just end after your bike is surrendered or repossessed; in fact they are just beginning. The lender will sell your bike at an auction for much less than it is worth. You will still owe the difference between the amount you owed on your loan and the amount the motorcycle sold for at auction. So if you owe $5000 and the bike sells for $1500, you still are responsible for owing the lender $3500. To make it worse lenders may tack on hefty auction fees which you will owe as well. So the net result is that you are now responsible for making monthly payments on a bike you can no longer ride.
So what steps can you take to prevent from being caught “upside down”?
Vespa scooters are one of the oldest names in the scooter business. They have been manufacturing motor scooters since 1946 and their models are in great demand world wide. There are several popular Vespa motor scooters that range in size from 50cc to 200cc.
The Vespa Granturismo has a 200cc engine which is the biggest, fastest and most powerful Vespa ever made. It has a 4-stroke 4-valve engine that is liquid-cooled. With its powerful engine it has the ability to pull away from almost any kind of traffic you could encounter. Even with its larger and more powerful engine it
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The usual way new and even many experienced bikers decide on what bike they are going to buy is to look at what their buddies are riding, or what the magazines have been testing recently.
While both these options have some merit they are not without their problems.
Consider:
| a) | your mate may be a different size from you, they may be more or less flexible, they may be more or less experienced, their riding style and needs may be completely different from yours and so ultimately will be their choice of bike. | |
| b) | Magazine tests, the Read this article in full Buying a Used Motorcycle Can Be a Good Choiceby The Moor BookstoreReasons For Buying A Used Motorcycle:Have you checked out the price of a new bike lately? It wasn't that long ago when you didn't have to fork out that much dough for a new car. In fact, many bikers will remember when you didn't have to pay much more than that for a modest house. The prices for houses and cars have shot up over the years. And, so have the prices of motorcycles. The point is, the price of a new bike can take a good-sized bite out of any budget. Buying a used motorcycle is one way to Common mistakes motorcycle buyers make when looking for a motorcycle loanby Jay FranWhether 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 Tips For Finding A Motorcycle Loan With A Better Credit Scoreby Jay FranIt is common knowledge that motorcycle financing companies base high importance on your FICO credit scores when approving motorcycle loans. However, what many people overlook is that their FICO credit score can dramatically impact the term on their motorcycle loan along with the interest rate that is assigned to the motorcycle loan. In order to gain better
motorcycle loan rates, it is highly important that you think of
your FICO credit score as a picture of how risky you are to the
lender. Your FICO credit score is essentially a benchmark which
motorcycle financing companies use to grade you and assign a
risk to you when applying for a motorcycle |
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