Welcome To The World Of "Upside Down" Motorcycle Loans!
by: Jay Fran
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#8221;.
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 “up side Down#8221; 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 “up side Down#8221;?
1. Find a lender that uses simple interest. Avoid lenders that use pre-computed / Rule of 78 interest calculations.
2. Always try to put money down on your purchase.
3. Try to avoid motorcycle loans that extend past 36 months.
About The Author
Jay Fran is a successful author and publisher for a website that specializes in Motorcycle Loans: Poor Credit Approvals Available. A comprehensive resource on simple interest motorcycle financing, poor credit, new, used and bad credit motorcycle loans.
http://www.motorcycle-financing-guide.com/
This article was posted on January 11, 2005
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duminică, 25 decembrie 2011
Used Car Auctions: Do's and Dont's
Used Car Auctions: Do's and Dont's
by: Thomas H. Miller
This is Part 1 of a 4 part series on how to buy a car at an auction
So you are looking for a car or truck, but you're tired of running around town and finding other people selling their "headaches" through the local classifieds, or dealers offering "cream-puffs" for inflated retail prices. All you want is a good vehicle for a good price. Period. Does such a deal exist? Yes, indeed! Repossession auctions are becoming more and more popular across the country. I have been attending them for over 20 years, and have purchased many cars and trucks at bargain prices - everything from a brand new car (still with the window sticker on it and 3 miles on the odometer) for $1,100 below the sticker price, to a conversion van with 99,000 miles on it. Both of these vehicles are still in the family and running strong.
1. What I'd like to do here is share my experiences with you, and give you some tips on how you, too, can find these bargains.
First of all, how do you find the auctions? Your local paper is a good place to start. Many banks and other financial institutions (such as GMAC) list the times and places of their auctions in Sunday papers under "Auctions" or "Cars for Sale". Also, if there is a "legal publication" in your area, that publishes court proceedings, bankruptcy notices, etc., this is another source for repossession auto auction notifications. One other way to find them is to call your local banks and ask for the Installment Loan Department. They should be able to provide you with details on their particular auctions. Many even have regular mailing lists, where they will automatically send you a notification of their auction and even a listing of what vehicles will be included. While some institutions restrict their auctions to dealers only, most will allow the public to attend and bid. Once you have found an auction, be sure to get all the details BEFORE you go. You'll need to know if there are any minimum bid requirements, what type of payment they need, and what type of paperwork they provide to the purchasers. Many auctions will sell everything to the highest bidder, no matter how low the bid is. Still others may have a minimum bid they must get, or they "buy back" the car and save it for the next auction. Most institutions retain the right to bid, so be aware that you may be not only be bidding against other people interested in the vehicle, but also against the auctioneer!
While most auctions will publish their requirements for payment along with the auction notification, DON'T assume that that's all there is to it. Find out if they expect cash only, certified checks or personal checks. Also, many require full payment immediately after the sale, while others may require a non-refundable deposit with the balance due in a few days. All too often I have seen people make costly errors at auctions because they didn't understand these payment rules.
In this day and age of red tape, titles, liens, etc., the paperwork an institution provides is as important as anything else. In New York State, for example, if the institution sells the vehicle with "as-is" marked on the bill of sale, you may encounter a legal nightmare that involves a major full-vehicle inspection and an 8 to 10 week wait for a title search and registration procedure that will prevent you from putting the vehicle on the road for months. It is imperative, therefore, that you find out specifically what paperwork the institution will give you when you purchase a vehicle through their auction. If you plan on registering the car right away, tell them that and make sure you are satisfied that they will give you what you need. If in doubt, contact your local Motor Vehicle office ahead of time to insure that you'll be able to proceed with what the institution will be giving you. Laws vary dramatically from state to state. Above all, make sure that all liens have been satisfied before you purchase a repossessed vehicle. Most banks and financial institutions will give you some type of form to verify this.
OK... now you've found the auction and understand the rules and requirements. The next step is finding the vehicle that fits your needs. In order to know what the vehicle's value is before you bid on it, you'll need a good resource of wholesale and retail pricing. One good source is the NADA "Blue Book". This book lists cars and light trucks by manufacturer and body style, giving you the current average wholesale and retail for each. I have used a book called "Edmund's Used Car Prices" for the past 15 years or so, and found them to be a very reliable source. Like the NADA book, it lists the cars and light trucks by manufacturer and year (usually the past 7 model years), and provides the vehicle's original list price, current average wholesale and retail. It also provides you with a list of popular options, and what they add to the value of the car or truck. There's plenty of details in the book which I won't go into here. Just make sure you read the "How to Use This Book" section thoroughly before you start using it. Options such as air conditioning, power steering and brakes and type of transmission may dramatically affect the value of the vehicle. Also, excessive mileage for that particular year car or truck will affect the value. So, read the book and know how to use it BEFORE you get to the auction.
Visit my site at www.helpmebuyacar.bravehost.com
About The Author
My name is Thomas Miller, I'm student here in Detroit, MI. I love to do research, I love to write and most of all I cars.
thomasmiller2005@aol.com
This article was posted on December 30, 2004
by: Thomas H. Miller
This is Part 1 of a 4 part series on how to buy a car at an auction
So you are looking for a car or truck, but you're tired of running around town and finding other people selling their "headaches" through the local classifieds, or dealers offering "cream-puffs" for inflated retail prices. All you want is a good vehicle for a good price. Period. Does such a deal exist? Yes, indeed! Repossession auctions are becoming more and more popular across the country. I have been attending them for over 20 years, and have purchased many cars and trucks at bargain prices - everything from a brand new car (still with the window sticker on it and 3 miles on the odometer) for $1,100 below the sticker price, to a conversion van with 99,000 miles on it. Both of these vehicles are still in the family and running strong.
1. What I'd like to do here is share my experiences with you, and give you some tips on how you, too, can find these bargains.
First of all, how do you find the auctions? Your local paper is a good place to start. Many banks and other financial institutions (such as GMAC) list the times and places of their auctions in Sunday papers under "Auctions" or "Cars for Sale". Also, if there is a "legal publication" in your area, that publishes court proceedings, bankruptcy notices, etc., this is another source for repossession auto auction notifications. One other way to find them is to call your local banks and ask for the Installment Loan Department. They should be able to provide you with details on their particular auctions. Many even have regular mailing lists, where they will automatically send you a notification of their auction and even a listing of what vehicles will be included. While some institutions restrict their auctions to dealers only, most will allow the public to attend and bid. Once you have found an auction, be sure to get all the details BEFORE you go. You'll need to know if there are any minimum bid requirements, what type of payment they need, and what type of paperwork they provide to the purchasers. Many auctions will sell everything to the highest bidder, no matter how low the bid is. Still others may have a minimum bid they must get, or they "buy back" the car and save it for the next auction. Most institutions retain the right to bid, so be aware that you may be not only be bidding against other people interested in the vehicle, but also against the auctioneer!
While most auctions will publish their requirements for payment along with the auction notification, DON'T assume that that's all there is to it. Find out if they expect cash only, certified checks or personal checks. Also, many require full payment immediately after the sale, while others may require a non-refundable deposit with the balance due in a few days. All too often I have seen people make costly errors at auctions because they didn't understand these payment rules.
In this day and age of red tape, titles, liens, etc., the paperwork an institution provides is as important as anything else. In New York State, for example, if the institution sells the vehicle with "as-is" marked on the bill of sale, you may encounter a legal nightmare that involves a major full-vehicle inspection and an 8 to 10 week wait for a title search and registration procedure that will prevent you from putting the vehicle on the road for months. It is imperative, therefore, that you find out specifically what paperwork the institution will give you when you purchase a vehicle through their auction. If you plan on registering the car right away, tell them that and make sure you are satisfied that they will give you what you need. If in doubt, contact your local Motor Vehicle office ahead of time to insure that you'll be able to proceed with what the institution will be giving you. Laws vary dramatically from state to state. Above all, make sure that all liens have been satisfied before you purchase a repossessed vehicle. Most banks and financial institutions will give you some type of form to verify this.
OK... now you've found the auction and understand the rules and requirements. The next step is finding the vehicle that fits your needs. In order to know what the vehicle's value is before you bid on it, you'll need a good resource of wholesale and retail pricing. One good source is the NADA "Blue Book". This book lists cars and light trucks by manufacturer and body style, giving you the current average wholesale and retail for each. I have used a book called "Edmund's Used Car Prices" for the past 15 years or so, and found them to be a very reliable source. Like the NADA book, it lists the cars and light trucks by manufacturer and year (usually the past 7 model years), and provides the vehicle's original list price, current average wholesale and retail. It also provides you with a list of popular options, and what they add to the value of the car or truck. There's plenty of details in the book which I won't go into here. Just make sure you read the "How to Use This Book" section thoroughly before you start using it. Options such as air conditioning, power steering and brakes and type of transmission may dramatically affect the value of the vehicle. Also, excessive mileage for that particular year car or truck will affect the value. So, read the book and know how to use it BEFORE you get to the auction.
Visit my site at www.helpmebuyacar.bravehost.com
About The Author
My name is Thomas Miller, I'm student here in Detroit, MI. I love to do research, I love to write and most of all I cars.
thomasmiller2005@aol.com
This article was posted on December 30, 2004
CarInsurance.com Is Available At All Dealerships...With Internet Access!!
CarInsurance.com Is Available At All Dealerships...With Internet Access!!
by: Erick Pace
You are ready to buy your first car. Researching the right vehicle can be a daunting task. You search for the right type of vehicle you need, the color you want, the type of interior. You have spent countless hours narrowing down the right vehicle for you. You find out what the MSRP (Manufacturer's Suggested Retail Price) is by using the following services:
Offline:
Consumer Reports Magazine
Auto Week Magazine
Your local newspaper's auto section
Local dealers
Online:
Consumer Reports
Edmunds.com - www.edmunds.com
Kelly Blue Book - www.kbb.com
NADA guide book - www.nadaguides.com
Now you have the right model in mind. You are ready to purchase a car. You now have a good idea of how much you should spend, how much you are willing to spend.
You go to the dealership and spend hours negotiating a price. After you have agreed to a price, the sales clerk asks do you have insurance. Because this is your first vehicle, the thought never crossed your mind. The sales clerk says you will not be able to drive the car off the lot until you have secured insurance. You get out a phone book and start calling around for insurance quotes. You get several prices and you are instructed that you must come to the insurance agency to fill out paperwork. You must then go back to the dealership and show them your insurance policy. This has been a long and stressful day.
Carinsurance.com is ready to help. How can you get the best deal on auto insurance?
Use carinsurance.com at the dealership and you will be able to purchase insurance and print your proof immediately (in available states). With carinsurance.com, you get to shop around and look for the best deal. Find out if you save with carinsurance.com when you get your auto insurance quote. In addition to great rates and reliable coverage, carinsurance.com offers tools and information to help you understand your auto insurance coverage better.
Whether you are a first time car buyer or a seasoned pro, carinsurance.com offers you the ability to shop for insurance in one easy website. Next time you are stuck at a car dealership, go to a computer, type in carinsurance.com and find the best rate without leaving the store.
About The Author
Erick Pace is a representative of CarInsurance.com. You can visit CarInsurance.com at http://www.carinsurance.com or contact them at 1-877-327-8728.
CarInsurance.com's online insurance marketplace gives an opportunity to consumers and to insurance companies. We offer the ability to shop for car insurance online.
Consumers can receive quotes from many insurance companies, in some states you are able to purchase your insurance instantly, online. You don't have to drive your car to buy car insurance. Buy online...anytime!
This article was posted on April 21, 2005
by: Erick Pace
You are ready to buy your first car. Researching the right vehicle can be a daunting task. You search for the right type of vehicle you need, the color you want, the type of interior. You have spent countless hours narrowing down the right vehicle for you. You find out what the MSRP (Manufacturer's Suggested Retail Price) is by using the following services:
Offline:
Consumer Reports Magazine
Auto Week Magazine
Your local newspaper's auto section
Local dealers
Online:
Consumer Reports
Edmunds.com - www.edmunds.com
Kelly Blue Book - www.kbb.com
NADA guide book - www.nadaguides.com
Now you have the right model in mind. You are ready to purchase a car. You now have a good idea of how much you should spend, how much you are willing to spend.
You go to the dealership and spend hours negotiating a price. After you have agreed to a price, the sales clerk asks do you have insurance. Because this is your first vehicle, the thought never crossed your mind. The sales clerk says you will not be able to drive the car off the lot until you have secured insurance. You get out a phone book and start calling around for insurance quotes. You get several prices and you are instructed that you must come to the insurance agency to fill out paperwork. You must then go back to the dealership and show them your insurance policy. This has been a long and stressful day.
Carinsurance.com is ready to help. How can you get the best deal on auto insurance?
Use carinsurance.com at the dealership and you will be able to purchase insurance and print your proof immediately (in available states). With carinsurance.com, you get to shop around and look for the best deal. Find out if you save with carinsurance.com when you get your auto insurance quote. In addition to great rates and reliable coverage, carinsurance.com offers tools and information to help you understand your auto insurance coverage better.
Whether you are a first time car buyer or a seasoned pro, carinsurance.com offers you the ability to shop for insurance in one easy website. Next time you are stuck at a car dealership, go to a computer, type in carinsurance.com and find the best rate without leaving the store.
About The Author
Erick Pace is a representative of CarInsurance.com. You can visit CarInsurance.com at http://www.carinsurance.com or contact them at 1-877-327-8728.
CarInsurance.com's online insurance marketplace gives an opportunity to consumers and to insurance companies. We offer the ability to shop for car insurance online.
Consumers can receive quotes from many insurance companies, in some states you are able to purchase your insurance instantly, online. You don't have to drive your car to buy car insurance. Buy online...anytime!
This article was posted on April 21, 2005
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