From: noah@astro.as.utexas.edu (Noah Smith)
Newsgroups: rec.motorcycles
Subject: SUMMARY: New Bike Financing
Date: 31 Jul 92 16:37:03 GMT
Distribution: usa
Organization: McDonald Observatory, University of Texas @ Austin
Originator: noah@astro.as.utexas.edu


	This is a summary of the e-mail I have recieved on new bike
financing (original post then replies). Any further comment by e-mail
or Usenet welcome. Thanks to everyone who replied- it has been *very*
informative.

	I am preparing to buy my first *NEW* bike (translation:
preparing to get a loan). I have been gathering info from Austin
area lenders and am trying to sort out my options, problematic with
my limited knowledge of finance.

	ANY COMMENTS AND/OR ADVICE WELCOME (e-mail or Usenet).

	Here are the facts:

	1) The dealership financing is 10% down, 15.99% interest.

	2) Few banks have new motorcycle loans. Those that do will lend
	   75% of the sale price (up to 100% with approval). Payment
	   over 36 months. All have been at around 13% interest,
	   except one (Bank One) at 8.5!!!

	3) Many banks offer "unsecured personal loans". They may
	   have slightly higher interest rates (?) But the loan
	   could be for an arbitrary amount.

	Here are the questions:

	1) What is a "good" interest rate. The rate at 8.5% varies
	   weekly and may not be indicative of a good deal.
	   
	2) Is there an advantage to a "new motorcyle loan" relative
	   to some other type ("unsecured personal", ???).
		
	Thanks in advance. noah@astro.as.utexas.edu

From Ronald.Ih@Eng.Sun.COM Wed Jul 29 19:02:49 1992
The whole problem with vehicle financing is that they will REQUIRE that you get
full coverage insurance. If you are planning on getting a sport bike, that could
add up to a LOT of $$$.

When I got mine, I managed to save up enough to pay for half of it, took out a
personal loan for "furniture" and just got liability coverage (mucho cheaper).
Anyhoo, I got the bike and I paid off the loan in a year and a half so no one
got hurt.  Of course, this is taking the chance that you won't total the bike
before the loan is paid off...

Ron Ih
1990 Kawasaki ZX-6
ronih@zxninja.Eng.Sun.COM

From gtsi!rich@uunet.UU.NET Wed Jul 29 21:25:42 1992
Thought you might be able to use this, I put it together for somebody who was
going through a first time purchase recently. Also see my post in rec.moto 
In article <83218@netnews.upenn.edu> jliu@pender.ee.upenn.edu (Dear John.) writes:
>I just bargained the price of a '92 CBR600F2 down to $5288. Everything was
>pretty set, and THEN the dealer started adding in the misc. charges. After
>including tax and tags and delivery charges, the figure went up to $5881?!

The following is a list, NOT comprehensive, of typical bullshit charges that
you can get from dealers - this is culled from my experiences in the last
two years in being involved in the purchase of 3 cages and 2 motos. No, not
all of them were for me, dammit! :-) Be warned: This is a serious posting.

1) Dealer prep charges - There are legitimate reasons for this. For motos,
the thing has to be unboxed and assembled, filled with liquids, etc. The 
question is how much? You can ask other dealers how much they charge, and
try to compare - they will NOT want to give you this figure up front. Most
moto dealer preps are below $200 for bikes up to $5000.

2) Taxes, tags, titles - USUALLY these are set and can't be fooled with, but
you never know. Pay attention to the figures and you can verify from your 
state agencies how much they should be.

3) "Destination charges" or "Local Dealer compensation" or a variety of 
other creative names: often this charge is 100% bullshit. Really foolish
dealers will make this more evident by some type of "local dealer" label.
Read: profit charged in excess of normal markup. Argue this one to death.

4) Insurance on your financing: this is a classic. They'll charge you usually
about 10% of the amount financed. They may try to convince you it's mandatory.
MAJOR bullshit. If they say it's mandatory, ask for different financing
arrangements. Most good employee compensation includes a clause that will pay
your outstanding debts up to 2-3 times you salary in the event of a disabling
injury - exactly what this charge covers. Get this one taken off, immediately.

5) "List" for the bike: Keep in mind that list price for anything you buy above
$1000 is usually negotiable. For a new moto, the margin is considerably less
than a car, but you can still get points out of them (the old cage saying used
to be that you can take 25% off what they initially ask, but margins have been
dropping lately).

Phrases To Know: "You're only paying $50 over invoice". "You know, I myself
paid more for this bike/cage!". "I can only offer this deal for today". "The
promotion that allows me to offer you this figure ends XXX". "I think I can
get this by financing".

Any of the above means you are still paying to much. Asking for the invoice
will teach you nothing. They'll hand you one that says you're spending $50 more
than what they paid. Upon selling the bike, they send the serial number back to
the manufacturer, who promptly sends them a check for a couple thousand. Any
time they imply that you can't leave or you loose the price, leave. It's a
pressure tactic and you don't have to take it.

Watch out for the "making friends" salesperson. "I agree that I should be able
to give you this price, but the [insert powers that be] just won't agree to
it". Don't feel special when they "call in the manager". It's S.O.P (I went
through _three_ levels of managers when I bought my cage! )

Watch out for the Post Sales Ripoff Cuties. These are almost always very nice,
good looking members of the opposite sex (whatever yours happens to be). They
will try to sell you tire insurance, extra paint coating, super extended
warranty, this, that, or the other thing. Keep this in mind: They've already
sold you the vehicle. They wouldn't be trying to sell you ANYTHING else unless
they can make a profit off it. Profit for them, loss for you. If you must have
an extended warranty for your concious, make sure it is transferable. Most
are not. Also, keep in mind you can usually buy extended warranty up until the
last day of the regular warranty on most vehicles.

Good luck, Jim. This post will self destruct in five seconds.
-- 
Rich Lawrence - "Stinger" - DoD#9630 '92 Seca II - Buckaroo Banzai lives!
Sysop/Hallucination: Full UseNet,Fido,Relay, 2GB+ IBM/Amiga  1-703-425-5824
    rich@halluc.com   rich@gtsi.com   CI$:71101,2272   Fido:1:109/345
 HEY YOU! Are you going to the East Coast DoD thing or not? Read rec.moto!

From fist@iscp.bellcore.com Thu Jul 30 08:03:04 1992
If you finance it (ie: You dont have the bill of sale in
you possession) then you are going to have to have full
coverage.
If you take out a personal loan [either secured or un secured]
you will have the title, now if you can handle loosing the bike
through theft or collision I would go the personal loan route.
This also allows you to trade the bike in on a newer one with
out the bike being paid off which is a nice way to upscale
to what you want.
When I got my first bike loan in 81 my bank never asked
about insurance, so I never brought it up with them, and
all I had was liability basic coverage because in NJ your
med is under your car medical and your normal medical such
as BC\BS. If you plan on trading up in a year or so I would
look for a dealer that also carries the brand you want to
up to such as a Yamaha/HD dealer, that way you get a better
trade in even when switching brands from Yamaha to HD.
Rich
-- 
##########################################################
There are only two types of ships in the NAVY; SUBMARINES 
                 and TARGETS !!!
#1/XS1100LH	#2/10/10/92

From ch3c+@andrew.cmu.edu Thu Jul 30 09:55:58 1992
Your address says that you are at the U of Texas.
See if they have a credit union on campus and if you
are eligible to borrow from it. Most credit unions have
lower financing rates than banks.

The Carnegie Mellon credit union offeres 8.9% on any
new vehicle. I will finance my next bike (next spring)
this way.

Good luck.

|Chris Hogan                    |         1127                 |     
|ch3c+@andrew.cmu.edu           | Soft as the massacre of Suns |
|                               | By Evening's Sabres slain    |        
|CB-1                           |             emily dickinson  |  

From jeq@i88.isc.com Thu Jul 30 10:00:10 1992
Almost without exception, a secured loan will cost less than
an unsecured loan.  I'd expect, though I haven't checked rates
in a long while, that an unsecured personal loan would run close
to or above the dealer finance rates.  (16% for a loan doesn't sound
all that good.  The dealer is undoubtedly getting a kickback from
the lender for a rate that high.)

Figure out what the payments would be with the higher rates loans.
The figure out what they'd be initially for the 8.5% loan.
Interest rates are supposed to stay down for a while (at least until
after the elections) - if you take the 8.5% loan, and make the payments
as large as the others, when the higher interest rates start to
kick in, you'll have considerably less principal to pay interest on.
(Also worth checking - are there any caps on how high the rate goes up,
or is it tied directly to the prime rate, whatever that does?  Also,
are early payments applied to principal?  Usually they are.  At any rate,
I'd be surprised to see the prime rate go up 8 points in the next year.)

Hope this helps,
-- 
Jonathan E. Quist                              INTERACTIVE Systems Corporation
jeq@i88.isc.com  '71 CL450-K4 "Gleep", DoD #094        Naperville, IL
        There are many things a person should experience in a lifetime.
       Among them are an infant's first cry, and an infant's first laugh.

From Alan_Asper@trigate.sbc.com Thu Jul 30 11:27:21 1992
Do NOT get an unsecured personal loan. You might as well put the bike on your 
Visa card, the interest rates are so high.

Check with a credit union. You can usually take out a loan only if you have an 
account with them, but that can be solved by putting 50 dollars into a 
checking account to make you eligible for loans. That's what I did when I 
bought my EX-500 last year. I got an 11.5 % loan for 3 years, and the credit 
union financed practically the whole thing. That financing only 75% stuff is 
bullshit. 
There are good deals out there; just shop around. Don't pay more than 13% 
interest.
Good luck!
Alan

From apple.com!motcsd!mcspdx!adpgate!adpplz!martin@cs.utexas.edu Thu Jul 30 20:54:27 1992
>	I am preparing to buy my first *NEW* bike (translation:
>preparing to get a loan). I have been gathering info from Austin
>area lenders and am trying to sort out my options, problematic with
>my limited knowledge of finance.
>
>	ANY COMMENTS AND/OR ADVICE WELCOME (e-mail or Usenet).

>	4) In your experience, WHAT WHOULD I DO???

What should you do?  Save up for the bike.  Given the price of money 
these days, I think all those rates are too high.

What will you do?  Get a low-interest loan from any credit union you
qualify for.  CU's are the best deal I've found.  For God's sake, don't
take the dealership's loan!  You could do as well or better on a 
credit card!

Karen Black

From bade@wombat.austin.ibm.com Fri Jul 31 08:56:40 1992
Joe Senner just financed his new K100RS from liberty National
Bank in Austin at 9.9% which is about the best rate I've
seen arround.  I have my K75 financed with them.  What type
of bike are you getting, based on the rate you quoted from
the dealer I'd say it's not being bought from woods.

Give us a call when you get it we can all go riding...

Steve Bade