Are you looking to buy a new or used motorcycle and want to get the best deal possible on financing? Or even worse you have been through the process of buying a bike before and feel that lenders made the financing options so confusing that you got ripped off.

With so many motorcycles available on the market today, many people completely ignore the motorcycle financing process because they are overwhelmed by selecting a bike. As a result, over and over again buyers make the same mistakes when looking for a motorcycle loan.

Here are some key mistakes many cycle buyers make that you should avoid when you choose to finance a new bike.

1. Being Afraid To Ask Question

Over and over again during the financing process one of the most common mistakes cycle buyers make is not asking enough questions.

A highly common situation in a dealer is for the dealership to offer customers private-label credit card financing from a manufacturer like Honda, Polaris, Suzuki, Kawasaki or Yamaha.

While private-label credit card financing may be a good option for a small percentage of cycle buyers, it certainly is not the best option for most buyers since the lender can change the interest rate on the loan.

You must realize that you can not make the best financial decision for your future if you do not ask question during the finance process. You must also realize that a dealer may put you in a loan program that makes the dealership money, but is not the best alternative for you to finance your bike.

Here are some critical questions you should ask during the financing process.

Is the financing via a revolving private-label credit card or a standard fixed installment loan?

Can the interest rate on this motorcycle loan change?

What is the lowest interest rate I can get approved for?

If you need bad credit motorcycle financing, does the lender specialize in bad credit approvals?

What are the late fees if my payment is 30 days late? Can late payments cause the interest rate to increase?

How long is the term on the motorcycle loan? Will the loan be paid off at the end of the term?

Can the lender call the loan due in full at anytime? Note: Some credit unions can do this.

What happens if a payment is 60 days late? How does this affect my credit?

Does the loan use simple interest or Rule of 78? (Stick with simple interest it does not penalize you if the loan is paid off early like Rule of 78.)

Is there a down payment requirement? Does the lender require more full coverage motorcycle insurance?

Are there any additional document fees that may be charged?

What is the best installment loan option for me? Note: Try to avoid private-label credit card financing.

2. Shopping for a motorcycle prior to shopping for a motorcycle loan

In today’s age with the internet it is very easy to read reviews on motorcycles.  But one of the number one complaints from dealers is that new motorcycle buyers spend way to much time getting their mind set on a bike they can not afford.  It makes little sense to shop for a motorcycle before shopping for lenders that will provide you a loan.

With motorcycle finance, the above point is highly important because the lender market is very fragmented.  The fragmented market condition drives wide differences in the credit scoring systems from lenders, which can result in big variations on approval amounts.  For instance, one lender may approve a buyer for $8000, and another lender my give the same buyers $12,500.  Without shopping for a loan before a bike, buyers may choose a motorcycle that they can not afford.

3. Borrowing too much

Just because a lender approves you for a $15,000 motorcycle loan, that does not mean you should borrow that amount.  Borrowing too much money can put your financial future at risk especially since motorcycles depreciate very fast.  You really need to evaluate your budget and make sure you can afford the payment that is presented with your loan.  You also need to make sure that your payment is fixed and can not increase.  All installment loans have fixed payment for the entire term of the loan. But watch out for private label credit card loans because the payment can over double after the promotional term.

4. Not Getting Your Credit in Line

Many applicants are looking for bad credit motorcycle loans, but getting approved with poor credit can be challenging.  It is important that bad credit applicants work with lenders that specialize in helping people with past credit problems.

More importantly, it is critical bad credit applicants get their credit inline.  This does not always mean you need full credit repair.  There are simple things that can be done which can significantly help approval.

First, if you have bad credit you should check your credit report for errors.  Since your credit report has been touched by many creditors there is a high percentage chance you could have errors on your credit report.  If you find errors contact the creditor and tell them to fix it immediately.

Secondly, check your background information and make sure the address on your motorcycle finance application matches the address on your credit report.  Sometimes lenders use automated scoring and if the addresses do not match then your application will automatically be declined.

Lastly, contact the credit bureaus and put a personal statement on your credit report stating why you had credit issues in the past.

Motorcycle buying is an exciting experience, so don’t let lender’s options confuse you. Use this site to find straightforward motorcycle financing information that you can trust. The goal of this site is to simplify the process of getting a motorcycle loan. We cover a variety of general topics as well as topics like after bankruptcy, guaranteed, and bad credit motorcycle loans.

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