| Like cars, many new motorcycles depreciate very | | | | value of the motorcycle. This makes it nearly |
| quickly after they are driven out of the dealership. As | | | | impossible to trade in the bike or sell it during the first |
| a result, if you are a motorcycle buyer looking for a | | | | 24 months of the motorcycle loan. |
| motorcycle loan or financing, it is important you | | | | A simple interest calculation is therefore the best |
| understand that not getting the right type of | | | | alternative for a motorcycle buyer because it |
| motorcycle loan can put you in the position of owing | | | | contributes less to interest (than pre-computed |
| more on your motorcycle than it is actually worth if | | | | interest) in the early years of the loan and more to |
| you were to sell it. This occurs with some motorcycle | | | | paying down the value of the motorcycle. However, |
| loans because the value of your motorcycle | | | | if you have a motorcycle type that traditionally |
| depreciates faster than you are paying down the | | | | depreciates quickly you can still be affected |
| principal on the motorcycle loan. This makes it very | | | | negatively with your motorcycle loan especially if you |
| difficult to sell or trade in your motorcycle if you | | | | opt for a zero down motorcycle loan with terms of |
| have not paid off the loan. | | | | 48 month or more. |
| Most motorcycle buyers feel that they will pay off | | | | Here are 6 steps you can use to help you get the |
| their loan before they sell their motorcycle, but this is | | | | most from your motorcycle loan and to help you get |
| simply not the case. Many motorcycle buyers get | | | | prevent from owing more on your bike than it is |
| loans for 60 months or greater to lower their | | | | worth if you decide to sell it or trade it in during the |
| monthly payments and then proceed to sell or trade | | | | early years of your loan. |
| in their motorcycle after a couple of years. The | | | | 1. Try to avoid zero down payment motorcycle |
| longer the term of your loan the higher your | | | | loans, especially if they extend for more than 36 |
| vulnerability is to owing more on your motorcycle | | | | months. |
| loan than your bike is worth if you choose to sell or | | | | 2. Find a lender that uses a simple interest calculation |
| trade it in. This is especially true if you get a zero | | | | for your loan. Avoid lenders that use pre-computed - |
| down payment motorcycle loan, 72 month | | | | rule of 78 interest calculations. |
| motorcycle loan or an 84 month motorcycle loan. | | | | 3. Try to avoid motorcycle loans that extend past 36 |
| In addition to the term on your motorcycle loan or | | | | months especially if you are purchasing a motorcycle |
| financing, you should watch the type of interest | | | | brand that is going to depreciate quickly. |
| calculation that is used by your motorcycle lender. | | | | 4. Always try to make extra payments on your loan |
| There are primarily two types of interest calculation | | | | towards the principal of your loan when extra money |
| used by motorcycle lenders: pre-computed (combined | | | | is available. |
| with rule of 78) and simple interest. | | | | 5. Opt for an installment motorcycle loan before a |
| A pre-computed interest calculation combined with | | | | credit card loan. Installment loans typically provide |
| Rule of 78 is by far the worst for motorcycle buyers. | | | | better terms and conditions for motorcycle buyers. |
| The reason for this is that in the first 24 months of | | | | 6. Look for online motorcycle loans to ensure you |
| the loan most of the monthly payment goes towards | | | | get the most competitive interest rates available. |
| paying off interest and very little of the monthly | | | | Copyright (c) 2006, by Jay Fran This article may be |
| payment goes to paying down the value of the | | | | freely distributed as long as the copyright, author's |
| motorcycle. Therefore, on a 60 month loan with a | | | | information and the below active live link is published |
| zero down payment a motorcycle buyer can easily | | | | with the article. |
| find themselves owing more for the loan than the | | | | |