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Paul120

Joined:

Jan 04

Posts: 3

Paul120 says:

Motorcycle Finance Feedback

Hi all,


I'm new to the forums so please be gentle :wacko:

I work for a major Bank and we are thinking of entering the motorcycle finance marketplace. We are keen to understand the requirements of potential customers and would welcome some honest, constructive feedback on your experiences of using motorcycle finance (Black Horse, Close etc).

We would also like to consider any new innovations to finance products rather than the standard Hire Purchase (HP) or Personal Contract Purchase (PCP) offers currently.

Your feedback would be very much welcomed.

Thx,

Paul 


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  • Posted 2 years ago (12 October 2012 13:59)

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obewan

Joined:

Mar 03

Posts: 2908

obewan says:

Paul

Like most folks I want to pay the minimum in finance mark-up.

So I always look at the total cost of a deal, and that is not just the purchase price. Many dealer offers look good when you look at the finance package - but they you realise it is a model about to be replaced or face a major overhaul and thus the "cheap" model will take a hit in terms of depreciation.

Typical APR figures from the likes of Blackhorse are way above what can be obtained via a regular bank loan, if not from the likes of Lloyds, HSBC, then certainly from Tesco, Sainsbury's etc.

 

So any package needs to be competitive, for current models.

What also really gets my, and I dare say others, hackles up are hidden admin charges. When I buy a bike I dont expect to pay £50 at the start and £50 at the end for paperwork. These costs may be negligable but they are bloody annoying and leave a bad taste, and would certainly be part of my considerations when looking at a deal.

If the PCP is to work for getting a new bike every three years is to be meaningful, mileage can't be resticted to 2 - 3K per year. Some of us like to get out an ride. It needs to be a meaningful figure. Likewise the deposit amount needs to be realistic. I would have thought between deposit and payments about 66 - 75% of the On Road price, as the resale value at the end ought to be what 50% of the initial On Road price. giving a 5% ROI (if you factor in NPV) even more.

 

Also look at the many complaints on here about MCE Insurance - that'll show you the sort of customer service issues that really piss customers off. I would suggest most of us are also car drivers so don't treat us like second class citizens, or you risk the monies you might have also got from our car purchases. In fact why not link the two. Think BMW make cars and bikes, Audi recently bought Ducati they see the opportunities for cross selling

[This Reply has been modified by the Author]

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Paul120

Joined:

Jan 04

Posts: 3

Paul120 says:

Motorcycle Finance Feedback

Many thanks for your reply Obewan.


Thanks for the 'heads-up'. I completely agree with you in relation to fees. Many HP agreements have an initial documentation fee as well as the obligatory option to purchase fee at the end. The introduction of a 'no customer fee' loan may be something we can work on.

In relation to PCP, I see no reason why a finance company cannot set more realistic mileage parameters to suit all riders. If the current market offering is restrictive, we'll certainly bear this in mind.

Many Banks & Building Societies are restricting lending to existing customers only and are tending to increase the APR offered on loans below 7.5k (i.e. bike purchase territory). Recent research suggests that a loan below 7.5k would often attract a rate in the region of 15.9% APR.

If this is the case, would a no fee 7.9 - 9.9% APR be attractive to prospective buyers?
 

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beaconsman

Joined:

Sep 09

Posts: 1755

beaconsman says:

finance/money

it's the weekend, finance and figures..nah. leave that till monday!

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AdieR

Joined:

Apr 08

Posts: 3042

AdieR says:

One bit

that would be nice, would be some flexibility to make slight adjustments without incurring a load of fees / penalties.

For example, if you take out a loan based on your current income over (say) 4 years, circumstances change slightly and you find you can pay a bit more each month and repay the loan in 3, I don't really want to be hammered with early repayment charges. Similarly, a repayment "holiday" (or reduced payments over a longer period) during tough times would be useful.

That said, I tend to save up for expensive items anyway and pay cash - it allows room to haggle over price that finance often doesn't.

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Paul120

Joined:

Jan 04

Posts: 3

Paul120 says:

AdieR

Thx for the feedback. Overpayments are now allowed without penalty from most providers.


Payment holidays (not offered by many finance companies) and other flexible perks are good ideas.

As the bike dealer gets commission for selling finance, this could lead to better negotiation over the bike price :wink:

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DrFutura

Joined:

Apr 07

Posts: 462

DrFutura says:

With savings interest

so insultingly low, loan rates even of 7.9% are taking the piss. If the whole country went back to the old Victorian/Working Class philosophy of not buying what you don't have the money for you lot would go out of business. Unfortunately while our Tory masters are raking it in through Wonga.com and the like there is no incentive for anyone to do anything in banking that could be regarded as "fair".

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