Picking Out A Motorbike (Part One)

We don’t just deal with car loans here at Fincar. We also process plenty of applications for motorbikes as well. Whether you’re getting two wheels for business or for pleasure, a motorbike has plenty to offer in the way of fun and for fuel-efficiency. But what do you need to look out for if you’re buying your first motorbike?

The first thing you have to make sure that you have before you apply for a motorbike loan is a motorbike licence  duh! You’re going to look pretty silly if you go down to the dealers, loan all approved and ready to go, only to find out that you can’t drive the thing home. Alert readers might have spotted the Catch-22 situation here: you need a motorbike to pass the practical licence test but you can’t ride the bike out of the dealer’s yard without a licence.No worries.You can sit a theoretical test and get a learner’s permit, as long as you’re over the right age (which, presumably, you are if you are considering taking out a loan and reading this  although some younger readers and potential riders might think about getting loans from the First National Bank Of Mum And Dad).The age does vary from state to state you have to be 16 to get your learner’s permit in South Australia but you have to be 17 to get the same bit of paper in Western Australia  check the regulations for where you live.Don’t forget to attach your L-plate before you ride away, and if you’ve never ridden before, get someone to show you how to ride (another duh! statement).Also don’t forget to include the price of your helmet and other safety gear when you apply for that loan.

Your licence will determine the sort of bike you have. A person holding a learner’s permit (and those who’ve been riding for less than 12 months) can only ride motorbikes with under 250cc engine capacity but there are a few exceptions, as some motorbikes are pocket rockets that can twist a huge amount of power out of a small engine, and these are on the No Way list for those with an R-Date licence (also known as an R-E licence).Later on, you can get the bigger bike with 250+ cc. Often, we see people applying for motorbike loans when the time comes for the big bike, as these are often more expensive (it’s easy to pick up second-hand <250cc bikes at a reasonable price  people who have bought the new big bike often sell the old one, or else they try to sell the small bike so they can use the money as a deposit on the new one).

Mopeds are a different kettle of fish altogether. Mopeds have an engine capacity of under 50cc and can’t work up any speed over 60 km/h. Some mopeds can best be described as a cross between a regular pushbike and a motorbike. They’re not as common as regular motorbikes, and we hardly see anyone coming to us so they can take out a loan for a moped!

But what do you choose when you pick the big one? Are all bikes created equal or are there different sorts for different purposes, similar to what happens with cars. And do you have to go to a larger bike at all ? This is a bit more complex and will take another post to address properly.

Penny-Pinching Petrol Tips

The golden rule when it comes to taking out a car loan, no matter how much you shop around (or get us to shop around) is that the bigger a deposit you can scrape together and the quicker you can pay the loan off, the less interest you’ll pay and the less you’ll have to pay in total. Now, as every frugal person knows  and that includes a number of self-made millionaires  it’s the little things that count and if you can cut costs back, even if only by a little bit, you’ll end up saving a lot in the long run. To quote an old proverb Many a little makes a mickle, where mickle is an old dialect word meaning lot.

Petrol (or whatever powers your car) is one place that you can cut down on your costs if you’re canny. While you’re in the market for a new car and a car loan, take some time to check out the fuel efficiency (either in miles per gallon or in litres per 100 km) of the vehicle you’re about to purchase. Get an efficient vehicle after owning and driving a thirstier model and you’ll be amazed at how your petrol bill goes down. But no matter what you ultimately end up choosing  and there are times when you will need a big, powerful vehicle that can tow stuff rather than a little city hatchback  how you drive it also makes a difference.

The following tips are proven to cut down on your petrol costs.

1 Drive less aggressively. If you keep your speed to the legal limit and don’t alternate between flooring it and slamming on the brakes, you will use less fuel. And, as an added bonus, you’ll save yourself a few costs when it comes to repairs and maintenance AND you’ll be safer as you drive.This fact’s been proven in many studies for vehicles big and small.

2 Take off the roof rack. If you can take it off some of the time, do so. Anything that increased the wind resistance of your vehicle makes it less aerodynamic and less fuel-efficient. A bloke I know who does gardening professionally managed to reduce his petrol bill by 20% simply by lowering the height of his work trailer so that it didn’t stick up over the top of his work ute.

3 Select the right gear for the job. Trucks these days have a green band in their rev counter that lets the driver know when the engine is sitting at its most fuel-efficient. Not the place where it reaches maximum power  the place where it’s most efficient. It’s a pity that cars don’t have this, although some are starting to in the push for more eco-friendly cars. However, all of us can learn by using our ears when our car engine is working too hard or slowing down and heading towards stall speed.

4 Combine trips. Instead of taking one trip to get the kids to sports, then back home, then another trip to the shops and then back home again and then another trip to pick the kids back up again (and so on), plan ahead and combine trips.

5 Look at alternatives. This doesn’t always mean public transport, especially if you’ve got a family to transport. However, for shorter journeys (a couple of kilometres or less), take a bike or walk, as these only burn calories and you can save on gym membership while you’re at it.

More Car Dealer Ads Decoded

In our last post, we had a look at some of the headlines that hit you in the face when you have a look at a car ad  and some of the fine print that usually turns up at the bottom of the page. Most of these headlines relate to car finance and the various conditions of the loan, but a few don’t.Here’s another selection, again taken more or less at random from the automotive section of an old newspaper with identifying information about makes, models and dealers removed to protect the innocent and the guilty.

  • Brand new [Make & Model] from $XXXXXX. Notice that little from.This means that the price could be more than this. In fact, it probably will be more than this if you want anything more than the basic bog-standard variant of this new car.
  • Get $XXX worth of accessories free.Sounds like an attractive deal, but the chances are that these accessories will include rather basic things like soft cloths for cleaning the windscreen, a keyring with the brand name (or the name of the dealer) and a few other little bits and pieces like coffee cups, cleaning products, mats and possibly seat covers if you’re lucky. A nice deal, but don’t let this sway you away from a lower price from another dealer  these little dinky giveaways probably aren’t worth it.
  • Now only… Like all ads of this type, there’s a chance that the full price isn’t really the full price and you’re being offered a discount just to make you think that you’re saving money.Shop around and look at what other dealers offer for similar vehicles and you’ll get an idea about whether you are actually getting a discount or not.
  • The new [make and model]  new look and new features. This means that the manufacturers have upgraded the vehicle in question. The fine print usually clarifies what the changes are. It’s up to you as to whether you like the new features or whether you want to stick with the older type that has just been superseded  which might be a good idea if you’re on a tight budget and the new features are things like bigger wheels or a different shape for the headlights. But new models usually have a few more tweaks than that!
  • This month only! or its close cousin This week only! This is a very common advertising technique, making you think that you’ll miss out on the deal of a lifetime if you don’t sign on the dotted line now. It is a gimmick, and there will be another get it now before it’s too late deal in the yard next week or next month. Never feel rushed or pressured into making a decision about a vehicle  it’s your money (OK, you’ve borrowed most of it but you will have to pay it back) and your car.
  • No deposit.This means you don’t need a deposit to get the car but you will probably be stung with higher interest charges or higher weekly/monthly repayments. Shop around for loans in this case (or get us to do it for you) to find something easier to manage unless you’re in urgent need of a set of wheels (see above).

Managing The Budget Over Christmas

Christmas is a-coming, and it’s one of those things that you have to factor in when you’re working with a budget… and you should be working with a budget if you are considering taking out a loan for a car, bike or boat (yes, even if you are buying said car, boat or bike as a Christmas present!).

Often, when people first calculate a budget to see what sort of weekly payments can be managed for your loan repayment, they can overlook events like Christmas and birthdays, which do require a little extra expenditure. And then that time of year comes around and the pressure can start coming on. It can be tempting to overspend and possibly max out your credit cards in order to have the perfect Christmas.

However, if you cut through the hype and are smart, then you can avoid blowing your budget over this time of year and facing the choice between defaulting on a loan repayment  with all the nasty hassle that comes with this  or eating baked beans for a fortnight. (If it gets to that level, choose the baked beans. They’re good for you as well as being ultra-cheap, and it’s easier to repair the social damage caused by blowing off than the credit damage caused by blowing your credit).

First of all, remember that Christmas doesn’t have to be perfect as defined by advertisers and movies. You don’t need a huge turkey or ham for Christmas dinner, plus all the heavy food of a Northern Hemisphere Christmas. In Australia, we’re lucky enough to be able to have Christmas in the veggie growing season, so make the most of cheap seasonal veggies or even home grown veggies and built your Christmas dinner around that, with the meat being a sideshow.

And presents don’t have to be the biggest, best, flashest and most fashionable. It’s a clich, but it really is the thought that counts. Try home-made treats and gifts if you’re good with your hands (sweets, jam, biscuits, cake, photo frames, etc…) or vouchers offering your services (washing cars, mowing lawns, babysitting, weeding, cleaning) that can be redeemed throughout the year. Or set a maximum limit and see what you can find for under a certain price  it’s amazing what you can find if you use your imagination.

Other tips to help you fit Christmas into your budget are:

  • Join a Christmas hamper scheme or voucher scheme through your local supermarket  this does trim down the food budget.
  • Buy presents bit by bit through the year rather than in one big hit. This spreads the cost out, allowing you to fit present shopping around your repayments. October and November can be good times to start. (Oops  bit late for that one now!)
  • Buy presents for families as a group rather than individuals. This is especially good if you have masses of relatives.
  • Make your own Christmas cards  after all, you can get enough pictures of Christmas-related stuff on the catalogues that pour through the letterbox to provide plenty of collage material.
  • Make a pact with the members of your family that the presents will be bought in the New Year/Boxing Day sales when all the excess stock in shops gets sold off cheap. Don’t go mad, though  again, set a maximum limit and stick to it. Use cash and leave the credit card at home if you’re likely to give into temptation.

How To Avoid Shylock

Shylock, for those of you who aren’t familiar with Shakespeare’s play The Merchant of Venice, was a moneylender who charges one of the main characters (Antonio, the merchant of the title) in the drama one of the most outrageous penalties for defaulting on a loan: the terms of the loan which was voluntarily signed and agreed to by Antonio  allowed Shylock to cut a pound of flesh off Antonio… without anaesthetics, which hadn’t been invented when Shakespeare was writing, unless you count very strong alcohol or opium. And you can guess what happens: Antonio defaults on the loan when he gets the news that one of his trading ships has been wrecked at sea, and Shylock hauls him into court with a knife ready to do the business, and it takes some very cunning legal work by Portia, the heroine of the play who disguises herself as a man so she can act as a lawyer, to get Antonio off the hook.

Shylock was the Renaissance version of a loan-shark: someone who charges a very high rate of interest so people with bad credit ratings can take out a loan. Loan sharks  although you won’t hear them advertising themselves this way  are now more common and more acceptable to society than they used to be (only just). In Shakespeare’s day and before that, the practice of charging very high interest rates was known as usury and it was considered to be among the most atrocious of moral crimes. Dante, who wrote before Shakespeare, in his classic Inferno, put usurers (we’d call them loan sharks) in the seventh circle of Hell at the same moral level as murderers and perverts.

And if you’ve ever talked to anyone who has taken out a loan with a loan shark, you’ll understand why society in days gone by cast them as villains. Some people who have failed to read the fine print and/or have felt so desperate that they’ve taken out a loan from one of these unscrupulous lenders would agree completely  and are likely to consider hacking off half a kilo of muscle to be a better situation than watching their family suffer in an attempt to pay the loan off.

You should always be suspicious about people or companies who offer loans on very easy terms. It is highly likely that there will be exorbitant hidden charges and/or penalties. These people are often considered by people who haven’t got a stellar credit history. How can you avoid Shylocks but still get the money you need to buy a set of wheels (so you can get to your job so you can earn the money to pay off the loan and still have something left over to live on)? Is there a way?

The first thing to do is to look at your credit history carefully. Sometimes, the printouts can be wrong or out of date. A debt may be in dispute or you may have already paid it off, and this isn’t shown on the bit of paper. If you can sort this out and clarify what’s going on, then you may be able to clear your name on the credit front.

The next thing you can try doing if you do have outstanding debts or unpaid bills that are damaging your credit rating is to do what you can to pay them off. This may mean that you have to trim your lifestyle back a bit  cut that credit card up if you find that you can’t help yourself running up big bills with it!

If the problem is well and truly in the past  perhaps the bad rating is a legacy of being young and stupid many years ago  then having the paperwork, such as bank statements and budgets can be used to show lenders that you have learned how to manage your money properly and you are unlikely to default on a loan again. Another possibility is to save up and have a large deposit handy, which not only means that you’re borrowing less but also shows the lender that you’re able to save money.

And, most obvious of all, try applying to a different lender. If you’ve always gone to the same lending organisation and they know that you have a tendency to get yourself into problems, then a new lender might be more favourable towards you, especially if you take some of the other steps listed above. Talk to us and we’ll help you find a new lender that suits your situation  and we’ll help you with the fine print so you don’t end up paying a pound of flesh.