TIPS: Motorcycle Credit

Motorcycle credit is very popular. Indonesian Motorcycle Industry Association reported sales of two-wheelers in 2010 exceeded 6.5 million units. The amount is up compared to sales in 2009 to reach 5.851 million units. Of the number of units sold, most or nearly 60-70 percent of the purchase process was supported by finance companies (leasing).


Indonesian Consumers Foundation (YLKI) warned consumers to be careful when selecting financial institutions. The institute warned not all companies have the credibility of reliable financing to give credit disbursement.


Instead of getting motorcycle with comfortable instalments, consumers were often trapped by excessively high interest and engagement agreements. That is why YLKI recommends that consumers check out the finance company first.


Before making your choice, you should research several finance companies first. You must check that the finance company of your choice is bona fide and reliable. Also you can find the best deals, especially in terms of price.


Best deals can be made from the online motor credit comparison sites. These clearly show the results between one company to another. Then it is easy to see who offers the best deals.


But not just the ones that seem to be best – look at the plus and minus of each lease. For example, how easy or flexible are the repayments. You can also check the amount of fines if late with your  repayments. See also whether there is an option to pay off in the middle of your loan and so forth.


Note also the extent to which finance companies make it easy to get your motor registration when the debt is completed. Once the mortgage is paid off, then the reg must be delivered to the consumer. There are some cases of unscrupulous leasing of mortgaged registrations.


Then also look at mortgage maturity. Keep payments according to your financial condition or when it’s payday. Do not have your payment date fall before payday. If this happens, get ready for a late hit penalty. Arrange so that your instalments come a day or so after your salary cheque is paid in to your bank account.


No less important is the amount of down payment (deposit). Avoid using a cash advance by way of a loan to pay this, whether it be a collateral or unsecured loan. This only makes the burden of debt liability increase.


Also remember, the consumer is king. So, try to negotiate the price because of the rights of consumers. There is a often a discount scheme. Typically, the program is offered just before Eid or at the end of the year. This is when the consumer rate rises, while at the end of the year, the entire motorcycle manufacturers want to clear their stock before the turn of the year.


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