I found a 2005 yamaha r6 for 6,000 bucks. clean title, 8k miles. to me, i thought that was a great deal. so i go to my credit union (octfcu) to apply for a used motorcycle loan. i was approved but their terms are what is holding me back from purchasing....


basically, they will loan me 80% of the price of the bike OR the wholesale value of the bike WHICHEVER IS LESS.

so i check out on kbb a 2005 yamaha r6' trade in value...4,500 bucks!

what sucks is that ive had about four loans through this credit union in the past. they've all been auto loans, which they fund 100% of the selling price and the kbb value is just a basic private party value...NOT a wholesale value.

they said there is no way around it. any one else have this problem when getting a bike loan through their credit union?

 

Kelley Blue Book:
Suggested Retail Value
$6535

Trade-In Value (Good Condition)
$4515


why would they use trade-in value? trade in is if you trade in the bike to help buy a new one. you're buying from someone else and never find a good conditions 05 r6 for 4500. Your bank is retarded. tell them they're using the wrong kelley blue book value. Even bring in the print out. If they refuse, say ok then I'm going somewhere else for all my future loans and telling all my friends/family never to deal with you

 

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by EngineNoO9 &raquo;</TD></TR><TR><TD CLASS="quote">why would they use trade-in value? trade in is if you trade in the bike to help buy a new one. you're buying from someone else and never find a good conditions 05 r6 for 4500. </TD></TR></TABLE>

thats exactly what i told them and some douche bag was trying to tell ME how a 2005 r6's value is worth 4500 dollars to them. i told them that ive never seen a 2005 r6 go for as low as 4500 and they are basically making it impossible for me to finance a used bike through them.

 

it's probably because most bikes, especially sport bikes, end up wrecked very soon. Giving a person 6000 dollars for a bike they will potentially wreck before they finish paying it is less scary than giving them 4000.

 

well that's true but it's not like sport bikes are new and that most people don't take out loans on them... I'd go in with the two pages printed out and just be like look. I want to work with you guys but what you're trying to tell me is absurd. No company uses trade in value for cars or bikes. Either use the retail value or I'll go somewhere else and never come back.

 

remember, youre gonna be paying full coverae on the bike too if the bank has a lein on your bike

 

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by slvrblckrdRC51 &raquo;</TD></TR><TR><TD CLASS="quote">it's probably because most bikes, especially sport bikes, end up wrecked very soon. Giving a person 6000 dollars for a bike they will potentially wreck before they finish paying it is less scary than giving them 4000.</TD></TR></TABLE>

that doesnt make any sense because the person's insurance will pay off the loan...so they dont lose anything...

 

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by crxgator &raquo;</TD></TR><TR><TD CLASS="quote">

that doesnt make any sense because the person's insurance will pay off the loan...so they dont lose anything... </TD></TR></TABLE>

In theory. Maybe. Insurance looks for any way not to pay, it's part of how that business works.

Also, don't bother trying to talk a Credit Union representative into going around the regulation - he/she can't, anyways, and you're not going to be able to get the rule changed.

 

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by ASteele2 &raquo;</TD></TR><TR><TD CLASS="quote">

In theory. Maybe. Insurance looks for any way not to pay, it's part of how that business works.

Also, don't bother trying to talk a Credit Union representative into going around the regulation - he/she can't, anyways, and you're not going to be able to get the rule changed.</TD></TR></TABLE>

if you have a loan, you have to have collision that way if anything happens to the bike or car the finanical institution will get paid...often times the FI makes you get Gap insurance in case the value of the bike/car is lower than the loan amount after a certain time.

 

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by ASteele2 &raquo;</TD></TR><TR><TD CLASS="quote">In theory. Maybe. Insurance looks for any way not to pay, it's part of how that business works.

Also, don't bother trying to talk a Credit Union representative into going around the regulation - he/she can't, anyways, and you're not going to be able to get the rule changed.</TD></TR></TABLE>

insurance has nothing to do with it. this is the bank and the bank alone. All that's happened is the guy is using the wrong kbb value. talk to someone else cause noone in their right mind uses trade in value to determine the retail value of something.

 

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by tanner kayne &raquo;</TD></TR><TR><TD CLASS="quote">I found a 2005 yamaha r6 for 6,000 bucks. clean title, 8k miles. to me, i thought that was a great deal. so i go to my credit union (octfcu) to apply for a used motorcycle loan. i was approved but their terms are what is holding me back from purchasing....


basically, they will loan me 80% of the price of the bike OR the wholesale value of the bike WHICHEVER IS LESS.

so i check out on kbb a 2005 yamaha r6' trade in value...4,500 bucks!

what sucks is that ive had about four loans through this credit union in the past. they've all been auto loans, which they fund 100% of the selling price and the kbb value is just a basic private party value...NOT a wholesale value.

they said there is no way around it. any one else have this problem when getting a bike loan through their credit union? </TD></TR></TABLE>

Is this a red r6 from someone in buena park, by chance?

 

Go to another Credit Union.

Also, banks and CU's use NADA, not KBB. In fact, nobody uses KBB anymore.

 

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by EngineNoO9 &raquo;</TD></TR><TR><TD CLASS="quote">

insurance has nothing to do with it. this is the bank and the bank alone. All that's happened is the guy is using the wrong kbb value. talk to someone else cause noone in their right mind uses trade in value to determine the retail value of something.</TD></TR></TABLE>
I know - I'm responding to the person who brought up the insurance theorem.

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by crxgator &raquo;</TD></TR><TR><TD CLASS="quote">

if you have a loan, you have to have collision that way if anything happens to the bike or car the finanical institution will get paid...often times the FI makes you get Gap insurance in case the value of the bike/car is lower than the loan amount after a certain time.</TD></TR></TABLE>


I work for the second largest credit union in the country, you don't need to tell me how it works. That doesn't change the fact that any given insurance company makes an effort to look for ways to not pay out.

 

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by Nims &raquo;</TD></TR><TR><TD CLASS="quote">

Is this a red r6 from someone in buena park, by chance?</TD></TR></TABLE>

im not sure of the exact city, but yes 714 area.


---well i sent my credit union a long letter of my problem with their terms. that was last night and i still have no received a response via phone or email. my other option is a personal loan, which i was approved for. but obviously the interest would be higher.

 

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by ASteele2 &raquo;</TD></TR><TR><TD CLASS="quote">I work for the second largest credit union in the country, you don't need to tell me how it works. That doesn't change the fact that any given insurance company makes an effort to look for ways to not pay out.</TD></TR></TABLE>

there's no difference from working in the largest credit union or the smallest in the US, no need to throw that little fact in there to try and make your opinion look better...

plus CU and insurance companies are different, are you in insurance as well to back up that statement?

How can they not pay if you got into an accident? I can see if you were DWI/DUI, but not in a normal accident.

 

the problem is the type of loan, auto loans are in a different category and motorcycle loans are considered personal loans with decreased security for the lender when compared to auto loans. That's why interest rates are almost always higher for motorcycle loans and harder to get approved.

 

That's not even remotely true. There's a reason that my CU has acquired several hundred smaller entities [For reference: the NCUA won't let a credit union shut it's doors and leave it's members in the cold, it forces mergers with larger, established CU's]. Small credit unions typically play house-of-cards games with their products, and tend to lose. That kind of practice reflects itself in the education of their employees, and the policy decisions that they tend to make. As an employee of a well established institution I've been able to take a unique learning approach to certain products and services - like the ever popular loan.

Anyways, you're right, that doesn't make me an insurance agent... it's not like you need to be one to understand the business model, though. The nature of an insurance company, any insurance company, is to take in more funds in liabilities (products, such as policies) than they pay out. If Zero Insurance, for example, were to pay out on every claim they processed they'd quickly go broke. The most common thing you'll hear about is insurance agencies arguing over fault - in other words, who will have to pay. If fault isn't an issue, you'll need to pay attention to the dollar amount of the coverage you selected - if you only selected $25,000 liability coverage don't expect Zero Insurance to pay out any more than that... even if your vehicle is worth $40,000 and you owe the bank $37,000.

*edit* GAP isn't an industry standard requirement... in my experience it's more often than not simply an option.

Liability policies aren't just blanket catch-alls. If you make a mistake and drive yourself off the road you can't expect your "full coverage" to necessarily cover it. It didn't happen to me, thank goodness, but I have an anecdotal story as an example: A friend of mine (yep, here we go, friend of guy you're talking to on the intArwebber) was driving his on-loan, fully covered, Honda Accord home from work in PA. He saw a deer and swerved to avoid it - he did avoid the deer, but subsequently lost control of the vehicle, rolled, and landed upside down in a ditch. A loophole, as it were, in his policy meant that his insurance company didn't pay him a dime. "If you hit the deer we'd be able to help you", he was told, but because he just drove off the drove he got nothing - he was stuck making payments on a car he couldn't drive. It may be a far fetched occurance, and not something everybody will have to worry about, but it's something that a lending institution does have to consider - insurance is by no means a guarantee.

That kind of brings us all back... it does make a significant difference to the lending instituion how much money they'll lend out for a given purchase. Criteria are traditionally very tight for motorcycle purchases for several reasons - one, listed above, is the high "totaled" rate. We've established that the lending agency won't be guaranteed an insurance payoff, and if the bike's totaled, there's no asset involved - the best policy would be to minimize the loss. Moreover, folks that purchase sportbikes on loan tend to have poor, or little to no credit (not in all circumstances) and the liklihood of a default is higher... not that that's necessarily 100% applicable to the insurance discussion, but it's a relevant factor when deciding loan line amount, and rate.

Blah blah blah. I came off rude. I didn't mean to twist any panties. It's not unsurprising, though, that the institution used trade in value. If the CU has to repo the bike they aren't going to put up signs for a private party sale, or put it on a dealer lot. They'll usually go to auctions, repo sales, and other low-dollar, wholesale market type agencies, to get rid of the asset quickly, as opposed to just sitting on it waiting for something good to come along.

 

update on the situation:

well i FINALLY got an email from someone at the credit union about my email i sent to them about how im very frustrated, confused on why their motorcycle loans are virtually impossible to finance a bike through them. heres what i got DAYS later


"Dear Tanner ,

I am writing in response to your motorcycle question. The representative was correct in stating that the Credit Union finances the KBB "trade-in" value only. We don't expect our Members to find a motorcycle for this amount, but instead we require that a Member place a down payment. Our guidelines are as follows:

"The maximum loan amount for a used motorcycle is: 80% of the trade-in value as shown in the Kelley Blue Book (KBB) Used Motorcycle Guide, or 80% of the cash selling price, whichever is less; up to $25,000. Tax and license may not be financed."

I hope this answers your question."


great. thanks for that half assed email i could have read on their website.

if the credit union doesnt expect riders to find a bike this cheap, then why only fund 80% of a trade in value? what im trying to say is that their 80% of the trade in value...that doesnt sound like a good financing plan to me. it would turn out that i would probably have to shell out 50% of the buyers asking price. the portion of the email in bold makes my eyebrows slouch. 20% of a <U>trade in</U> value is NOT a downpayment to me. its much more. absurd!!

 

Do you know how to read, dude?

There are some pretty clear explanations as to

a) Why financing a motorcycle is a downright bad idea
and
b) Why it's a big risk for a lending institution, and thus not as much of a premier product as, for example, auto loans, or as serviceable.

You also misread the email. They don't expect you to cover 20% of the trade in value. They expect you to cover the difference between the purchase price, of whatever you find, and 80% of the trade in value.

 

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by ASteele2 &raquo;</TD></TR><TR><TD CLASS="quote">Do you know how to read, dude?

There are some pretty clear explanations as to

a) Why financing a motorcycle is a downright bad idea
and
b) Why it's a big risk for a lending institution, and thus not as much of a premier product as, for example, auto loans, or as serviceable.

You also misread the email. They don't expect you to cover 20% of the trade in value. They expect you to cover the difference between the purchase price, of whatever you find, and 80% of the trade in value. </TD></TR></TABLE>


there's no need for insults. i can obviously read. im here for help. i dont understand the used motorcycle loan plan that they have. it seems that everyone else disagrees with the credit union's terms and you are the only one that is basically saying im stupid because i cant understand what they are telling me. i understand what they are telling me. what im trying to say is that why dont they have a better plan for purchasing a bike. i understand that their setup is basically to prevent financing bikes to their customers because they are cautious of accidents and losing money in the process. im sure some people will say "so why dont you just save up and buy a bike with cash" well...to be honest...im an american, and like every other american, when i want something i want it now. i have 1,00 bucks cash im willing to spend on a down payment. i decided that would be enough for a down payment on an 05 r6 for 6,000 bucks (which i think is lower than what they usually go for from private parties). but when i realized they were only going to fund me 80% of the trade in value...which comes out to about 3600 dollars, that doesnt work. i dont want this to turn into a bashing thread. it sounds like you have a lot of experience with loans.

you say financing a bike is a terrible idea? come on man...lets be realistic. generally speaking, everyone finances a bike. unless you're already through school and bringing in a hefty income, in that case you can pay for a bike with cash. im still in school, in my early 20's and im looking to have fun before i get too old.

 

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by tanner kayne &raquo;</TD></TR><TR><TD CLASS="quote"> it seems that everyone else disagrees with the credit union's terms and you are the only one that is basically saying im stupid because i cant understand what they are telling me. </TD></TR></TABLE>

And he is the only one that has posted in this thread that works at a credit union.

Coincidence?

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by tanner kayne &raquo;</TD></TR><TR><TD CLASS="quote">I understand what they are telling me. what im trying to say is that why dont they have a better plan for purchasing a bike.</TD></TR></TABLE>

He alread told you that. The credit union's terms are what they are... its a take it or leave it situation, its not a negotiable situation.

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by tanner kayne &raquo;</TD></TR><TR><TD CLASS="quote">everyone finances a bike. unless you're already through school and bringing in a hefty income</TD></TR></TABLE>

You dont need a hefty income to save a few grand.

 

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by .RJ &raquo;</TD></TR><TR><TD CLASS="quote">You dont need a hefty income to save a few grand.</TD></TR></TABLE>

then why are you "completely broke"?

i made this thread because i wanted to see if anyone had the same issue i was going through with my credit union. its obvious im not going to be able to change their mind. they have their set terms for a reason. i dont agree with them. my credit score proves im financially stable to make a punctual payment for the next 24 months. but oh well


i have decided to take two grand in cash, and take out a personal loan for 1900 bucks and by an '02 clean title r6 for 3900.

 

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by tanner kayne &raquo;</TD></TR><TR><TD CLASS="quote">

then why are you "completely broke"? </TD></TR></TABLE>

Because I didnt take out any loans for my toys.