Financing a specialty vehicle.

Anonymous · ‎11-24-2008

Im trying to get a loan for a specialty motorcycle. The most lenders want to give out for motorcycles loan is 30K. That happens to be the amount Im looking to finance.

My Eq score is 678. Im 20 years only and have 7k left on a car loan.

What variables would improve my score? What lenders are likely to give me a loan? Is my age hindering my chances?

Anonymous · ‎11-24-2008

Age itself can not directly be used as a reason, but age of credit history is different.

What is the income?

How much is your other car loan's monthly payment?

Any lates on the car loan or credit cards?

Any other credit or loan payments?

30K for a sepcialty vehicle motorcycle is a failry high risk auto product. Although typically 678 is a fairly decent score, I would not be surprised to see them requiring a score in the low to mid 700's for this and wanting a decent percent down 10-20%. Like in alot of cases, other factors will mitigate the 678, but with 1 car payment already and fairly young account ages, credit/job history this might be tricky.

Good luck with it all.

Anonymous · ‎11-24-2008

What is the income? 45k

How much is your other car loan's monthly payment? $200

Any lates on the car loan or credit cards? 2.5 year credit history, never a late payment.

Any other credit or loan payments? I have an AMEX Business card, Never late on that either.

Anonymous · ‎11-24-2008

Assuming that you have no more debt and have no plans to carry any anytime soon (i.e house), I guess the finances might work. But, any specialty vehicle loan would probably be tough to get.

One thing, and not to preach down at all as I currently have too much debt in car payments myself.... But, 37K in car debt on 45K per year in income is seriously high. I am on similiar terms, but I am married and that does nto count my wife's salary which is more than mine (we have 2 kids though...) My point being is to think seriously about where you want to be int he next 5 years and make sure that being saddled with 2 car payments that will total probably 800 pre month or so by the time you are said and done (along with added motorcycle insurance) is not going to cause problems down the road. If I really wanted that motorcycle, I would personally work my ass off to get the other car paid off prior to doing so. To each their own but right now you seem to have pretty good credit for 20 years old and a decent head so make sure the gratification is worth it. Look at it this way. If you really want it, make it a reward to yourself for say apying off the other car in 6 months. The 600 per month (and that is about what 30K will run you) along with your current car payment and a few extra dollars thrown in will do just that. then if at the end of 6 months you have no problem meeting this plan, then you know not only can you afford the motorcycle, but you will have proven the ability to pay for it, raised your score some more (hopefully helping the approval for the SV loan), and lowered your monthly bills.

Anyways, just my advice. I jumped into way too many things when I was younger because I could, not because I should have.

Anonymous · ‎11-25-2008

The reason i am purchasing the vehicle is so i can rent it out to enthusiasts during the summer. Win / Win.

Hopefully pay off the majority of it before the year is over.

Thanks for the advice.

Watchmann · ‎11-25-2008

@Anonymous wrote:
The reason i am purchasing the vehicle is so i can rent it out to enthusiasts during the summer. Win / Win.
Hopefully pay off the majority of it before the year is over.

Thanks for the advice.

Be very, very careful. If you are going to rent this vehicle out you will have to have MAJOR levels of liability insurance. Renting out motorcycles is a tricky business. If your creditor knew this they would almost certainly turn you down in your circumstances. The risk of a total loss is too great. Good luck.

Anonymous · ‎11-25-2008

Renting this our for commerical use will make youliable should naything happen to it or to anyone else. If that is what you really want to do, then you should set up an actual business, put together a business plan, and then seek business financing/insurance, etc.

If the vehicle is rented out and the person gets in an accident, not only are you liable for that accident, but unless you are set up as a rental business with proper type insurance, your insurance will not cover any incidents that would occur as that goes beyond the scope of anything your insurance covers. So, you could be liable for damages as well as liability. On top of that, if the lender finds out that it is a commerical product under a consumer loan, they may close the account and demand payment in full.

Anonymous · ‎12-02-2008

Well the motorcycle is a trike. So the chances of damages are equivalent to a car. Also the person renting the car would have to have their own verifiable full collision and comprehensive coverage.

Anonymous · ‎12-02-2008

Insurance follows the car.....or in your case the motorcycle.

Renting it out to anyone makes you a commercial business and you would need $1 million combined single limits of liability.

Your insurance would respond first and theirs second if the amount is in excess of your limits.

I would NOT do this at all.

Mickie is spot on with what "renting" this out could do to you....and since you would be "renting" this out to people who are probably inexperienced with this type of motorcycle the likelihood of an accident is incredible.

Message Edited by 1111mel on 12-02-2008 03:02 PM

Anonymous · ‎12-05-2008

The type of vehicle has no difference on how they would look at it if there was am accident. If you are using it for business purposes, then the vehicle needs to be registered and insured as commercial and the entity that owns it has to be insured against lawsuits and claims.

As proof to this (and this is alot less clear than you case where you are actually operating the vehicle as a business)

If you get a part time job delivering pizza's in your car 1 night per week to make some extra money, you have to get commercial insurance... If you were to get in a a wreck, the owner of the car is liable for the accident..Period. They could come after the Pizza place (and usually do because the store will usually settle quick rather than deal with it), but actual legal liability is on the drive/owner of the vehicle unless you can prove negligence by the employer. Now the problem is that you normal insurance policies ALL have non business use clauses in them. So, your insurance will drop your coverage and deny the claim. Even if they don't find out and they do pay the claim, if they ever find out the can sue you for the money and damages. On top of that, if the vehicle is financed, they finance company often require stipulations that it is not for business use. They do not give the same rateas and terms for commerical loans as residential. They can then close the loan and demand payment-in-full. All this over a 1 night a week job delivering pizza's in your car.

Now take that risk and liability and multiply it 10x if you are talking about buying cars and renting them out for fun without proper business planning and coverages.