Bonneville America Forums Forums Off Topic Discussion Forums Lounge Rip off bike loan or just plain stupid!

I'm wondering how common this occurance is.. My son decided, without asking any advice or guidance, that he was going to get a bike. He went to Ocala Motorsports and before he knew it, was the owner of a 'lightly' used Suzuki GSX-R750. Now, keep in mind that he is 20 years old, in college, and working as a part time sales clerk at a local retail store (ie: he has _no_ credit to speak of and has only been working where he is currently for a little over a month). He wound up getting the bike for what he thought was ~$8,000 (and his college buddies told him what a fantastic deal that was!), financing the majority of that price. Didn't bother to look at the APR on the loan, or any of the fine print. Turns out that it's an astronomical interest rate, and you can't pre-pay against principal or pay off the loan early.. basically, his $8,000 purchase wound up costing him more than $12,000 over the life of the loan (even if he wanted to pay it off early since there is no pre-payment options), but at least they threw in a jacket

I'm wondering how common this situation is.. they obviously saw him coming and he had no idea what he was up against, and I'm wondering just how many people they sucker into similar deals.

Cheers,
Brad

Sounds like a slimey dealer to me. I am going to guess that he went to a Yamzukawada suer store dealer. How long ago did he make his purchase. I know that in a lot of sttes nowadays you have three days to change your mind.

Soren

*On approved Suzuki card purchases. 8.95% APR and low monthly payments plus any late fees effective for 24 months. For purchases up to $10,000, your payment will be $85. For purchases between $10,000.01 and $11,500, your payment will be $95. For purchases between $11,500.01 and $13,000, your payment will be $105. For purchases between $13,00.01 and $15,000, your payments will be $125. Paying only this amount will not pay off the purchase during this period. Thereafter, the Regular Minimum Monthly Payments and Standard Rate, 17.95% APR apply. For Accounts not current, the promotion is canceled, and the Default Rate 21.9% APR and regular Minimum Monthly Payments apply. Minimum Finance Charge $2. Certain rules apply to the allocation of payments and Finance Charges on your promotional purchase if you make more than one purchase on your Suzuki card. Call 1-888-367-4310 or review your cardholder agreement for information. Offer ends 12-31-07. Offer valid on new GSX-R, and Hayabusa models purchased at participating Suzuki dealers in the United States excluding Hawaii. See your local Suzuki dealer for details. Offer subject to change without notice. Better hurry, this one won't last long!

I'm guessing this is the deal he got? It's not the dealership, it's Suzuki. Being in the military I've seen more than a few friends get sucked in by "super deals" which turn out to be more like preditory lending practices. Suzuki is horrible about it.

When I bought my 125 I got it on a credit agreement. I had NO credit rating at the time and the APR was:













28.2%

6 months later I went to the bnk and they said "why are you paying these cowboys?" and instantly gave me an unsecured loan at around 6.5%. The cowboys are the biggest credit supplier in the country for cars/bikes....

Well your son is going to grow up real fast especially working two jobs for the next 4 years...

Three days to reverse in Florida.

Research FL Statues about Usury.

Drive to the stealer and have a chat with him/her. At the least you will put him/her on notice of the sentiment you will be disseminating throughout his/her stealership territory.

Now to answer your question about how common this situation is?

two and one-half words for ya:

Sub-Prime Mortgages

Some lessons in life come with a steep price and others don't cost a thing. Your son bought the deluxe version of this particular life lesson. One of the free lessons I've learned is that most kids below the age of 25 will take whatever life experience advice your give them and will do just the opposite. Eventually, they learn to listen, but not before being bitten a few times first. That's just the way it is.

As one of my high-speed CW3 Apache test pilots told me...
"Good judgment comes from experience - experience comes from bad judgment"

Question -
He CAN'T pay it off early, or is there a penalty for doing so?

I'm thinking the prepayment penalty can't be as bad as paying 4 grand in interest. I would be shopping for another loan if that would fix this.

It is a sad comment on our predatory times. In fact, this kind of pedatory lending seem to be the norm nowadays. Credit card companies are the worst. They practically stalk college kids and entice them to get a card, then send them blank checks in the mail to use for the "holidays", or any thing else they can dream up.
You're outraged (as all us older, wiser friends of yours are) but how does your son feel about it? Has the glow of the new bike worn off yet? (Man, everybody remembers that feeling) I would go back to the dealership with your son and raise ******. Threaten to tell everyone about his practices and demand he take the bike back, with some allowences for the miles your son had put on it. It might cost your son a couple hundred bucks, but it would be worth it. Threat of legal action (even if they are legally within their right) might cause them to reconsider their reputation and future sales in the community. Good luck!

Has to be worth raising a fuss over somehow.

YEP, my son fell into a similer situation a few yrs ago when he bought a jimmy and "DAD.... it was a great deal" he finally got it paid for not long ago after paying about 1 1/2 times the selling price. i think he learned a little something cuz he recently bought a mini van and before he did he talked to mrs. finance director (mrs. Newt) who was a mgr. of a bank for yrs and knows about such things. My daughter (the school teacher) complains about this all the time, WHY dont they teach finance in school??? 10th/11th/12th grades should be all about, THIS IS WHY WE TAUGHT YOU 2+2=4 !!!!!!! BUT NOOOOOOOOOOO they just want to rehash the same crap over again????

Chalk it up as an educational expense.
Pre-payment penalties are illegal in Nevada.

He's no different than the rest of us - we tend to learn from our mistakes. I believe many of us could have or would have made this same move back when the deer in the headlights look came all up on us at the sight of a set of wheels within our reach. When my daughters got to driving ages, their "I want to buy a [cool looking ego based ride, but a sh-- box in disguise]" gave me a touch of anx at first, then I remembered my own early vehicle desires, before we learn things like foreign car parts are often very expensive, and it pays to shop for interest and insurance prices. In our teens and early twenties, the common sense part of the brain sometimes isn't yet connected to the wallet portion of the brain. ;-)



At the tender age of 40 something, all the local banks had me believe that the only way to buy or build a house is with 20% down. Tain't so. A friend steered me to a mortgage broker who taught us that one can get a home loan with much less down, and when barely within the new millennium, he found us a Nixon era killer rate. Because we were financing with less than 20% of skin in the game, we paid a $35 per month PMI charge. At least we were building equity. A few years later, we re-fi'd out of the 5 year construction loan, and by then the house had gained enough value to eliminate the PMI. Once again he found us a great fixed rate at 6.5 Had I listened to the local banks, we would still be renting. The best part - the banks paid the broker for his efforts.

Not all sales are covered under a buyer's remorse law. As a general rule, the purchase must be for future services or have been solicited. If a buyer goes out and makes a purchase, then they are not covered by the law.

Under the Florida buyers remorse laws, if you contract for services to be rendered in the future on a continuing basis, you are entitled to a 3-day cooling-off period. You are also entitled to cancel a contract for future services if you can no longer physically receive the services, or the services are no longer available as originally offered.

Also, if you purchase goods or services during the course of a "home solicitation sale", you have a 3- day right to cancel. A sale is considered a "home solicitation sale" if it takes place in your home, or at a location which is not the main or permanent place of business for the seller, so long as the purchase price is in excess of $25. This includes home sales parties and door-to-door sales of cosmetics, etc

Unfortunatly, this sounds like a tough lesson. It's expensive way to learn why it is necessary to pragmatic when it comes to making buying decisions rather than just jumping into it.

Thanks everyone for the suggestions. Unfortunately, it gets even worse as it seems The purchase was done almost two months ago, so the 3 day remorse period is long since gone. My son was afraid to tell us about the purchase and didn't admit to it until almost a month later (he doesn't live at home, and when I saw the bike the first time, he said it was a friends at the University that he was keeping for him). While I was out of the country in Costa Rica, he admitted to my wife that he had bought it, and showed her the terms and conditions of the loan. She freaked out, and decided it would be better to get a low interest student loan to pay it off, so she called the finance company and got the $12,000+ payoff figure. I have no idea what the exact terms were, if it was a pre-payment penalty, total loan interest, or what.. only that in order to pay off the roughly 1 month old $8,000 loan, it would now cost over $12,000. So that's what she did. To top it off, in order to get the student loan, she had to co-sign on it. It's one of those low interest loans that he doesn't have to start making payments on until after he graduates in two years.. but the interest keeps accruing. I'm guessing that by the time all is said and done, it will cost in the neighborhood of $14,000 for that bike. She dumped good money after bad. And of course, I only found out about all of this _after_ I got back into the country and it was already a done deal.

I guess had I found out about the purchase and terms in the beginning I would have just told my son to stop making payments, let them repo the bike and take the credit history hit. He already has a credit card, so he can build his credit back up slowly, and it would be a constant reminder not to jump in head first without a good long look at exactly what you are getting into. Either that or make such a stink, including legal, that they would have taken the bike back with a small penalty. Guess we will never know now.

My wife says she has 'learned her lesson', as has my son.. we shall see. It's not the first time either one of them has made an impulse decision without first thinking it through, and I doubt it will be the last. It's just a shame that it's such an expensive lesson all around.

Cheers,
Brad

Wow. Train wreck.

OUCH! from bad to worse!

This is a very good educational thread. Unfortunately at the expense of one of our members. Life lessons can really sting.

I believe you should not buy toys on time. Save up and buy it outright. A vehicle is an asset that goes down in value as you pay interest on it. Bad deal.

Brad, now that it's a low-interest student loan, I'm assuming that there is no pre-payment penalty. IF so, can he start paying it off starting right now, and maybe at least save himself some of the interest. That's probably a tall order for a student, but the more he can pay each month now might save him something down the road, not to mention down the road, he'll have that loan payment ON TOP OF any other living expenses while he's trying to get started fresh out of school. Just a thought....

Second thought, slap some Harley badges on it and sell it as a rare racing Harley on E-bay. Like PT Barnum said, there's a sucker every day on E-bay.

Sell it, take the loss and have your son complete the rest of the payoff.

This is a tough one, Brad. I feel for ya. Nothing makes one madder than a rippoff. At the very least I would send Mr. suzuki (crook) a nasty letter to get it off your chest.

Well, just got off the phone with my son. Seems he has come to the conclusion that, after looking over his financial situation, he needs to sell the bike and cut his loses. Doh! Anyway, here is a picture of what is perhaps the most expensive Suziki GSX-R750 out there, and if you know anybody interested, he's selling it for much less than he paid for it



Cheers,
Brad

Can he sell it? They have the title, how will he satisfy the lien?

He'll have to get loan for the difference.

Can he sell it? They have the title, how will he satisfy the lien?

AFAIK, he has the title.. the original loan was paid off with a student loan, and it's an unsecured loan so he didn't need to put the bike up for collateral. What he will wind up with is owing at least $4K or more for being stupid

Cheers,
Brad

This has just been such a sad lesson. He will be better for it in years to come.

If he is 20 he should know better. The dealer is doing what they do best which is to SELL what they have to the unsuspecting walk-ins. That is why the public put vehicle dealers in with lawyers and congrsssmen as complete rogues.