Right.

My lovely girlfriend is buying herself a new (dependable) bike, as her old (Italian) bike is dying a rapid and noisesome death. Now there are two options, as far as I can see. She can either get finance from the dealership, or get a loan from the bank. We've been leaning towards the bank option, as it would mean she can buy it outright and it will be hers, which will be well useful if she decides to sell it in a year. Now the bike she wants (Z750) looks like it's going to cost about 3500-4000 quid. She has just opened up a Graduate Account at Lloyds, as we've both just graduated. I think we can get financing off the Kwak dealership for about 13%, or the bank is offering a 5000 loan for about 9-10%, and then she will "pass on" the extra 1000 debt to me, as I am after a bike too (unrelated story..).

Is there any advantages inherent in getting financing over a bank loan? Because we can't see any!

-eli (on behalf of Joleen)

Hi -- The bank loan is obviously cheaper and gives you more flexibility by way of having funds available to also buy your bike, both bikes will become your property bought this way.

The finance deal is more expensive and is specific to your girlfriends bike, which will belong to the finance co. until all payments are made in full, however buying through finance offers more protection for the consumer.

 

 

So weighing up both options, I would go for the best of both worlds by borrowing the money at cheaper rates from the bank and then actually buying the bikes on credit cards if possible ? either yours or a relatives. This method would give you added consumer protection.

Then repay your credit card by using the bank loan, you will still own the bikes straight away and have the added bonus of the inbuilt protection of using a credit card. 

Thank you for your advice. As far as I can tell you're spot-on on all your points. But what do you mean that a credit card would give added protection?

 

-eli 

You have more consumer rights buying via credit card - if the goods are not as described, for example, you can get a refund via the credit card company.  You can lso get 55 days free credit - make sure you buy the bike(s) just after the c/c statement closes, then pay the debt at the next statement date -a lmost two months time.

Just make sure you pay off the entire balance, so you dont pay credit card interest.

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I am a mortgage broker.
These posts are for information and discussion, and should not be construed as advice.

Hi --- Section 75 of the Consumer Credit Act 1974 gives you the same rights against the credit card company as you have against the dealer, by providing cover if the dealer sold you goods that turned out to be stolen, inferior in quality, of a standard not expected etc.., then if the dealer went out of business or refused to rectify the problem, you would have the right to claim that the card co. rectifed the problem, or refunded the money...... Free extra legal protection at no cost if you use a CC on purchases over £100 up to £30k.

 

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/31/creditcards-31.htm

That makes sense. However, as it turns out she's buying her bike from the Honda motorcycle dealer where she works, so she's pretty much guaranteed they aren't going to rip her off or anything. I'm buying mine off Eblag, however, so can use all the protection I can get. :)

Hi --- Good luck --- At least you have the protection for free even though the chances of needing it are low in your GF's case, however please take extreme car buying yours off ebay, get a HPI check done on the bike to make sure it's not stolen or got a jaded past history, ask the seller all the right questions and don't assume you will have credit card protection if you pay through Paypal.

Once a third party payment handling company is introduced, your legal credit card protection becomes questionable, because you have not paid the seller direct with the credit card.

Sure, that's all sound. But if the guy has all documentation (V5's, MOT papers, etc...) then surely it's sound? And I will be taking a qualified Honda mechanic with me to view, to make sure it's not a lemon...

Hi -- Well your most way there with checking the frame and engine numbers correspond with the numbers on the V5 and past MOT cert's, but there could be outstanding finance on the machine or it could have been a write off put back on the road in order to sell on, with a re-registered frame or engine from the original factory fitted parts, done through DVLA.

That would not be visible to your friend, however a relatively cheap HPI check would uncover these discrepancies.