This might be old news to some, but I thought I would relay a story a riding buddy of mine told me - he's an insurance adjustor for one of the big national firms, and he primarily deals with their powersports/boat/rv customers.

Says about once a month he comes across a situation where a young guy (regularly under 24yo) has bought himself too big/powerful a bike w/ little or no riding experience, and true to the statistics has wadded the bike up in a ball somewhere within the first year.

When he goes to check the bike out (most always totaled due to repair costs), he will find that the owner only had liability on it, and no gap coverage even though the bike is not paid for. He tells the owner what he can pay for, liability/property damage to others, up to the limits of his insurance but not for the bike or his associated losses. That's what full coverage would have taken care of.

Owner usually gets pissy about it, cause he didn't understand what his insurance covered in the first place, or even better is when the owner is young enough to let mom & dad try to fight the battle for him b/c he doesn't understand the situation.

So - the deal that usually turns out is that the owner found out that he could swing the bike note, but the full coverage insurance on that new 600 supersport or literbike was going to 300-500ish a month. full coverage is required for any vehicle that has a lien/loan on it by most states, so apparently the dealers/manufacturers have a "workaround"?

Dealer talks to the guy, works up the sale price, and does the financing through an arm of the manufacturer's credit business, but what they do is roll all of the costs onto a credit card account. Now the dealer gets payment in full from the CC side of the house, but the new owner has picked up say $14K in a creditcard bill, not an auto/vehicle loan.

With the bike paid for, the owner gets title-in-hand, therefore only has to legally carry liability insurance. He/she wrecks the bike, and is left with all the debt, plus a wrecked bike that either is good only as scrap, or has thousands in repair costs required to put it back right.

Again, I'm not really on a soapbox or anything, I don't really care one way or another, but if this is describing some of you, or someone you know, I thought I'd throw it out there for consideration.

 

That happens every day.

 

Sheesh... wish they'd offer me a deal like that at BMW

My only real question is what would the dealer do if the owner defaulted? It's not a vehicle loan and the owner has title in hand with no lien. The dealer would have no right to repo the bike. And if they tried it might cause their credit deal to come to light which several people would frown on.

21 living with mommy and daddy can take a $13k credit hit for 7 years

 

one of my dumba*# friends had this happen to him its sad the dealers only want the money thats why they came up with that credit card finance b.s so they can appeal more to the young kids who are like oh i wont have to carry full coverage i can afford that and are usually in superman mode than the above stated happens

 

Agreed - dealer doesn't want/need the bike back, cause they got paid by the Credit Card owner. Also, I just don't know that they expect the bike to be worth taking back in a lot of situations. At that point, it's like any other credit card debt - you default bad enough and they come after you directly. The CC company doesn't want that blu-ray player you bought @ best buy , they want cash.

I agree that there's maybe a bit of shame toward the manufacturer for employing this practice, esp since it's primarily trying to get around high insurance prices so their dealers can sell bikes easier. Insurance prices are due to the owner's tendencies, plus the fact that sportbikes are fragile when it comes to laydown repair. Manufacturers keep the price up on parts like OEM fairings that are usually destroyed in a laydown, which causes the insurance rates to go up. It's like a dog chasing it's tail.

that's why I bought a 18 year old F2 I guess.