Quote:
Originally Posted by AwDang
Alex,
I have to disagree with this point. I have a 1.5% loan on my bike. Why on earth would I take savings that are making more than that to rush and pay off this bike?
I’ve bought and sold bikes / car / and houses, all with liens. It’s easy to your due dillegance in the process. As stated, go to his bank, pay them, receive a BOS and paper work. Likely they will get a power of attorney from you and apply for the title in your name. If your getting a loan to buy it then it bacomes a bank to bank transaction. Clean, hands fee, just have to arrange pick up of the machine.
People are to scared because they don’t get educated in the process. The banks won’t let things go south because they have legal responsibilities to fulfill.
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I'm not sure I'm getting my point across clearly. I'm not saying loans = bad. Heck - a loan at close to zero interest *is* likely a reasonable financial decision compared to paying it all in cash. That's not the question. The question is when going to sell that same bike/car 2 years in, with the loan still on it, do you try and sell it with a lien, or pay it off and sell it unencumbered.
Financially, the choice is easy at that point. The seller will make more money, and sell the bike/car much faster and easier with the title in hand. Selling with the lien in place costs the seller money. If the seller doesn't have enough $ to remove the lien at that point in preparation for the sale - they may have stretched themselves awfully thin on the initial purchase.
Going to the bank to get it sorted may be a great way to minimize the risk where possible, but with credit unions, and out of state banks, it may not be possible to take care of the process entirely without putting a significant amount of trust in the seller to go through with everything as expected on time.
I'd also separate the discussion from bike --> car --> house --> yacht --> jet. As one goes further to the right, it becomes less and less likely that a lien/mortgage is ever paid off. The financials of very expensive items are tied directly to the loans that facilitate ownership. It should be different (and simple) for almost all used motorcycles. It should be different for many used cars.