Bike Buyers Monday Tip: Please don’t let the bank put your bike on auction
Bike Buyers is in the business of purchasing motorcycles which then find themselves on the showroom floor of the famous Fire It Up dealership in Fourways, and the number of motorcycles on the Fire It Up floor suggests they are damn good at what they do. Collectively, they have many decades of bike buying experience and will be sharing their knowledge with The Bike Show Website every Monday offering tips, advice, guidance and warnings regarding your bike buying or selling experience. For this week’s tip, we look into how letting the bank send your repossessed bike to auction will ruin your life forever and what to do instead.
Times are tough out there, work is scarce and money even more so. Three years ago, affording your dream bike became a reality, so you went out, got a loan approved and rode home proud and majestically. Three years later and times have become tougher and tougher. Suddenly, the monthly instalments are becoming difficult and you miss a few. Eventually, the bank gets hold of you and says that if you can’t keep up with your payments, they are repossessing the bike.
This is where everything goes wrong – they take the bike and send it off to be auctioned. You may owe R70,000 but the bike was worth R50,000 when they took it. Yet it is worth quite a bit less by the time it goes on auction after bits have been stripped off by scavengers, plus the battery and fuses have been removed and there is a substantial layer of dust adorning its once fine paint job. Also, it might end up in a lot with only two or three bikes, and the decent motorcycle dealers then won’t bother to attend the auction, meaning a few car dealers might see a bargain, bid R20,000 and get it.
Herein lies the problem – you owe the bank R70,000, but the bike just went for R20,000, minus the auctioneer commission, so that means you’re still R52,000 behind. That gets even more after the bank sends lawyers after you for the remaining R50,000 and they add their fees, in which case you now still owe close to R70,000 and you don’t have your bike any more.
Now you are in big trouble, because not only will they be chasing their R70,000, but they will blacklist you – the real kind that the banks look at. Once you are blacklisted, it will be extremely difficult to ever get finance again.
There is a way around this – when the bank wants to repossess the bike, instead of handing it over to them to be auctioned, contact your local reputable dealer and ask them if they don’t want to make an offer for it. You might owe R70,000, but the bike is still worth R50,000, and the dealer often deals with these banks and will be quite capable of making a deal. They will offer the book value of R50,000 for the bike, and then make an arrangement with the bank whereby you pay back an easier R20,000 instead of possibly still being lumped with most of the R70,000.
Bike Buyers has seen many examples of this where bikes are being repossessed and sent to auctions. They have a good steading with the banks through the many deals they do every month, and usually they are able to work out a deal with them that will not entail undervalued auction sales followed by lawyer fees. If times are hard and you can no longer keep up payments, rather speak to someone like Bike Buyers. They could get you out of a life time of trouble.