How to Finance for Scooters and Mopeds

Mopeds offer some financial benefits over the traditional automobile.

Mopeds offer some financial benefits over the traditional automobile.

Scooters and mopeds provide unique benefits for young couples facing a daily commute or just zipping around town. Scooters are cheaper to insure, fit in smaller parking spaces and cost less to purchase than a traditional car. An even bigger benefit? Mopeds often get better fuel economy than a car, which means lower gasoline costs for your pocketbook. Financing a scooter or moped is remarkably similar to financing an automobile. You must use your credit to secure a loan that is backed by the lien on the moped or scooter title.

Use an auto loan calculator to figure out how much your budget can afford for a scooter or moped. Online calculators automatically determine your monthly payment when you enter the loan amount, term of loan and interest rate.

Ask about dealer financing. Once you pick out the moped or scooter you want, fill out an application with the moped dealer. Most dealer financing offers benefits such as grace periods on your first payment or lowered interest over the life of the loan.

Shop around to other banks. You aren't stuck with offers from the dealer financing agent. Shopping around to your local credit unions and banks might get you a better interest rate or loan terms. Because moped and scooter financing mimics auto financing, all credit inquiries marked as "Auto" are counted as one inquiry toward your credit score during a 30-day period. These individual inquiries all appear on your credit report, but your credit score does not suffer from excessive inquiries as it might in other situations.

Review your offers. Each application that is approved for your scooter loan comes with individual terms including the interest rate, length of the loan, pre-payment penalties and insurance requirements. By going over each of your offers -- instead of picking the first one -- you'll choose the offer that is in your best financial interests.

Notify the creditor you decide to use for a loan. Politely decline all other applications. Sign the paperwork. Using dealer financing minimizes the process of money changing hands. Using a third-party creditor means you need to drop off a check to the dealer before you get the keys to your new moped or scooter.

Tip

  • Offer up a higher down payment or a co-signor if you are denied credit based on your credit score. It increases the chance you'll be offered a loan for your moped or scooter.

Warning

  • Going with longer loan terms decreases your monthly payment but increases the amount of money you pay in interest over the life of the loan.

About the Author

Leigh Thompson began writing in 2007 and specializes in creating content for websites. She has been published online in various capacities. Thompson has an associate degree in information technology from the University of Kansas and is working on a bachelor's degree in business and personal finance.

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