MTF and what anyone with finance needs to know!

[fizbin]

Well as some of you know, I managed to drop and write off my bike a couple of weeks ago! my fault entirely, pilot error what ever you what to call it but basically i fucked up.
So i bought the bike through Mt Eden Motorcycles not without its dramas but happy with the result. I financed the bike through MTF Finance and also took out "Platinum Payment Wavier Insurance" which as i understood it meant that if i wrote the bike off before i had paid it off, and there was an amount that my insurance didn't cover this cover would step in and cover the short fall. I had had this on my previous bike and thought this was a good idea.
Now i paid $779 for this cover not cheap considering that this is in the finance package and i paid 19.25% interest over 36 months for this.
So i wasn't worried about the fact that i had the bike for only a year or so, i had all this cover which meant i should not end up owing anything on the bike right?!?! umm NO!

To explain:
I am comprehensively insured through Lumley Insurance (not the cheapest option but i get a good deal with my wife working there) had no problem with the claim it was accepted with no problem excess paid and money paid to the finance company. I send all the information off to the finance company making sure not to miss anything so that we don't get any delays as i am paying $87.27 weekly even though i don't have a going bike anymore.
after giving them a couple of days to process the paperwork i ring them to check that they didn't need any more information... No they had all the info they needed and would give me a call back that day.
So about 4:45pm i miss a call from them as i was driving home not too worried as prob just to tell me all good right?
Nope! I phone them the next morning, yes claim has been accepted for the payment waiver insurance, amount owing on the account $1200 and something. we are paying out $850 or something like that. Hang one i say to them but i paid for platinum cover that should pay for everything right? No not so, they will pay for everything accept for the termination fee that they are charged for me closing the account early. What! you mean i am still going to owe money? Yep $519.10: FFS
After 4 phone calls to Christchurch i am pointed to the clause in my contract:

‘Vehicle Finance Payout’ means the amount owing by you under this Contract at the date of payment of the Total Loss claim, less any arrears, any default interest, any late payments, any payment for MTF's loss on an early repayment, any rebatable items, any additional interest and any amount of increased liability where there has been a variation to this Contract.
‘Vehicle Insurer’ means the insurance company named in the Comprehensive Motor Vehicle Insurance Policy.

So i phone Mt Eden Motorcycles and ask What the fuck where did this charge come from! Talk to one of the sales people there who was unaware of the charge. but could agree that this does seem high. A little while later i was surprised to get a phone call from Chris, the managing director from Mt Eden, now i have never met Chris but after talking to him and clearing up a couple of things he was concerned about, we both agree that although Mt Eden was aware that there would be a charge for this, $500 odd was a bit exorbitant.
Next mike (Who sold me the bike) calls very concerned, because he was also aware of this charge but like Chris was very surprised at the amount that was charged. obviously nothing they could do for me really but it was nice to get the phone call, and for them to fax me a copy of my purchase agreement.

So after a couple of phone calls to my wife (works in insurance!) I come to the conclusion that o.k. i wasn't aware of the charge but it is in black and white i have to pay for this. although i don't think that the fee is a "fair and reasonable" fee as their motto states all their fees will be i have no choice but to pay for this. but as my wife's boss said they may not be morally right but they have done nothing illegal.

So i ring MTF back and said basically look i have no problem paying for this charge as in clause blah blah blah i am under obligation to, but as i am now running my car to and from work my gas costs have risen from $30 per week to $120 per week. Could i look at paying this off over a slight longer period to make the payment and my gas bill more manageable? They reply with sure not a problem at all you can pay it off over 12 weeks oh but wait we will be charging you another $150 in interest to do this.
I hung up after trying to reason with them on this because i was so mad!

So after another very irate call to my wife and some soothing and helpful advise (Mrs Fiz I love you honey) i call them back and ask to speak to someone more senior than the call center people i have been dealing with.
"ok sir we will get Mrs X to call you back in 10 mins"
4 hours and a couple of phone calls later i finally get to talk to some person who after a 40 min phone call agrees to let me pay the now $436.83 off over a longer period at a lower rate and not charge me any interest on that figure as she herself conceded that the figure is high.
RANT OVER!

The whole point of this thread started to, as the title states, warn anyone that might have taken finance and the payment waiver insurance out with MTF like me, that you could be in for a massive shock when you come round to claiming on this.
Hence i will not be using MTF for my next bike!

[Mrs Fiz]

As someone who works in the insurance/finance industry...
Legally, MTF have done nothing wrong. Fizbin signed the contract and the clause was there in black and white. That's why you should all read the small print. Now, we know that realistically you're going to be thinking 'blah blah blah, shiny new bike, blah blah blah'. Without sounding like a nana (or someone's nagging wife!!) make sure you understand what you sign, before you sign it. But let's be honest, you'll probably still sign it, regardless of the clause. After all, there is a shiny bike to consider. But at least you'll be forewarned and won't get a horrible shock like Fizbin did.
Secondly, if you don't understand, or it isn't clear how MUCH a fee might end up being...ask. They're legally obliged to help you understand the contract. If you don't understand it, don't sign it. If you don't want to sound like a doofus, ask a friend who might know what they're talking about. You've got practically unlimited resources in this forum. Ask someone here. Guaranteed someone will know it means. And if you didn't know, chances are extremely high that at least 25 other people didn't know either.
Okay, nagging wife, signing out.

[discotex]

Here's a free tip.

Pay cash for depreciating assets - especially ones that can become instant scrap metal.

EDIT: that's not meant to sound condescending btw.

[Mully]

Thanks for the heads-up. Gutted on your behalf though.

and i paid 19.25% interest over 36 months for this

19.25%!! Fucken OUCH!!!!

[Mully]

Here's a free tip.

Pay cash for depreciating assets - especially ones that can become instant scrap metal.

EDIT: that's not meant to sound condescending btw.

That's true, but in his defence, he thought he was covered for this.

I guess another free tip is: Read the Contracts.

[Fatjim]

Discotex, why?

[jrandom]

Pay cash for depreciating assets...

Leasing works well in certain contexts, too.

[discotex]

Leasing works well in certain contexts, too.

Totally... Particularly if you own your own business then breaking up the total price into a fixed monthly fee helps manage cashflow and accounting. Of course someone other than you usually makes money out of the deal or they wouldn't do it.

[DMNTD:Me]

Of course someone other than you usually makes money out of the deal or they wouldn't do it.

Buy it personally and lease it to your own Co. ?

[Mully]

Buy it personally and lease it to your own Co. ?

Hmm, now that's an idea.

[vifferman]

Whelp, I paid for half of my current bike with a trade-in, one quarter with the credit card (paid off each month, no interest), and the remaining quarter on MTF, just for convenience. The interest was some piddling amount.
I was happy enough with how it all worked out that I'd do it again.

Now GE Money is a completely different kettle of fish...

[discotex]

Discotex, why?

Because you lose more money more fasterer. Especially if you damage the bike and then have to then sell/trade/write-off for less than the loan. Even if you insure against that scenario like fizbin did you're paying even more cash for nothing on top of the interest.

Using debt for toys = bad
Using debt for assets that make you a profit = good

That said there are always possible scenarios where it could work out better depending on how much finance you use and what the interest rates do.

And, of course how much joy you get out of your toys may make it worth it whatever the cost.

[Mully]

Now GE Money is a completely different kettle of fish...

Ohhh, I hates them, I hates them like Mr T hates Jibba Jabba.

[discotex]

Buy it personally and lease it to your own Co. ?

I'm no accountant but it's probably easier to just buy cash as the business and depreciate the asset and claim expense as per the tax rules at a guess.

[discotex]

Whelp, I paid for half of my current bike with a trade-in, one quarter with the credit card (paid off each month, no interest), and the remaining quarter on MTF, just for convenience. The interest was some piddling amount.
I was happy enough with how it all worked out that I'd do it again.

Now GE Money is a completely different kettle of fish...

A perfect example of what I mean by it can be worth it whatever the cost. Having the bike you want can be priceless and if you walk in eyes open it's all good.

I just get tired of hearing 20somethings whinge about being screwed by GE when they signed the freakin contract for the 32inch LCD that is now worth fuck all and they still have 2 years left of payments.

Shit I must be turning into an old man