Motorcycle consortium: What’s the best of 2021?
Is your dream to buy a motorcycle, but paying for one in cash, or even financed, still not an option? Today we are going to show you how it is possible to have your own motorcycle with the motorcycle consortium.
The motorcycle consortium is a safe alternative for those who do not want or cannot extrapolate the budget, but still want to guarantee a motorcycle as a means of transport. But as there are several types of consortia available, we will show you in this article how to choose the ideal one.
First, the most important
- The motorcycle consortium is a forced savings that helps you realize your dream of owning a motorcycle, without having to pay debts or pay interest rates.
- Although the acquisition of the motorcycle is not immediate with the motorcycle consortium, there are still numerous advantages in this type of purchase.
- To join a motorcycle consortium that is right for you, and that fits in your pocket, you need to consider some important factors.
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Best motorcycle consortia: The ideal for every situation
Anyone looking for a motorcycle consortium most likely already has a motorcycle model and a payment amount in mind. To try to please everyone, we have put together a selection with the best motorcycle consortium suppliers available today. Check out:
- The consortium for those who want a Yamaha
- The best option to buy varied motorcycles
- The ideal consortium to own a Honda
Membership Guide: Everything you need to know about the motorcycle consortium
Nowadays the motorcycle is a means of transportation that streamlines the routine, mainly because it helps to escape congestion. But, in addition, the motorcycle is also, nowadays, a great ally for the increase of income, considering the wide delivery market that emerges in the country.
Whether to get around, to work or even to walk on weekends, the bike is a dream. But the fact is that it is not a cheap means of transport and, therefore, not always buying in cash, or even financed, is a valid option.
That’s when the motorcycle consortium comes in, a safe alternative that helps you buy a motorcycle by paying only what you can, leaving out debts and interest. Therefore, in this Membership Guide we will show how the motorcycle consortium works.
What is the motorcycle consortium and how does it work?
The motorcycle consortium is a way for you to self-finance to pay for your motorcycle. It works like this: Groups of people interested in buying a particular motorcycle are formed.
The participants in this group, who are called consortium members or quota holders, pay a portion of the amount determined every month for a period stipulated in the contract. With all the money raised, a common savings is formed.
Thus, every month, one or more people are drawn and they have the right to withdraw the credit for the purchase of the motorcycle, in cash, from the total amount collected by the group. But, even with the money in hand, the winner continues to pay the installments until the end of the consortium period.
Therefore, it is possible to guarantee that all group participants will have their chance to use the money to buy the long-awaited motorcycle.
That way, with the motorcycle consortium you acquire your motorcycle without interest, without entry and without bureaucracy.
However, it takes patience to wait for you to be contemplated so that you can then use the credit and buy the bike.
The administrators of the motorcycle consortia are the ones who manage the payments for the draws and the contemplations. And who supervises and regulates the system of consortia and administrators is the Central Bank.
What is the difference between motorcycle consortium and financing?
There are three ways to buy a vehicle such as a motorcycle: Paying in cash, financing the total amount or through the consortium.
Cash payment requires that you have the entire amount in hand, which is almost never a viable option. The financing, on the other hand, requires that you have at least 20% of the total value of the bike to make your entry and the rest of the amount is paid in installments.
However, these installments have interest that can be quite high, resulting in a substantial increase in the final value of the bike.
In addition, companies need proof of income and credit assessment by banks in order to finance it, which may or may not be approved.
With the motorcycle consortium, as we have seen, there is no need to pay the down payment, nor pay in cash, let alone go through credit analysis. To summarize, here are the main differences between these modalities of buying a motorcycle:
How long does a motorcycle consortium last?
This period varies according to the administrator of the motorcycle consortium. But in general, a motorcycle consortium can last between two to six years. In other words, patience is necessary because you can only be drawn at the end of this period.
But, if you don’t want to depend on the draws, in some consortia you can bid and try to receive the letter of credit more quickly. It is also possible to pay monthly fees in advance and settle the total balance before the deadline.
Did you know that even if your motorcycle is stolen, you still need to pay the consortium?
So it is important to take out insurance when you receive your vehicle.
Do the motorcycle consortium installments have interest?
As we have seen, in the motorcycle consortium there is no interest on the installments you pay monthly. But it is important to know that there is an administration fee that is embedded in the installment you pay in the consortium.
Still, according to experts, this rate is less than the interest rate charged on financing. it is also worth mentioning that the installments may undergo annual adjustments.
What happens if I delay payment of the consortium installments?
If this occurs, you will have to pay the amount with interest and a fine. But if you delay many installments, you risk being excluded from the group.
Those who leave the consortium for default must wait until the end of the period to redeem the money already applied and still pay the fine. In addition, if you have already purchased the motorcycle and failed to pay the remaining installments, you may have your vehicle impounded.
What can I do with the letter of credit from the motorcycle consortium?
When you are drawn you will have to choose the model of the bike, if this is not already stipulated in the group. Then, you must arrange the purchase with the seller and notify the administrator, since she is the one who will pay for the bike. That is, the money from the letter of credit does not fall into your account.
It is also possible to use credit to pay off a loan.
In addition to buying your motorcycle, it is also possible to use credit to pay off a loan.
There is also the possibility of converting the letter of credit into cash, but only after 180 days of contemplation.
Is it possible to buy a used motorcycle with the motorcycle consortium?
The letter of credit allows you to purchase any item within the category, so you can buy a used motorcycle instead.
But be aware: Administrators usually place a limit in relation to the year of manufacture of the vehicle, so check this condition in the contract.
How to participate in a motorcycle consortium?
To participate, you must look for a consortium administrator or bank that brings together groups of people interested in the same model of motorcycle.
There are two ways to join a motorcycle consortium: Joining a group in formation, or hiring a quota from an already formed group. When closing the deal, you receive a payment slip to pay the installments monthly.
Membership Criteria: What to review before joining a motorcycle consortium
Before being part of a motorcycle consortium group, it is essential that you know the rules that are set out in the contract. And the fact is that the conditions of the consortium vary widely from one administrator to another.
Therefore, our recommendation is that you carefully evaluate some factors that can make all the difference in the end. Are they:
- Trusted administrator
- Motorcycle model
- Credit letter
- Bid or draw
Below we will explain in detail each of these criteria.
The first factor that you must take into account before closing a deal is to choose a reliable motorcycle consortium administrator.
Therefore, it is essential that the administrator has authorization from the Central Bank to sell consortia. Therefore, check this information before closing the contract. ( 1 )
Depending on the consortium administrator, you will have one or more options of types and, mainly, motorcycle brands.
So it is important to evaluate well. For example, if you choose an administrator for a particular brand of motorcycles, you will obviously only be able to purchase motorcycles from that company.
If you choose a motorcycle consortium carried out by a bank, for example, the options for brands and models are broadened.
Then, evaluate the value of the letter of credit, which is the amount you want to buy your motorcycle.
The important thing here is that the letter of credit has an amount corresponding to the price of the vehicle you want to buy.
Also note that the amount of benefits you will have to pay varies depending on the plan you choose. The motorcycle consortium plans can range from 12 months to 80 months.
It is worth mentioning that some administrators include life insurance in the benefits of the motorcycle consortium, which may be an additional advantage.
id or draw
It is important to know the ways to be contemplated before signing a contract with a motorcycle consortium. The most common is the draw.
However, as we have seen, it is also possible to offer bids. In other words: whoever offers the most importance can take the letter of credit, just like in an auction.
Also note that the number of sweepstakes varies according to each administrator and according to the number of participants in the motorcycle consortium. And of course, the more draws, the more chances you will have to be won.
The motorcycle consortium is the best option for you who want to buy a motorcycle, but do not have the money to pay in cash or want to pay the high interest on a loan.
At the consortium, you pay a monthly fee and expect to be drawn to receive the credit you will pay for your motorcycle. But, before entering a motorcycle consortium, it is important to choose a reliable administrator and evaluate the rules of the contract well.