Buying a motorcycle is a super exciting decision, but one of the main considerations you’ll have is deciding how to finance it. Here are five of the best ways to finance a motorcycle.
A great way to get a new motorcycle is to pay for it in cash, however that’s not always a feasible option. If you buy a motorbike with cash, you’ll end up spending less overall than with any of the following options, because you won’t need to pay any interest or lending fees. However, cash obviously requires you to pay the full purchase amount upfront, which is not an option for all drivers.
A secured loan is a good option if your bank or credit union offers a motorcycle loan, or you look into something like Driva motorbike finance. In this case, you’ll be borrowing money from the institution and agreeing to use a certain item, normally the new bike you’re buying, as collateral for the same amount of money.
Secured loans are good if your bank or credit union offers them because your interest rate should be lower than what you would pay with any of the following options. The money you save in interest could be used to increase the amount of motorcycle insurance coverage that you carry.
This is one of those options that can turn out to be a blessing or a curse. A credit card is an unsecured loan, meaning that you’re borrowing money from the issuer and paying it back by making monthly payments as well as interest on top of what you’ve borrowed. If you pay your motorcycle credit card bill off in full and on time, you can save a lot of money compared to the other options listed here. However, if you don’t repay your credit card company as agreed, then it’s best that you think twice about using credit cards to finance a motorcycle purchase.
Personal loans for buying motorcycles aren’t as common as some of the options listed here, however, they can still be an option. Just like with credit cards, personal loans are unsecured loans that you’ll pay back by making monthly payments plus interest
The benefit of taking out a personal loan to finance your bike purchase is that the interest rate isn’t as high as some of the other options listed here, and you’ll be required to pay back as little as 50 per cent of the outstanding balance each month on top of interest.
Many motorcycle dealers offer financing through lending institutions such as banks or credit unions. If you finance your motorcycle purchase through the dealer, you’ll be making monthly payments and paying interest on top of the amount borrowed. However, in most cases, there’s no limit to how much you can borrow when using a loan from a dealer. The benefit of having a dealer loan is that your interest rate and monthly payments will likely be lower than if you finance with a bank or credit union.
The only catch is that the dealer often requires that you purchase motorcycle insurance coverage through its company, which can increase your premiums.