People who ride motorcycles often feel a strong emotional connection to their machines, perhaps even more so than owners of other types of vehicles. The challenge with having such a strong sense of commitment is that it might at times cloud your better judgment. When you’re out trying to find the bike of your dreams, it’s easy to let your feelings get the better of you.
Take some time to figure out how much you can reasonably afford to pay for the vehicle before going to the dealership in your area or looking through the classified listings online. Exploring the various options available to you for financing your motorcycle should be part of this process.
The Process of Financing a Motorcycle Is Very Comparable to That of Financing a Car
When it comes to financing a car or a motorcycle, there are a few key variances, but overall, there are more parallels than there are differences. You are purchasing a mode of transportation for yourself in either scenario, so this shouldn’t come as much of a surprise. Whether you’re looking to acquire a car or a motorcycle, you should be prepared for a potentially pricey transaction.
Additionally, the lender will verify your credit history in any scenario. If you have a significant amount of credit card debt right now, you might want to put off buying a new bike until after you’ve paid off some of that debt first. A credit score that is lower than it should be might hurt your ability to borrow money, make you appear riskier to potential lenders, and ultimately compel you to settle for a loan with a higher interest rate.1 2
Buying a motorcycle is intrinsically riskier than buying a car, thus this is one of the key distinctions between the two types of transportation.That indicates there is a greater risk associated with motorbikes, and you should anticipate that the cost of owning a motorcycle will reflect those increased hazards.
Where to Look for a Loan for Your Motorcycle
It is in your best interest to put off major purchases like buying a motorcycle (or any other expensive item) until you have enough cash saved up to pay for them in full. If you are set on purchasing a motorcycle with a line of credit, you should exercise the same caution that you would with the purchase of any other expensive item. You should make sure that you are familiar with the conditions of the agreement and that you are able to afford the monthly payments.
Nearly all businesses that sell motorcycles also provide customers with various financing alternatives. Expect lower prices from them despite the fact that they might be the most willing to cooperate with you because they are probably eager to make a transaction. When reading the conditions of your loan agreement, make sure to use additional caution.
Another possible source of funding is from motorcycle manufacturers. As part of their sales marketing efforts, particularly for models that are either not very popular or have just been recently introduced, they might provide special financing plans. Always make sure that you ask your dealer if there are any OEM loans (original equipment manufacturer loans) available on the models that you are interested in purchasing.
Take note that OEM lending options are only available for brand new bikes. These loans cannot be used to purchase a pre-owned bicycle.
When looking for a loan, going through a local financial institution like a bank or credit union can be one of the most cost-effective options. You will nearly never find a situation in which the conditions and pricing offered by this company are inferior to those offered by other suppliers.
There are many different kinds of financial institutions that offer loans, including traditional banks, credit unions, and online lenders. You should conduct your research before selecting one of these as a realistic choice. Conduct background research on the lending institution to assess how credible they are. Look for reviews written by previous purchasers.
Poor Alternatives for Acquiring Motorcycle Financing
You shouldn’t go into this procedure with the mentality that you will purchase the bike no matter what it costs you or how you finance the purchase. For instance, using your home as collateral for a loan is something you should think about very carefully and consider doing only in very specific circumstances. Do you really want to buy that new motorcycle at the expense of your house?
Putting the purchase of a bike on your credit card is yet another poor choice. This can be an enticing choice if you have a large enough limit because it is simple to do, there is no credit check, and there is no additional paperwork required. However, in comparison to the interest rates associated with other types of debt, those associated with credit card debt are typically quite high. Should you fall behind on these payments with a high interest rate, you may be subject to severe penalties.
The Crux of the Matter
You should never give in to temptation, no matter how loudly and insistently that brand-new, gleaming bike is yelling your name, unless you are very sure that you can pay for it. When it comes to transportation, the motorcycle of your dreams is probably not the only option you have available to you. Keep in mind that there are alternative choices available to you when you shop.
When you believe you have discovered a means to purchase a bike at a price that is within your budget, it is important to carefully analyze essential parts of the loan, including the rates, the down payment, and the monthly payment. Do you have a reasonable expectation that you will be able to meet these costs without your financial future being negatively impacted?
It will pay you in the end if you put in the effort to do your research before committing to financing, and it will bring you one step closer to the motorcycle of your dreams.