There are a lot of reasons you might want to buy a motorcycle. One could be because you simply love the idea of riding. It might be a dream you’ve always had or a hobby you want to explore. You can also use a motorcycle as your primary mode of transportation, and with gas prices high right now, it’s not such a bad idea.
However, not everyone has it in their budget to buy a motorcycle.
Looking for a used motorcycle can help you save money, but even then, you might want to finance it.
So can you finance a motorcycle, and if so, what’s the process like? We discuss it below.
Buying A Motorcycle
The prices of buying a motorcycle can vary significantly. The prices for a beginner bike can be anywhere between $5,000 and $10,000 on average. This would be a basic bike, fit for someone who doesn’t yet have a lot of experience riding.
You’ll need to factor in some costs aside from the bike itself. For example, you’ll have to get insurance. Your age, your driving record, where you live, and how often the bike model that you choose is stolen will play a role in your insurance costs. You might be able to get insurance for less than $500 a year, but it’s not guaranteed.
Your costs are going to add up as far as your equipment and maintenance too.
A car can usually go much longer between service intervals compared to a motorcycle. You also have to remember that replacing tires on a motorcycle can be expensive, and you might have to change your rear tire every 3,000 miles. Your chains and belts will need to be replaced occasionally, with costs usually between $150 and $250.
Your maintenance intervals on a motorcycle can be between 5,000 and 20,000 miles, and if you need something like a valve adjustment during maintenance, that can be expensive—as much as $1,500.
Other bike maintenance you’ll have to keep up with includes oil changes and chain maintenance.
An upfront cost will also be gear. At a minimum, you’ll need a high-quality helmet, but you should also get a jacket made of high-abrasion-grade leather, boots, and gloves. Otherwise, you’re putting yourself at risk. Plan on putting at least $800 to $1,200 toward gear when you start riding.
Once you’ve factored in those additional costs, you can start to plan for what your financing experience might be like.
Getting Motorcycle Financing
The process of financing a motorcycle is similar to what you would do if you were buying a car. There are plenty of lenders that will offer motorcycle financing, so as you would with any other type of financing, you want to compare terms and rates and make sure you’re getting the best deal.
A motorcycle loan is secured most often, so that means backed by collateral. The collateral is the motorcycle itself. When you get a secured loan, the property that’s the collateral can be repossessed by your lender if you don’t make the payments as agreed. If you want to know more about motorcycle features, read these motorcycle user manuals.
You could, if you don’t want to use your motorcycle as collateral, get an unsecured personal loan. Those are riskier, so they’re going to have higher interest rates, and you’re going to need a higher credit score to be approved in a lot of cases.
Lenders will usually classify auto and motorcycle loans differently, even though the general process is similar.
A lender may charge a higher interest rate for a motorcycle loan compared to a car loan.
You might also find that a lender will categorize motorcycle loan types. There may be loans for new motorcycles, used ones, and specifications on what’s considered a motorcycle and what isn’t.
Then, there will be lenders who won’t finance a motorcycle at all.
Getting A Motorcycle Loan From A Dealer
If you’re buying a motorcycle from a dealership, they might offer to finance it.
A motorcycle dealer could submit your application to lenders on your behalf, and it’s convenient, but it can cost more. A dealer might add their own fees to the quotes from lenders.
In-house financing might be offered, and it could appeal to you if you don’t have great credit, but these loans will have higher interest rates, meaning your cost of borrowing overall will be a lot greater.
Manufacturer Loans
Some motorcycle manufacturers, like BMW and Harley-Davidson, will let you apply for a loan through them online.
Loans From Banks Or Online Lenders
If you don’t want to go through a dealer or manufacturer, you can shop around at traditional lenders like a credit union or bank or an online lender. You can apply for preapproval, and like a car loan, your preapproval will probably include a quote on loan terms, such as an estimated interest rate and whatever amount you could be able to borrow.
Whether you decide to go with a loan from a federal credit union New York or choose to work with an alternative type of lender, before you try to get financing for a motorcycle, you need to check your credit score. You’ll also have to decide on a budget. If you’re going to make a down payment, if you can put more down, you’re going to pay significantly less in interest, but you have to balance your need for an affordable monthly payment.
Regardless of the particular path you take, before you try to get financing for a motorcycle, you need to check your credit score. You’ll also have to decide on a budget. If you’re going to make a down payment, if you can put more down, you’re going to pay significantly less in interest, but you have to balance your need for an affordable monthly payment.
A lot of lenders will want to know the specific motorcycle you want to finance, so you’re probably going to have to give them the VIN, and the mileage, as well as the year, make and model. That means deciding on one before you start the financing process.
Apply to a few lenders, even if you think your preference will be to go through the lender.
After you find the best deal for your financial situation, you’ll sign the paperwork and finance everything.
If you want alternatives to financing a motorcycle in a fairly traditional way, you can lease a motorcycle, use a home equity loan or opt for peer-to-peer lending. Each of these options has pros and cons you’ll have to think about.
