When you’re in love with a motorcycle but don’t have the cash to hand, motorcycle finance can seem like the perfect solution. And it’s not a bad option as long as you know what you’re signing up for.
One golden rule is to avoid motorcycles which already have outstanding finance on them. It’s a big complication which can end badly for all involved, so you’re better off checking any secondhand bike is free from any finance or other issues as part of the buying process.
If you’re buying new, then things are a bit simpler, but there are still a variety of options – manufacturers generally offer finance deals, dealers may offer their own finance package, and then there are loans to think about.
- Consider your options. If you have the choice to take a personal or business loan it may offer better rates, and allows you to offer less than full price for the motorcycle you’re buying (which is often a condition for manufacturer finance packages.)
- If you’re borrowing from friends or family, make sure you get everything clearly agreed in writing, and make sure there’s an agreement in place for if your circumstances change. You don’t want to lose your family or friends for the sake of saving some cash on a new bike, unless you really don’t like them in the first place.
- 0% finance deals often have a limited time period, so check how long they last and what the rate or lump sum will be when the 0% honeymoon period ends.
- Look at how much you can pay up front – paying more as a deposit will reduce your payments in the long run.
- Check what happens with any loan or finance package if a payment is missed for any reason – if you find yourself between jobs for example, you don’t want your bike to be repossessed immediately.
Personal Contract Purchase deals:
These are a slightly difference form of finance. Essentially you pay a fixed sum to rent a motorcycle for a set period, and at the end of that time you can choose to either pay the remaining lump sum or just hand the motorcycle back.
It could be a good option if you might want to switch after the initial period, or to avoid having to pay the full price of a motorcycle that you might decide against owning. But you’ll need to be aware of any requirements such as using official dealers for all servicing, gap insurance (to cover the difference between the retail price and what insurance companies will pay out in an accident), and you’ll be locked into the bike for a set period of time.
The Rescogs Golden Rule for Finance:
There’s never any need to rush into an agreement for a motorcycle – take your time to understand what you’re signing up to, and don’t be afraid to question everything until you’re satisfied. There’s always another option or the chance to wait and buy the next bike that comes along. Even the likes of the Honda RC213V and Kawasaki H2 are produced in enough numbers that you can get the right deal eventually.