Perhaps you’re an official motorcycle enthusiast, riding a soft-tail Harley with the wind in your hair, intrepidly moving onward with the smell of freedom in the air. Or, maybe you’re new to the game and have just decided that it’s time you bought your first bike and try living on the wild side for a bit.
No matter where you’re at in life, whether you’re at the stage of living a life of travel, or even if it’s in the middle of a mid-life crisis, buying a bike is a big decision. The style of bike you buy is a big deal, and it will speak to others (and to you) about who you are.
Another thing to not take lightly is the process of financing a bike. Just like when considering financing or leasing a vehicle, there are several aspects of buying a motorcycle that you’ll want to take into consideration.
Short Term vs Long Term Loans
No matter what type of bike you’re looking to buy, whether you’ve scoured a Harley blog or check classifieds, it literally “pays” to know a few things about short and long-term loans.
A short-term loan is generally the optimal choice for those making their first motorcycle purchase.
Short-term loans usually ensure that you’ll pay the loan off quickly at a higher payment rate, and this is usually best if you’re looking to avoid negative equity. Often, short-term loans come with a lower interest rate based on your credit score. The higher the score, the lower the interest rate.
Long-term loans aren’t as attractive as short term as not too many people want to make payments over long periods of time. But long term loans can come along with benefits as well. Sometimes you can find a lender offering low promotion rates tied to long-term loans, and this avenue is attractive especially when there are no repayment penalties associated.
Find Out What You’re Approved for First
This is usually the biggest mistake people make when going out to find a bike. But, avoiding this mistake comes down to simple financial planning.
Picture this. You spot the perfect bike in the dealer’s lot. You drive around it day after day even before you see the price tag, but you know in your heart that you and this bike belong together forever. Then, you actually see the bike in person and it’s way out of your price range.
Believe it or not, this happens often. It’s not a great idea to get your heart set on a bike then find out you can’t get approved for financing.
Talk with lenders first, negotiate prices and weigh your options so that you know exactly what you can and can’t afford. This way, you’ll be able to make a financially sound decision as you choose a bike that’s right for you.
Cash Rebate vs Low-Interest Rate
It’s common for lenders to offer a choice between cash rebates and low-interest rates. Sorry, but you typically can’t come away with both. When this option is presented to you, it’s best to strategize for the long term.
Consider whether or not you’ll be keeping your bike or eventually reselling it. If you don’t plan on keeping it for long, it would be better to choose the cash rebate simply because you won’t have to pay the interest for very long.
If you’re going to keep your bike as a “toy” prized possession, or as your main personal mode of transportation, then you may want to consider foregoing the cash rebate option and choosing the lower interest rate. Over time, you’ll pay less for your bike by going this route.
No matter the method of financing you choose, you’ll want to do your homework in order to find the best bike for you and the best deal, hopefully, one that will be the easiest on your wallet.
According to most motorcycle enthusiasts, owning a bike is a lifestyle. You enter a new world and a new state of mind when you’re riding your bike, unbridled and free to set your senses upon the road. Regardless of your reasons for owning a bike, educating yourself on your finance options will ensure that you choose the best bike and the best finance plan for you and your wallet.