Owning motorbikes can be an expensive hobby, so if you’re looking to buy a new set of wheels, you might be considering purchasing one on finance.
However, if you’ve never purchased a vehicle on finance, you might be wondering exactly what it involves, which is why we’ve put together this quick guide.
Why Choose Finance?
There are a number of reasons why you might choose to buy a bike on finance, although it’s a very popular option for those who are buying their first bike and are struggling to raise the funds for it.
Finance allows you to spread the cost of the bike across a period that’s more manageable, usually with a relatively low deposit, or even without a deposit at all.
It’s not the right solution for everyone, but finance can be a great way to get the bike of your dreams that little bit earlier.
Are There Any Restrictions?
Most lenders will only offer finance to those over the age of 18, although this does vary and there are often restrictions on which bikes can be bought with finance and this will usually be an age restriction on the bike itself.
One of the big worries people often have is whether they can secure a finance deal on a motorbike with a poor credit rating.
According to SuperbikeLoans.co.uk: “While a poor credit rating does make things a little trickier, it certainly shouldn’t restrict you completely.
“That’s because there are many specialist lenders available who can offer finance to people with all kinds of financial backgrounds.”
If you’re unsure on your current credit rating, you can check it for free using services such as ClearScore.
What Types of Finance Are Available?
The three main types of motorbike finance are hire purchase, personal contract purchase and personal loans.
Hire purchase is the most popular, where you can secure a loan against the bike which you pay off over time, and once the final payment is made, you own the bike.
Personal Contract Purchase is different as you’ll actually only borrow the amount that the bike will depreciate by, with a balloon payment at the end, which you can either pay and keep the bike or return it.
And finally, a personal loan gives you much better rates and flexibility, although they’re usually only available to those with good credit ratings.
To find out more about the various types of vehicle finance available, check out this guide from the Money Advice Service.
What Are the Terms?
The exact terms of each finance deal will vary depending on the lender and your own circumstances.
Motorbike finance deals are usually very flexible though, so for example, you could choose to put down a bigger deposit to reduce your monthly payments.
You can also often trade in your current bike as part of a part exchange, which will also allow you to borrow less.
In terms of length, this can also vary, but the bike will usually be paid off after about two to three years.