How can I finance a bike?

Some ride to relax, while others get an adrenaline rush from it. Motorcycles provide a level of freedom simply not available when driving on four wheels. Sleek convertibles and high-end sports cars come close, but they’re toys for rich people. Working-class folks prefer a bike. With the right motorcycle loan, they can have one for a price they can afford.

Financing can be tricky for those with no experience with it. There are multiple options for financing a bike and several questions that need to be answered before agreeing to any of them. Before a person gets into how to do this, they will need to check their credit score. It’s going to be a major factor in the terms and conditions of any financing they receive can get.

Should you agree to dealer financing?

Motorcycle dealers generally have lending partners that can offer financing for motorcycle buyers. They use this to advertise their business. Slogans like “no money down” and “all buyers approved” lure prospective customers and close deals for them. Those are nice features. Taking advantage of them doesn’t necessarily mean getting the best deal.

Sales is a game of leverage and levers. When a salesperson offers “no money down,” either the financing fees are high, or the sticker price is marked up. “All buyers approved” means the dealership is batching loan applications. Interest rates at places like that will always be higher than at traditional banks or online lenders, even with a low credit score.

This is not to say that all motorcycle dealers do this. It’s important for buyers to read the fine print. There are dealers that want to save their customers money so they can get repeat business and referrals from them. Those are good places to buy a bike. Customers should ask a lot of questions, and not jump at the first offer. The customer has the leverage and the salesperson needs the commission.

Banks, credit unions, and online lenders

Going to the bank before going to the dealership can save a person hundreds of dollars on a new motorcycle. Banks can do a pre-approval letter that the customer can take to the dealer, eliminating the need for dealer financing. In most cases, the bank loan terms will be better than what the finance company can offer, particularly if they have an account at that bank.

Credit unions have even better deals. Account-holders at credit unions are members, not customers, which gives them certain privileges that they wouldn’t get with a traditional bank. The credit union might even have a motorcycle dealer on their member list that they can do business with. A pre-qualification letter sent to a member should also open some doors.

The average cost of a new motorcycle is less than $10,000. That’s not for a fully loaded Harley, but there are models that can be bought for $4,000 to $6,000. Many buyers will take out a personal loan to cover that rather than jump through the hoops of dealer financing. If that’s the route they choose, online lenders might offer the best terms.

The Bottom Line

There are multiple options for financing a motorcycle. Most dealers offer financing through a lending partner. Banks and credit unions can do pre-approved loans before going to the dealership. Online lenders can provide low-cost personal loans for motorcycles. It’s important to shop around and find the best loan. There are plenty of choices available.

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