FAQ: Buying a motorcycle on finance
Most bikers would jump at the chance to own another motorcycle but unless you're a millionaire, it's not always that simple.
That's why buying a bike on finance can seem like the perfect solution but what does it really involve?
Superbike Loans has been providing finance deals on motorcycles for the past three years.
We had a chat with Duncan Hurren, Head of New Business, to find out the answers to some of the most frequently asked questions about motorcycle finance.
1. What type of biker could benefit from motorcycle finance?
Many types of bikers benefit from finance. A huge market for us is young riders getting their first 50cc or 125cc motorbike. If you don't have the savings, finance can help you get the motorcycle and spread the payments over a manageable period.
2. Why should a biker consider getting their next bike on finance?
Finance enables the customer to buy a bike with a relatively low deposit and, in some instances, no deposit at all. There are flexible terms, a fixed rate and once the agreement has been completed, the bike belongs fully to the customer.
3. How quickly can you get a finance deal and what's the typical contract length?
Finance can be arranged very quickly, as little as 24 hours from the initial enquiry. The typical contract length for a motorcycle is around 36 months.
4. Are there age restrictions on finance deals or are they available to everyone?
We can only arrange finance for people over 18 years old and maximum age limits can vary. The age of the bike is also a consideration with hire purchases -- some lenders will only lend for a motorbike that will be no more than ten years old at the end of the term, whereas others will go up to 18 years old.
5. What about licence restrictions?
Some lenders will only offer agreements to people with full licences but we can cater for almost all situations with our broad panel of finance providers.
6. If you've got a poor credit rating, what's the impact on finance deals and can you still buy a bike that way?
Our extensive range of lenders means that we can offer finance to people who may have had problems as well as those with excellent credit ratings. All of our lenders offer different terms and rates, depending on the client and the motorcycle.
Lending rates are generally based on risk so good credit history will mean you qualify for lower rates because you are a lower risk. Likewise, the worse your credit history the higher the rate because you are deemed a higher risk.
7. If you're a convicted motorist, will this count against you when applying for finance?
Lenders take note of any endorsements on your licence but this will rarely affect an application. Speeding and parking violations are generally ignored but more serious offences (driving without insurance, multiple drink driving convictions) could affect the proposal.
8. How flexible are finance deals?
You can always pay a bigger a deposit and borrow less, meaning lower monthly payments. Alternatively, most of our lenders allow customers to overpay their monthly payments which will bring the agreement to an end sooner.
9. Can you part exchange your current bike as part of a finance deal?
Part ex is common in the motorbike market and is often welcomed by dealers as it helps maintain stock levels. Part ex also allows the customer to borrow less, therefore paying less interest and resulting in smaller monthly payments.
10. What are the different forms of motorcycle finance?
- Hire Purchase (HP) is the most common. You secure a loan against the motorbike, which you can then ride, and pay the loan off over time. Once the last payment has been made, the bike is yours.
- Personal Contract Purchase (PCP) is less common and only available to people with good credit ratings. You'll only borrow the amount that the bike will depreciate by, meaning lower payments, but at the end of the term there is a balloon payment. You can either pay this and keep the motorbike or the vehicle needs to be returned.
- Personal Loan is also only available to those with good credit files. This type of finance gives the customer more flexibility and better interest rates.
11. What advice would you give to anyone who's looking to get finance on a new bike?
Always research your options, look at company reviews (Trust Pilot) and don't rush into anything. Bikers tend to know other bikers, so ask around and see what good experiences others have had getting finance. You can also check your credit rating online to get an idea of what deals you may be able to get.
