man shaking hands with motorcycle salesperson

How to Finance a Motorcycle

Buying a new motorcycle is a big investment. A beginner motorcycle can often cost between $5,000 and $10,000, and pro-level models can be much more expensive. So, the million-dollar question (although hopefully not literally) is: What’s the best way to pay for a motorcycle? 

When it comes to how you’re going to pay for your new bike, there are a lot of different options. You can finance a motorcycle through the dealership you buy it from, through a bank or via a plethora of other options. We’ll discuss each of these motorcycle financing options in this article. There is, however, an option that you should consider before any other: buying your motorcycle with cash.

Why Cash Is King When You’re Buying a Motorcycle

Purchasing a motorcycle with cash has a lot of advantages, including:

  • You won’t pay any interest on your purchase
  • The bike will belong to you from the moment you take it home
  • You’ll have more money for key gear purchases like a helmet or Bluetooth motorcycle helmet speakers

You’ll get the satisfaction of knowing that your bike is all yours, and it will almost certainly be cheaper in the long run. However, here’s a pro tip: Don’t mention that you’re paying cash until you’ve gotten the salesperson to agree on a final price on the bike, as many will give you less negotiating room if they know you’re paying cash.

If you can’t buy the new bike you want with cash, consider whether it’s truly in your price range. It doesn’t necessarily mean you can’t afford it, but needing financing for a new bike can be a signal that it’s worth taking a second look at your big financial picture. If you’ve decided that it’s still a financial decision that makes sense for you, there are several ways you can finance a new bike purchase.

Financing Through a Dealership

Almost all motorcycle dealerships offer some kind of financing. The big advantage that you’ll get from financing through a dealership? Convenience. You can choose your bike and sign the loan paperwork, all within a couple of hours on the same day. However, dealerships know that this convenience allows them to offer less generous loan terms, such as higher interest and shorter repayment periods.

Don’t be afraid to make a counteroffer to a dealership and shop around for better terms. Their salespeople are allowed to negotiate, and you’ll often get some of the best deals this way. However, remember that your credit score, down payment and financial history, will all have a big effect on what kind of terms you’re able to get.

Financing Through a Manufacturer

Many motorcycle manufacturers also offer their own financing programs to encourage people to buy their bikes. These are also known as OEM (original equipment manufacturer) loans, and they’re often comparable to or slightly better than dealer loans. Note that you’ll only be able to get an OEM loan for a new bike.

Financing Through a Bank or Credit Union

Banks and credit unions can be some of the most attractive sources of financing for a new motorcycle. You’ll likely get the best loan terms by financing through your bank or credit union, including lower interest rates and fees. However, you’ll still need reasonably good credit to get a motorcycle loan through your bank, and not all banks will finance a motorcycle purchase.

Financing Through an Online Lender

Online lenders are the newest option in the motorcycle financing landscape. Some offer acceptable terms and good service, and they can sometimes provide better odds of approval than traditional loans. However, many online lenders have very high-interest rates, hidden fees and other unattractive features, so you’ll need to research the lender and read the terms of the loan extremely carefully.

How Not to Finance a Motorcycle

There are also some motorcycle financing options that can leave you with a financial road rash. One of the most common traps is purchasing a motorcycle with your credit card. Interest rates on credit card debt tend to be significantly higher than what you’d get from a bank or a dealership. Thus, you’ll ultimately end up paying a lot more for your bike if you finance it with plastic unless your card has an exceptionally low APR.

Taking out a personal loan against something like your house or car title is also a really bad idea. You don’t want to jeopardize the essentials of life for something that, despite how much fulfillment it might give you, is ultimately a luxury.

If you’re smart about it, financing your motorcycle can be a great option for getting a throttle in your hand sooner. Just remember to always use great care in reading the loan terms and to set a purchase budget and stick to it. Soon enough, you’ll be ready to fire up your motorcycle communications system and hit the road with your friends.