For a beginner who is looking at car financing for the very first time, the process would probably seem difficult and complex. However, if you only take the time to do some research and to read up on the different vehicle finance possibilities open to you, this shouldn’t be such a big problem.

One of the most important decisions that you need to make at the onset is what car you will buy. Of course, the price of the vehicle would play a big picture in the decision making process. Once you have decided on the vehicle you want to purchase, the next consideration is whether to get the help of a professional in order to source the funding, or whether to apply for a loan by yourself. Getting the assistance of a professional assistant or broker would probably be easier for you if you don’t want to take the time to learn the ins and outs of vehicle financing.

They are more knowledgeable when it comes to credit solutions since they know the available commercial vehicle finance options. However, you should remember that getting a professional would add to your total costs since they don’t offer their services for free.

If you prefer to get financing by yourself, don’t be discouraged. You would just need to spend a lot of time reading up on available information with regards to different loan packages. You would also need to learn how to analyze the different offers to get one that would work the best for you. The good thing is that usually, the lender is more than happy to explain the details of the vehicle finance options available and answer all the questions you may have. Don’t hesitate to also ask your friends or family who have taken out car loans before for referrals or tips when it comes to applying for vehicle financing.

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One of the most practical solutions that deliver as much as 40 savings in daily expenses is getting rid of our gas-guzzling SUVs and cars and get into the motorcycle trend. You may want to look at it as a temporary adjustment to weather the economic crises. So rather than sell-off your beloved car, you can get yourself a motorcycle loan, much like a car loan, with your car as easy collateral.

Things to Look Out For

Getting a loan to finance your motorcycle purchase should be viewed as an investment that requires some due diligence just like any foray into investment opportunities. Do some due diligence work by shopping around and inquiring about financing services.

The easiest way is to browse on motorcycle loans online and you’ll be amazed at the number of sites offering one. There are some basic things to look out for, like the term of the loan which should not be more than 3 years as the principal amount does not need to be as large as a car loan.

Bear in mind that the longer the term, the higher the loan cost at the end of the term. Check out the motorcycle loan rates and they should be no more than your typical car loan rates. See if the registration fees are included in the loan as most do. This should relieve you of having to register the bike after getting it.

Alternatively, you can get your financing directly from a motorcycle dealer who will most surely include this in its financing deal. Then consider the insurance coverage which should likewise be part of the deal. Last but not the least, find out about late payment penalties and surcharges and any favourable provision for paying the loan balance outright at any time during its term.

You could get a personal loan as they often are large enough to cover the cost of a brand new motorcycle. These are often unsecured loans and carry high interests but you should be fine if the term does not exceed a year. Most motorcycle makers offer in-house financing.

Honda leads here as they offer a Honda credit card which allows you to get the motorcycle of your choice and pay it off like any deferred payment scheme on a credit card. If you still have an active credit card that has sufficient unutilized credits, consider this as another financing option for your motorcycle.

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It often comes at a time when you need credit the most. Especially when you realize you can have substantial savings when commuting in the city on a motorcycle. A credit card can easily cover a low-end bike, but what do you do when you no longer have a credit card? You could avail of banks and online lenders offering bad credit motorcycle loans. But it’s still a good idea to minimize your exposure to debts in times of country-wide economic uncertainties.

Options for Purchasing your Motorcycle

If you have a car, sell it. Have a garage sale to convert you unneeded often whimsical purchases into cash. The proceeds can give you the financial muscle to own a more gas-efficient eco-friendly motorcycle. No need to take on a 500cc motorbike from those exotic brands like Motto Guzzi or a Ducatti. A simple 120cc Honda or Yamaha will do for city driving. You could opt for a more iconic and head-turning Vespa scooter, but being practical means shunning status symbols. Alternatively, you can use your car to collateralize a personal loan if you prefer a faster way to raising the cash. Check your online lending resources as there are many quasi-banking and lending firms online that over guaranteed bad credit motorcycle loans.

Things to Consider

It’s always a good thing to put out a down payment on your motorcycle to reduce the financing costs. Most motorcycle dealers offer this option with low interest rates for short term 12-24 month loans. You should avail of this as much as you can. But be careful to ensure you don’t extend or restructure the loan beyond its original term.
You are sure to be slapped with horrendous interest rates for the balance of your restructured loan. Having a bad credit is certain to increase your interest rates. This makes a down payment and a shorter loan period even more compelling. A motorcycle acquisition, especially in the low displacement category won’t cost much. Try to raise the cash for 30% down payment at the very least. This is a sure way to reduce your financing cost.

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Things to consider

This may seem too obvious, but it’s better to say it up front. Never start shopping for your dream motorcycle without first assessing you financial muscle. Whether what you have can defray the entire cost of the motorcycle or not, at least you have a starting financial footing when getting into a showroom. Then you can start shopping not just for the motorbike but also for the loan you need to complete the deal, in case your cash savings can only cover a part of it.

Don’t fall into the common mistake of getting 100% financing for your motorcycle. Bear in mind that the larger the loan, the more imposing the interests amounts you have to pay. Also consider a shorter loan term to pay it off. The longer the term, the higher the overall cost of the loan becomes.

Your cash savings can comprise your down payment. A 50% down will go a long way to getting a more comfortable motorcycle loan financing. Take advantage of low interest offers. Armed with a good enough cash savings for a down payment, avail of short term motorcycle loan rates which usually apply for 12-24 month loan terms. See that the insurance coverage and registration fees can be taken off from the loan proceeds as they are often cheap enough for you to pay off. Lastly, get a handle on any surcharges or penalties in case you inadvertently make a delayed payment on the loan so there’d be no surprises along the way.

If you don’t have enough cash savings to form the down payment, you have to accept a more expensive loan with longer term duration to ease your monthly payments. In this regard, it would be good to check that the loans don’t use the “rule of 78” which will slap you with the same interests even if you pay-off the loan balance before maturity. You’d never know if your finances will improve along the way so you pay off the remainder of your loan.

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You can also secure personal loans or avail from the low interest rates offered by many motorcycle dealers. Honda motorcycle dealers, for instance, offer the Honda Credit Card with which you can finance a motorcycle purchase. All these financing options can be sourced right form the comfort of you homes through online websites that offer pre-approved loans even for people with diminished credit rating.

Make a Down Payment

Low to medium power motorcycles, brand new or used, from 120cc to 250cc typically costs a fraction of a used car and can easily be financed even from short-term unsecured personal loans anywhere from $3,000 to $8,000. Motorcycle financing from dealers and banks often quote low APR with up to 100% financing. Regardless of which option to take, it is still a good to lessen your exposure to debt.

Having a cash savings that can cover even a third of the purchase price can greatly reduce the monthly amortization, term duration or motorcycle financing rates, especially if you’re just starting out without a credit rating that banks and lenders can fall back on. Bear in mind that a good credit standing opens up a lower loan cost.
Otherwise, be prepared to spend more in terms of interest rates.

Things to Consider

Always do your own research on the many options for financing your motorcycle. Check online lenders and motorcycle dealers that offer loan incentives for first time buyers. Many sites provide motorcycle financing calculator with which you can estimate the monthly payments by simply indicating the loan amount and any down payment you can put in.

If you are armed with a good enough cash to cover a down payment, you can avail yourself of those low interest rates that most dealers offer. Bear in mind that these rates apply only for short term 12-24 months loans. If at any time you ask for a restructuring to extend the term, those low interest rates instantly disappear and high interest rates will apply for the remainder of your loam amount.

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