Looking to save a bit on the purchase of your next machine? Considering buying a second-hand model as a cost-saver? Most Australians need to keep their major purchases such as motorcycles within some form budget limits. When those budgets are a bit tight, buyers look to find savings wherever possible. Typically, that can include buying second-hand goods rather than new. Prices of used goods are lower than the equivalent new models. But when buying a ride with finance, it may be also worth considering the differences in financing new and second-hand goods – specifically, the costs of used motorbike loans.
While buying second-hand may save money compared with price tag on the new machine, there can be savings to realised on new machines in other aspects of the purchase and the financing, to be considered in the buying process. Buying new can often provide additional benefits which may reduce the cost of purchase. For riders seeking savings by buying used models, Jade Bike Loans compares new with used motorbike loans highlighting how to reduce finance costs with low rates.
Comparing New and Used Motorbike Loans
There are two types of credit products available to finance motorcycles – Secured Motorcycle Loan and Unsecured Personal Loans. New and good condition second-hand models are typically financed with the secured credit option. Whether or not a second-hand model may be financed with secured credit, depends on the lender accepting the machine as suitable collateral for the loan. Most recent models would typically be acceptable collateral.
While the same credit products can apply for new and second-hand machines, the interest rate and other aspects of a specific loan offer can vary. From the savings angle, lower rates typically apply to financing new machines. Lower rates mean lower repayments, lower interest accrued and an overall lower total outlay for the purchase.
The amount required to purchase a second-hand machine is typically less than required for the equivalent new machine. So, a lower loan amount would then mean lower monthly payments. But how much can you borrow on either purchase price? Borrowing limits are determined by the lender assessing the credit profile of the individual and the loan amount in relation to the value of the machine.
If a lower borrowing limit is approved, the buyer may need to make a larger deposit. An aspect which may impact current available funds. The borrowing limit, or loan to value of the machine ratio may come down to the price paid.
How to Save on Interest, Realise Other Benefits with Motorcycle Finance
The interest rate is critical to the monthly repayment but also to the total paid for the machine. So how can you save on motorcycle loan interest and therefore save on the purchase? Using a broker is one way which may deliver lower rates and other benefits.
Rates vary across the consumer credit market. Buyers can have a tiresome and time-consuming task to cover enough lenders to be confident that they have secured the best available rates. We handle that task for buyers by covering a vast section of the market quickly and efficiently. That time savings may be the difference in capturing a quality second-hand machine and missing out.
An important flow-on from using a broker for lower rates is that there is no impact on the credit score of the loan applicant. Many loan seekers may not realise that every time they apply for a loan to find the best rate, the lender reports that to Credit Reporting Agencies. Multiple applications for the same loan, made to find the best deal, may be seen as a negative when lenders check credit profiles. A reduced credit score may reduce the ability to be offered the best rates on future credit applications.
For second-hand buyers seeking finance, using a broker provides additional benefits. We support buyers by checking the PPSR to ensure the machine is not under finance and we have access to systems to carry out other checks on machine and seller.
Calculating Repayments on New and Used Motorbike Loans
Buyers wondering what the difference in payments for new and second-hand machines will be can easily calculate estimates using our Finance Calculator. While rates on second-hand machine finance will need to be quoted, estimates can be derived by varying the rate used for calculations. The loan amount can also be changed to see how much extra per month a new machine may be in loan repayments.
New v Second-Hand: Additional Considerations
Buying second-hand rather than new, does offer the opportunity to acquire a machine at a lower price. But there can be other cost-savings available with new machine purchases.
The savings to be made could depend on whether buying second-hand through a dealer or on the private market. Private sales may offer lower prices than dealers, but buyers need to be alert especially if buying online and are strongly encouraged to do all the necessary checks.
Buying new from dealers can come with special offers to sweeten the deal. Buyers can look to purchase during sales events, which may make prices extremely competitive with second-hand. Current run-out sale prices and discounts are being offered by Harley-Davidson and Kawasaki Motorcycles.
Another aspect to consider is the maintenance and servicing costs, especially over the first few years of ownership. New models generally come with manufacturer warranties and with an expectation of many kilometres before major mechanical work and parts replacements would be required. Second-hand machines do not generally offer such certainty, but state consumer laws should typically apply to the purchase. Funds may need to be set aside to cover routine and unexpected maintenance costs.
When purchasing second-hand and you want to trade-in an existing machine, buyers may also need to consider if the dealer is prepared to accept the trade-in. A trade can reduce the purchase outlay, but all dealers may not be prepared to offer trades on second-hand stock. If not, buyers will have to sell on the private market.
In summary, consider all aspects of the purchase, comparing financing on all options with our quick quote service, and take into any other savings which may be realised.
To realise savings with lower rates on new and used motorbike loans, contact Jade Bike Loans on 1300 000 003
DISCLAIMER: IN REGARD TO ANY ERRORS OR MISREPRESENTATIONS IN THIS MATERIAL, NO LIABILITY IS ACCEPTED. THE DETAILS, CONTENT AND DATA IS PRESENTED PURELY FOR GENERAL INFORMATIONAL PURPOSES FOR MOTORBIKE BUYERS AND THOSE SEEKING MOTORCYCLE LOANS. THIS IS NOT INTENDED AS THE SOLE SOURCE OF INFORMATION FOR FINANCIAL DECISIONS. IF SPECIFIC ADVICE IS REQUIRED AROUND FINANCIAL DECISIONS, READERS SHOULD SEEK THEIR OWN FINANCIAL ADVISOR.
" alt="">