Used motorbike finance can differ from new model loans and buyers looking to save on buying a machine should compare all features and details of the loan types. Trying to save a few dollars on everything we buy is a major focus at the moment. The high rate of inflation has caused significant hikes in the costs of living, any saving can be a win for the weekly budget.
While finding specials in the supermarket is one thing, a major purchase with financing presents a totally different scenario. Many aspects need to be considered. When it comes to buying a motorcycle, many buyers may look to buying second-hand to save rather than buying new due to the lower price tags. But if they require a loan to make that purchase, they need to look closely at the details of the finance as much as the price tag. While the smaller loan usually required for a second-hand compared with new machine can mean smaller payments, other issues should be considered.
Loans for used motorbikes and new models can differ with the interest rate, loan amount allowed, the lender’s range of credit products, credit score requirements, and the collateral requirements. Within the credit product options available to second-hand buyers there can also be variations.
These differences may be clearly obvious with the product description, may require closer evaluation of the fine print, terms and conditions, or may not be detailed until a quote is requested. In the quest to ensure that a second-hand machine does present a genuine savings, buyers may also look at the costs of ownership over the projected ownership period. For example, the additional maintenance and repair costs that may be required on a second-hand bike compared with a new machine under warranty.
To assist buyers with initial planning, we provide an overview of the key details to watch for when seeking and comparing loans for used motorbikes.
Key Differences with New and Used Motorbike Finance
One of the main differences with financing a new compared with a second-hand machine can be the collateral requirements for the loan. New goods are generally readily acceptable to lenders as loan collateral. For many buyers, the machine can be the only collateral that they need to offer.
Second-hand goods require consideration by lenders for collateral suitability. Good quality, recent used models will generally be acceptable, but possibly not as the only collateral required. This may depend on the value of the machine which may differ from the price being paid. Lenders look at the value of goods in relation to the loan amount and the interest that will accrue on the loan when considering collateral requirements.
This value-price ratio may also create differences in the amount that lenders will approve for borrowers. The personal financials and credit score also affect the approved loan limit. A larger percentage of the purchase price may be approved for new compared with second-hand machines.
The interest rate offered on loans for new and second-hand goods can also differ. Higher rates may apply to used motorbike loans. Rates may also vary with either fixed or variable rates, fixed rates do not change over the fixed term providing certainty for borrowers. Variable rate loans will change with Reserve Bank decisions.
Comparing Used Motorbike Finance Options
When it comes to the credit products available to finance a second-hand motorbike, the type of loan can depend on the options offered by individual lenders. Loans will primarily be secured or unsecured, but there can be variations in the specific features of different loan products. Lenders determine the features for their specific credit products and their own approval criteria.
Secured Motorbike Loans use the machine as the collateral for the loan. Lenders may offer a specific secured loan for motorbikes or a general personal secured loan which can be used for a range of goods. Insurance is required on the motorcycle.
Unsecured Personal Loans do not require collateral and can be used for machines which are not accepted as collateral such as collectibles, older models and restoration projects. Insurance is not required as the machine is not being used as collateral.
Secured loans are the preference for most buyers as they offer a much lower interest rate than an unsecured loan and may allow for a higher loan limit. Many unsecured loan products will have a maximum loan limit.
The interest rate on secured loans is typically fixed. Unsecured loans may have a fixed rate but typically have a variable rate which is subject to change.
Buyers should also check the terms available from different lenders on their loan products. Is the term long enough to deliver you a monthly repayment you can afford?
How to Save on Used Motorbike Finance
To save on a loan for a second-hand motorcycle, buyers can seek the best possible interest rate. This may be achieved by using a broker to cover many lenders quickly and without affecting their credit score. Improving the credit score and financial position may also attract a better rate.
Lenders will be looking at the value of the bike compared with the loan requested when assessing applications. Making a larger downpayment to reduce the loan required may result in a better outcome.
Use our Finance Calculator to see how different loan amounts and different interest rates deliver different monthly payments to plan your purchase.
To save on used motorbike finance, contact Jade Bike Loans on 1300 000 003 for the best rates, most suitable lender and expert advice on sourcing your best loan option.
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.
