How to Finance a Motorcycle

Be sure you can afford the terms before taking out a loan

Person riding a motorcycle
••• Alexander Kirch / EyeEm / Getty Images

Even more than car owners and their cars, motorcycle enthusiasts tend to have a solid emotional connection to their bikes.

The problem with such devotion is that it can sometimes get the better of you, as when purchasing the bike of your dreams. Before visiting your local dealer or checking the want ads, spend some time determining just how much you can realistically afford to pay and find out all you can on the best and most economical way to finance your motorcycle.

Financing a Motorcycle Is Similar to Financing a Car

There are some differences between financing a car and a motorcycle, but there are more similarities, which really shouldn't come as a surprise. In both cases, you are buying a vehicle to get you around. In both cases, it's a pretty expensive proposition.

And in both cases, the lender will check your credit. If you are carrying a lot of credit card debt, consider waiting until you get it paid down before getting your bike. Lending money has a lot to do with taking a risk, and that's especially true for motorcycle loans.

Lenders know that riding a motorcycle is more dangerous, and therefore riskier than driving a car, which in turn means more risk for the lender.

Shopping for the Best Motorcycle Loan

Almost all motorcycle dealerships offer to finance to their customers. But they may be the most willing to work with you. Don't expect the best rates, however, and be sure that you read and understand the terms of your loan agreement completely.

Motorcycle manufacturers are another source of financing. They often offer special financing programs as part of their sales promotion efforts, particularly on newly introduced models or on models that are slow in selling. Always ask your dealer if there are any OEM (original equipment manufacturer) loans available on the models you are interested in. These options are, of course, for new bikes only.

One of the best places to seek out a loan is through a local bank or credit union. The rates and terms available are almost always better than you will receive from other sources.

There are several lenders that operate primarily online. Be sure to do a little homework to determine how credible they are and how they rate with their customers.

What to Avoid When Buying a Motorcycle

Taking out a loan with your home as collateral is something you should consider very carefully. Do you want to put your home at risk for a new motorcycle?

Another bad idea: buying a bike with your credit card. If you have a high enough limit, the thought is tempting. It's easy to do, and there's no credit check if you already have the card. The factor that should stop you from doing it, though, is the high-interest rates you'll be paying and terrible penalties you'll get stuck with if you get behind on your payments.

The best-case scenario when buying a motorcycle or making any large purchase is to wait until you have the cash on hand to do so. But if you're determined to purchase a motorcycle, take the same care you would with any other big-ticket item; be sure you can afford the terms and can handle any payments.

Consider How Much You Can Afford

If you take away one thing, let it be this: No matter how strongly that new shiny bike is calling your name, you should never give in to temptation unless you can afford it. Unless driving a motorcycle is your primary mode of transportation, a motorcycle is a want, not a need. Be sure to carefully consider the rates you are presented with, the down payment amount you can easily afford, and the monthly payment you can realistically pay without impacting your financial future.

Doing this diligence will pay off in the end — and get you one step closer to the bike of your dreams.