Motorbike Finance

If you are looking to buy a motorbike, a personal loan can be a popular choice. This type of finance allows you to borrow a set amount of money to purchase your motorcycle. You then make monthly repayments with a fixed interest rate for the loan’s entire term. Personal loans can be beneficial if you have a good credit score, providing access to better rates from various lenders. However, with a poor credit history, approval may be difficult, and you might face higher interest rates.

A hire purchase agreement (HP) is a common motorbike finance option. With HP, you pay an initial deposit, and the remaining cost is spread over a set period. After making all repayments and the option to purchase fee, the motorcycle becomes yours. HP is suitable if you can’t pay the full amount upfront or have a small deposit. Remember, you won’t own the motorbike until all payments, including the option to purchase fee, are complete. Missing repayments can lead to repossession.

Personal Contract Purchase (PCP) is a motorbike finance option where you agree on an annual mileage and term at the start. The finance company calculates a guaranteed future value based on these factors and your deposit. The balance is paid through monthly repayments. At the end, you can make a final payment to keep the motorcycle, return it to the lender, or part-exchange it for another PCP or HP agreement. PCP is ideal for those who want to upgrade regularly but consider potential costs like excess mileage or damage fees.

Some franchise motorbike dealerships offer 0% finance deals, usually subsidised by the manufacturer. This allows you to spread the cost of a motorbike over a set period without paying any interest. While this can be an attractive option if you want to purchase a brand-new motorbike, it is important to remember that you may have a limited choice of motorbikes, and you will need a good credit score to be approved.

If you have bad credit, you may still be able to get approved for a personal loan to purchase a motorbike. However, expect to pay higher interest rates than someone with a good credit score. You may also need a guarantor who agrees to make repayments if you cannot. It’s important to shop around for the best deal, as some lenders may offer more favourable terms. Checking your credit score before applying can help you understand the rates and terms you can expect.

If you’re struggling to get approved for a personal loan, a hire purchase agreement may be a good alternative. With HP, you make an initial deposit and then monthly repayments over a set period. Once all repayments are made, the motorbike is yours. Some lenders may hesitate to approve HP for bad credit, but others might take a chance. Be prepared for higher interest rates and possibly a larger deposit than someone with a good credit score.

Personal Contract Purchase (PCP) can be an option for bad credit motorbike finance. PCP requires an initial deposit followed by monthly repayments. At the end, you can make a final payment to keep the motorcycle or return it to the lender. Expect higher interest rates and potentially a larger deposit if you have bad credit. PCP is a good choice if you like the option of regularly upgrading your motorbike, despite the higher costs.

When it comes to bad credit motorbike finance, choose the right option based on your financial situation. Consider your monthly repayment capacity and the amount you can put down as a deposit. Think about the contract length and any additional fees like early repayment charges or excess mileage fees. Be realistic about what you can afford and avoid overstretching yourself financially. By selecting the right option, you can secure motorbike finance and enjoy the freedom of the open road.