4 Tips for Motorcycle Loan Financing
If you're like many people, you'll need to secure financing before investing in a new motorcycle. There are many options on the market, from bad-credit loans to standard bank financing. Terms can vary dramatically, so it's important to compare each offer to find the one that's best for your financial health. For more information, contact us at Santa Maria Harley-Davidson or visit our location in Santa Maria, California, serving Ventura and Bakersfield.
1. Get Loan Approval Before Shopping for a Motorcycle
Before you look at bikes, take time to find out what loans you qualify for based on your income and credit score. This step might seem boring, but it can save you a great deal of heartache — you'll know exactly what you can afford before you set foot in a showroom. Different companies can offer dramatically different terms, so make sure to shop around to get the best deal. Keep in mind that many lenders require you to maintain full-coverage insurance until the loan is paid off; make sure to factor the cost of the premiums into your bike budget.
2. Understand the Basics of Each Financing Agreement
If you're not a financial expert, getting a motorcycle loan can be an overwhelming process. Before you choose a lender, it's important to understand the basic terms of the agreement. Start with factors like the loan term, interest rates, late fees, and required down payment. Ask if the interest rates are fixed or variable, and look into the fees you'll incur if you pay off the loan early. This information makes it easier to compare the loans side-by-side and determine which one best fits your financial situation.
3. Think Critically About Promotions
Promotions are everywhere in the motorcycle industry. You might qualify for a rebate at a dealer or a special introductory interest rate. Before you sign, read the fine print. If you take the rebate, are you locked into a higher interest rate? If so, you might end up paying more in interest over the life of the loan. Loans that come in the form of a private-label credit card often come with a low monthly payment. These deals sound great, but you might find that your monthly payments rise dramatically after the introductory period ends. Online motorcycle financing calculators can help you compare the total costs of each deal.
4. Choose the Shortest Possible Loan Term
When it comes to motorcycle loans, shorter terms are often better for your financial health. That's because motorcycles lose value relatively quickly; with a longer loan term, you might end up owing more than your bike is worth. As always, run the calculations before making a decision. Longer-term loans with low, fixed interest rates can be a great deal if you pay them off early. Just make sure to factor in any penalties for early payoff.
When you're financing a motorcycle, a bit of preparation can save you a lot of money in the long run. If you need advice, feel free to reach out to our staff at Santa Maria Harley-Davidson. If you're ready to start shopping, come by our location in Santa Maria, California, where we serve Ventura and Bakersfield.