A motorbike can be a worthwhile investment as it can help you reduce the cost of transportation because they are more fuel-efficient than cars and much cheaper upfront.
However, before you go ahead with applying for and accepting motorbike finance, you should take a few things into consideration so that you can get the best bike for your money.
Loan Terms and Interest Rates
The most important thing to consider is what kind of interest rate and loan terms you might be offered. Different types and classes of motorbikes, as well as whether you are buying new or second-hand, will play a role in the kind of interest rate and loan terms you get.
The interest rate and terms you are offered will also depend on the lender and your personal creditworthiness.
A lower interest rate will reduce the overall cost of financing, make it easier to manage the repayments and bring the total cost of the loan down.
The time period over which you have to pay the loan off also matters. Longer loan terms lead to more interest being paid over time, while shorter loan terms result in higher monthly installments that could put pressure on your budget.
On the other hand, shorter loan terms will make the total repayment amount significantly less. Therefore, the faster you can pay it off without compromising your financial stability, the better.
Total Cost of Ownership
The total cost of ownership is made up of the upfront costs as well as the ongoing costs.
Any deposit you make in the beginning can play a key role in reducing the total loan amount and making the bike more affordable overall. If you can, you should try to put up to a 20% deposit to reduce the amount you would need to finance through a lender.
The larger your deposit, the smaller the loan will be, which results in less interest being paid over time. Additionally, when calculating the total upfront cost, it is important to consider other expenses such as registration, insurance and GST.
Other ongoing costs should also be considered, such as fuel, maintenance, insurance and registration fees.
Bear in mind that brand-new motorbikes will probably be cheaper to maintain and more fuel-efficient than older, second-hand models. So while a brand-new bike will be more expensive upfront, the ongoing costs might be lower.
Additionally, insurance costs will vary depending on the bike. High-performance or luxury bikes will have higher insurance premiums compared to standard models.
Choosing the Right Loan Offer
When you apply for motorbike finance, compare different loan options before committing to any of them. Different lenders will offer different loan terms, interest rates, fees and repayment flexibility options depending on a variety of factors.
It is important that you do not just go with the first offer you get.
At iCREDIT, we can help you compare financing options from up to 42 different lenders to help you find the best motorbike financing deal for your particular budget. Contact us today to get started.