Being able to finance a motorcycle has allowed many people to spread the cost of a new or used motorcycle over a chosen period of months/years, without having to pay the full amount upfront. And with many manufacturers and dealerships offering lower APR rates or money-off deals, it is no wonder why people are choosing to go down the financing route.

There are plenty of different options out there for you to choose from including a personal loan, hire purchase (HP) or a personal contract purchase (PCP), however, the one you use will entirely depend on your personal circumstances and finances.

In this blog, we are going to be running down just some of the ways you can finance a motorcycle as well as discussing what is required. So without further do - let’s get into it, shall we?

What do I need to finance a motorcycle from a dealership?

If you intend to finance a motorcycle, you will be required to have:

  • 3 months worth of payslips/ bank statements
  • Be at least 18 years old
  • Valid motorcycle licence
  • Have a good credit history
  • And, you may need a guarantor

It is also worth noting that if you have any serious endorsements on your licence such as driving without insurance or drunk driving convictions, this can affect your chances of being accepted for motorcycle finance.

Can you finance a motorcycle without a licence?

If you do not have a full motorcycle licence, you can finance a motorcycle providing that you have at minimum, a provisional licence. If you do not have a provisional licence, you may find yourself being rejected for motorcycle finance and will have to wait until you have attained a licence.

What is the difference between HP and PCP?

One of the biggest differences between HP and PCP finance is that at the end of your HP financing term, you will own the car. In contrast, with PCP you will have three options including paying off the rest of the bike and owning it, switching it in for another model or a newer model, or giving the vehicle back and having the positive equity and original deposit returned to you (all going well).

HP financing contracts will also typically have higher monthly repayments than PCP as there is no ‘balloon payment’ to pay off at the end of the term. On either of the financing options you do have the choice to pay it off early if you decide you wish to do so, the choice is entirely up to you.

Can you sell a bike that’s on finance from a dealership?

It is illegal to sell a motorcycle that still has outstanding finance. This is because you are not considered the legal owner until you have paid the finance off on your motorcycle.

Suppose you do intend to sell a motorcycle with outstanding finance. In this case, you will need to notify the lender and arrange the settlement of the balance before you even consider selling it.

Can you pay off bike finance early?

As we mentioned above, whether you’ve signed a PCP or HP finance contract, you will have the option to pay it off early if you wish to do so. Please be aware that in some instances you may have to pay an added ‘settlement’ fee - so make sure to always check the full details of your agreement!

Do you need full coverage on a financed motorcycle?

If you intend to finance a motorcycle, most dealerships and finance companies will request for you to have comprehensive insurance. Others will accept TPFT (third-party, fire and theft) insurance, however, this will vary between dealerships - so it is always worth checking first!

Suppose you do go down the PCP route. In that case, you could consider purchasing an additional GAP (guaranteed asset protection) insurance policy that would pay off any outstanding finance on the bike and/or the original deposit put down in the event of a claim.

Can I use a personal loan to buy a motorcycle?

Instead of signing yourself up for a PCP or HP contract, you can alternatively get yourself a personal loan with the bank and pay outright for your bike that way. If you decide this is the option for you, you will own your two-wheeler right away and will pay the bank back each month for a chosen period until it is paid off.

When choosing to opt for a personal loan, you can play about with the amount of years or months you want to make payments for, if you think you’re in the position to pay it off far quicker than the standard PCP or HP contract - then this may be the route for you.

It is worth noting that there is no right or wrong way of financing a motorcycle, it will very much depend on your personal preference and what you can afford. Remember to weigh up all options with an open mind, considering what you can truly afford.

How to qualify for personal loan

When applying for a personal motorcycle loan, the requirements are very similar to those when signing up for PCP or HP financing contracts. These requirements can include:

  • Be at least 18 years old
  • Valid Identification ie. Passport or Driving Licence
  • Proof of address
  • Bank statements/ proof of income
  • A good credit score*

*Please note that the guidelines will vary between different banks and loan companies so it is always worth checking what you’ll need for the exact loan you’re applying for.

Lexham has got you covered

So there you have it, I hope you enjoyed my article on everything motorcycle finance.

Last but not least, whether you’re purchasing a bike via one of the financing options or by getting out a personal loan, you will need an appropriate level of insurance coverage. If you are in need of motorcycle insurance - make sure to get a quote direct with Lexham!