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Bike loan / finance questions

Discussion in 'New Riders and Riding Tips' started by bulby, Jun 9, 2011.

  1. Hi folks,

    I've got my Learners' course & test coming up in a couple of weeks, so I guess it's about time I get ready for my first bike.

    Any lenders you'd recommend? Or any I should avoid like a plague?

    I've been looking around and there are so many of them to choose from, and I don't have anything much to base my decision on.

    Oh, and um... this one might sound dumb(er than my previous questions), but... Can I get a car loan to buy a bike? :bolt:

    p.s. This is my first post. Nice to meet you all :)
  2. Typically the loan you get will be secured against the asset you're financing. Finance will also necessitate that you get comprehensive insurance (not a bad thing, just something to consider).

    The best rate / product will depend on how much you want to spend and perhaps on what bike. Also, your ability to repay and how you plan to repay will play a part.

    If looking at a very cheap bike then a low rate credit card may also be an option, as it offers a lot of options in terms of making extra payments (great if you're disciplined and get lump sums occasionally). While the credit card may have an annual fee a finance product may also have fees for making payments (even if you pay by direct debit), so be sure to check if there's a payment processing fee or similar when comparing.

    If you or your parents are a member of a credit union (or you're eligible to join a good one because of what you do), they may offer a good deal.
  3. The other advantage of a credit card is that comprehensive insurance will not be required. Of course you should still have at least 3rd party fire / theft, and consider if you can handle being without the bike if you break it. Again, the cost of the bike will factor into this thinking.
  4. Thanks, guys.

    Comprehensive insurance is not bad at all, considering I am planning to get it anyhow.

    I've set a budget of up to $6000 for the bike. Pretty much have my eyes set on either a Kawasaki VN250 or Suzuki VL250. Like the Yamaha XVS650A, they might go a bit over my budget. (Will start another one of those "which bike" threads later when the boss is not looking... lol)
  5. OK - Well, a reasonable rate will be between 11% and 14% - A low rate credit card will be comparable at 13% to 14% and should be in range for that sort of spend depending on your job / income.

    One other advantage of the credit card is the ease with which you can put other gear on it too. Decent gear is cheap insurance for your skin & bones. (Remember, you can always put a pair of scissors through the card and bin it if you're worried about your discipline)

    G.E., Suncorp, Aussie are reasonable options for straight out finance. Also, if you buy from a dealer check what they can offer and don't be afraid to ask for a better rate.

    All that said, the difference between 12% and 14% over 3 years is about $5 per payment or $180 over the term. (on $6000 financed)
  6. Hi mate, yes you can get an personal loan for a motorcycle much like you would a car etc from any of the major banks, and they generally will not require you to get comprehensive insurance for this (if its unsecured).
    im also looking to get a bit of debt finance for my bike (in about a months time), so i have done a bit of research already (not to mention i spend all day at uni doing this sort of thing)

    an important thing to consider is that motorcycles are dangerous, if you were to come off and break an arm or a leg etc and be unable to work you could find yourself up shit creek pretty quickly.
    so unless you have easily sold assets that you could be willing part with if needed, defiantly get compo regardless, or even consider income insurance if for some reason compo is hard to get (maybe you have a shit terrible driving record etc).

    Also make sure you ask for a better rate, especially if you are taking out the loan from your current bank as you have been loyal to them thus they should be loyal to you.

    Another thing, i would recommend sticking with a big bank rather then a random finance company, they are more likely to help you out/ waive repayments or dishonor fees should anything happen to you and you cant work.
  7. - Buy on credit card
    - Transfer balance to new credit card with 12months interest free on balance transfers.
    - Make your 'loan payments' into an interest earning account.
    - Pay off the card on the final day of the 12month period.

    Not only will you have no interest or finance fees, you'll actually be earning interest...
    It (literally) pays to think outside the box.
  8. Ok, this question has bugged me for a while now and I need to ask.

    In situations where the bike isn't the person's primary vehicle (i.e. they have a car), why do people go into debt for them? If you don't have a car etc and rely on a bike to get around, then understandable. However, what amazes me is how many people take finance out on bikes for what is a purely recreational endeavour.

    I just can't see the value in going into debt for recreational purposes, and the inevitable interest payments, risk that follows. Especially given over the course of the loan, people pay significantly more.

    Apologies for hijacking the thread - I am genuinely intrigued as to the thought process. I'm a little more traditional in the sense that if it isn't essential, then I'll save for it and won't go into debt. So trying to figure out why.
  9. i'd advise you to save up $2k or $3k and buy a real cheapie just to learn on. That way when you drop it, it won't hurt so much. Also, it will allow you to save and go into debt (if you want) when you get your real bike.

    No lams bike is really keepable (apart from the restrictable ones, but they are so majorly over-priced, its cheaper to buy an unrestricted bike of large capacity). Not compared to what is out there.
  10. Why not?

    I view any finance situation as such. “Is it worth the extra $X00.00 to have what I want now, rather than waiting 2-3years saving.”

    Is it worth $30-$40 per month on interest to avoid an agonising wait…? When it comes to bikes, the answer is more than likely always yes. People are much more likely to take out finance on things they want rather then things they need.

    But like I said, there are smarter ways to obtain finance.
  11. See that concept is foreign to me. Unless something is essential or an investment (i.e. buying a house), my view is far more traditional in the sense that if you can't buy it, then you can't afford it. Especially as taking finance is a liability. I suspect though, is that it is a fundamental difference in the way people use and view money.

    I'm not saying one is more right than another - just that it is a concept I am not familiar with (not unfamiliar with credit in general, have credit cards etc).
  12. @adprom. I can see where you're coming from, and I'm inclined to agree with you. I don't have a car, and the bike will be my primary means of transport. Technically, I can save up for another half a year and buy the bike outright. The problem is I've recently moved to Point Cook, where nearest public transport is 2km away (not a big deal) and buses only run until just before 8pm - This is the killer as I may need to stay back late at work from time to time. Hence, I need that bike pretty urgently. That and I just CBA waiting much longer... Guilty as charged :p
    Of course, I'm not foolish enough to rush it and ride to work as soon as I get my permit & bike.

    @gsxrjames. You're a genius! I was planning to do just that after reading the advices here, except I was going to pay off my interest-free debt as I go... LOL

    Anyways, great advices! Thanks, guys :)
  13. Yeh, well this is an obvious one then ;) I was more referring to one where its an entertainment device.
  14. This thought had occurred to me too, are there any rules against it?
  15. You may have to pay to setup the 2nd CC (going to another institute I'd probably have to foot an application fee etc. NAB won't give me a second CC but will happily bump up my limit - I don't pay fees with NAB because they have my savings).

    So long as you can fit the cost of the bike etc into your credit limit, even with a fee you'll still come out on top.
  16. :D Accountants are good for something. You can't forget about it completely as you'll need to make minimum payments, usually 2.5% of the card balance each statement (or close to). But def take advantage of the 'free' cash flow.

    In short, No. I've done this three times (my first bike and 2holidays).

    As Aza said, you just need approval for a second high limit card but there's nothing preventing you canceling it after the interest free period.

    There are plenty of cards ($0.00 annual fee) that have a balance transfer period of 0% or 2.9% (much better than a 14% loan). I wouldn't do it with an AMEX, but any visa/master card will work fine.
  17. Don't forget that TAC will pay a percentage of loss of income if you have to take time off work due to a transport accident. This should help with making repayments on your vehicle.