Motorcycle Loans

[anybodii]

I've posted a topic about this before, but I'm just curious of how banks lend money for motorcycles. I know they offer these loans, but I know most banks have a minimum they loan for cars, is this true for motorcycles? I was looking into getting a gas saver ( 250 ) which is only about 3 or 4k, I was hoping to finance some or all of it. Does anyone know if banks loan this low amount for a motorcycle? It would be a newer one 2008 or newer with low miles. If so, do they normally requrie a down payment? I don't have perfect credit, but its good. Nothing bad about it, just limited.

[Tazman81]

Hopefully someone with more experience with motorcycle loans will reply, but I believe that banks that do loans for motorcycles normally only do them for a shorter time period (i.e. 18 or 24 months) because of the lower amount of the loan.

Also, if you do not have a motorcycle license, you may also want to check on insurance for a motorcycle.  If you are an inexperienced rider, the insurance could end up costing you more than it would have been if you just kept a vehicle and the insurance cost on the vehicle.  Of course this may not necessarily be the case, but just a thought to consider.

[John060675]

I think you will find success at your local credit union.  Mine, NC State Employee Credit Union, would offer a low amount loan on a motorcyle if needed.  My other bank, Wells Fargo, does not list much information for me to answer your question.

[keny01998]

Banks do offer MC loans and I had two loans in the past. The minimum loan was $3000 at 6.9% for 36 months. My second loan was $7000 at 5.9% for 36 months. Most of MC loans don't extend longer than 36 months unless you are financing a Harley or Victory that cost above 10 grands and they are offering loans up to 60 months with those big boys at 5% rate or higher.

[anybodii]

Thanks all for your responses. It seems banks don't necessarily care to lend on bikes I guess. I might just end up doing a personal loan, my bank offers motorcycle loans up to 60 months, but I don't know what they use to do that, do they normally set a limit like $7,000 or more for longer than 36 months? Or is it just a year restriction? I plan to buy a brand new bike, but it would only be a 250 which are around $4,000 new, with $1,000 down payment. I assume motorcycle would suffice as collateral for a secured personal loan?

Also, is dealer financing something to look into? I've heard of car dealers tagging extra interest for their own profit, don't know how much that actually happens though.

Also, when rate shopping for a car I know within 30 days its all counted as one hard pull, is the same true for a motorcycle loan? or personal loans?

[GregB]

Many of the motorcycle companies offer their own financing and usually have attractive rates toward the end of the summer selling season. BMW has very reasonable rates and will be about the same as their car rates. My 2007 bought near the end of the model year is 1.9% on $9,000 with $0 down for 60 months.  Honda, Yamaha, Suzuki will be more than typical car rates through dealerships and probably for a shorter period. Banks seem to have little interest in motorcycles as they don't understand the difference between somebody like me that last crashed a motorcycle 40 years ago and a 20 year-old person that wants a sport bike and will probably crash it within weeks.

Don't forget the cost of helmet, jacket, boots and how often you can use a motorcycle in your climate. Insurance can be very high on bikes based upon the loss rates for that motorcycle. My $21K R1200RT is $312/year, my $9K G650X is $219/year. My $11K sportbike was $1762/year, which is why it is now taken to the track on a trailer instead of insuring it for street use.

If you have no experience on motorcycles, I would not even consider buying one until you take an MSF course. In most states, that will get you a license so that you can test drive a bike at a dealer that offers test drives.

[Anonymous]

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@anybodii wrote:

Also, is dealer financing something to look into? I've heard of car dealers tagging extra interest for their own profit, don't know how much that actually happens though.

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Yes it is something they do.- and believe it or not, the 3 topping for 7.99 Pizza Special Dominos is running, the Pizza does not actually cost them $7.99. The $2.39 Coca Cola at the restaurant probably only costs them 30 cents with refills. When you cable company charges you 15.99 for HBO they are only being charged maybe $1.23 per subscriber by HBO.

Dealerships are not charities.

Dealerships exist to make a profit in what they do, and yes they have "Spread" between the wholesale rate the bank is lending to them and the rate they are charging you. Unless your state laws do not have a cap the spread is usually a function of credit score (worse your credit the better the spread for the dealership). No one is being bought at .99% and having the dealership mark them up to 13.9%.

By the way, your bank has a spread, the difference between the interest rates they lend at and the interest rates they give to depositers is their spread. 

Most banks and credit unions will lend for motorcycles. the rates are higher then car loans as no one really "needs" a motorcycle, and there is more risk involved with a motorcycle loan then a car as you can hide the mnotorcycle in your house if you quit making payments.

Dealership finance companies for motorcycles are there to help the dealership sell bikes, yes there is a spread, but they exist to get you on a bike.

In some cases the rate a deaelrship will offer you after being marked up is still in line with what you can get as Joe Consumer from that same bank. 

[anybodii]

Thank you for your detailed replies. Sometimes I just get a little impatient and wanted results. I went today to see the Senior VP of the bank I deal with, I guess I didn't think that being a family friend with a VP of a bank helps. Got approved for up to 60 months 3% interest.