Motorcycle Finance in Australia

Motorcycles are a popular personal vehicle for many Australians: they’re fun, they don’t need much fuel, and they’re easy to park and store. But affording a motorbike can be a barrier, and it can be difficult to know where to start when looking at motorbike finance options.

Motorcycle loans can be a great way to get money for a motorbike purchase, and they are easier to access than many people think. Read on to learn how you can compare motorbike finance options and get the best bike loan available.

Contents

    Motorbike finance background

    Motorcycle finance works pretty similarly to other vehicle loans: the lender gives you the money for the bike, you make regular payments, and at the end you own the motorbike. The bike itself usually acts as the loan security, so if you fail to make payments, the lender can take the motorbike back.

    Motorcycle loan terms typically last from one to seven years. If you can’t get a lender to accept the bike as security, you can look for an unsecured loan (which means no collateral).

    What are the costs to expect for a motorbike loan?

    Like with any big purchase, you have to know what your budget is and what the market prices are. Motorbikes usually cost between $4,000 and $25,000, with the average being around $10,000. Used bikes can go as low as $400, while newer bikes can cost as much as $40,000.

    The price is affected by any features or accessories the bike comes with, the engine and transmission, the size, and which city or state you’re shopping in. The cost also depends on the type and brand of the motorcycle. If you’re searching for a premium brand and specifically looking for Harley-Davidson financing options, you’ll pay different prices than if you’re looking at more basic bikes and looking to finance a Honda motorcycle.

    How are motorbike loans typically set up?

    With motorbike price tags in the thousands or tens of thousands, most Australians search for motorbike finance options to spread the payments out over a few years. You can borrow between $5,000 and $55,000 for an average bike loan, and there are custom payment options available. For a regular personal loan, you could get as much as $100,000 depending on your income.

    Something else to consider is that interest rates for motorcycle loans will vary greatly, based on the initial deposit you put down, your credit history, and the size of the loan itself. However, the average interest rate ranges from 5.83% all the way up to 24%. Lower interest rates are ideal for keeping the total cost of the motorcycle finance process as low as possible.

    If you get a dedicated motorbike loan, the entire sum will only go towards the cost of the bike. With an unsecured personal loan, you could use those funds towards safety gear (like helmet, jackets, and gloves), insurance, repairs, and maintenance.

    Ways to get a motorbike loan

    • Online Lenders

      Certain lenders operate online and can provide a specialised motorbike loan, or even a regular personal loan that you can use towards a motorbike. These are a quick and easy way to get money for your purchase.

    • Banks and Credit Unions

      Banks and credit unions often have bike-specific loans available, typically using the motorbike as collateral. This creates lower risk for the lender, which enables cheaper interest rates and longer payment terms.

    • Dealership Financing

      If you’re buying a motorbike directly from the dealership, you could get the loan application included in the bike purchase process. For instance, Harley-Heaven finance deals can often be done this way.

    • Manufacturing Financing

      Are you looking specifically for KTM finance options, or maybe you’re looking into Harley financing? If you’ve got one particular brand that you favour, you could get financing directly through that manufacturer.

    Pit stop: getting the right motorcycle loan

    All of this information is essential for being prepared ahead of a large financial decision like taking out a motorbike loan. You don’t want to get pressured into a bad deal, or have the wool pulled over your eyes and not understand what you’re signing.

    You also want to make sure that you examine all your options. There are several great sources of motorbike financing that don’t involve a typical “big bank” loan. Sometimes, you may realise that you need to look elsewhere to get the money you need.

    Alternative motorcycle finance methods

    • Motorcycle Leasing

      Rather than getting a motorbike loan, it may be easier to lease a motorbike for a short period. This is a way to try out a motorbike before committing to buying it outright, but one drawback is that you’re making payments without getting any closer to owning a bike in full.

    • Home Equity Loan or Line of Credit

      For many Australians, their home is the most valuable thing they own, and home equity loans can be a low-cost motorbike finance option. However, defaulting on the loan means your whole home could be repossessed.

    • Peer-to-Peer Lending

      Instead of depending on a large company for money, some opt for a peer-to-peer loan lender, which often considers your income rather than your credit score. These types of loans do usually come with higher APRs and extra origination fees. This choice is great for those trying to get bad credit motorcycle loans

    • Credit Card

      If you’ve got a credit card with a high limit, you could put an entire motorbike purchase on it. This is a nice way to avoid the headaches of bike loan applications, but some credit cards charge very high interest. This is also a possible bad credit bike finance option, since credit cards are easier to get than a loan.

    Motorbike finance FAQ

    What is a motorbike loan and how does it work?
    A motorbike loan is a financial commitment allowing you to borrow money for a motorcycle purchase, and the motorcycle itself provides loan security. Some car loan lenders will also grant money for motorcycles, but others will not, so you may have to get an unsecured personal loan instead.
    What can I use the money for?
    Motorbike finance programs are flexible to match the wide variety of vehicles out there. Many people look for dirt bike financing options and are not sure whether recreation-oriented vehicles like that have loans available. In fact, motorbike loans can be used for sports bikes, adventure bikes, cruisers, trail bikes, classics, and even all-terrain vehicles.
    Are there bad credit motorcycle loans available?
    Bad credit does not mean you will never get a bike loan, but it can make the process harder. Usually, customers looking for bad credit motorcycle loans are charged steeper interest rates, since they are viewed as more risky by the lender. To get the best interest rates, it may be useful to repair your credit before you start submitting motorbike finance applications.
    How do I find a good motorcycle loan for me?
    The main things to look at are the interest rate (whether it’s fixed at one rate, or variable with the market), the comparison rate (which factors in your interest rate plus other fees and charges), and any loan fees (application fees, service fees, and late payment fees). Also consider the term (duration) of the loan and any flexible repayment features.
    What’s the best time to buy a motorbike?
    Winter is usually the time when motorbikes are cheapest, since fewer people are riding bikes. This is also when companies are trying to sell off old stock and make space for new products. When business is slower, you are not competing with too many other buyers.

    Driving home the takeaways for motorcycle loans

    Motorcycle finance can be a great way to afford the bike of your dreams without having to pay for the whole thing in one day. Just like with car loans, there is a whole world of lenders who specialise in helping customers purchase new or used motorbikes. Doing some research can help you access affordable motorbike finance options and be on the road in no time.