10 Tips for Financing a Motorcycle

Financing a motorcycle can be a great way to get the bike of your dreams without having to pay the full price upfront. However, it's important to approach motorcycle financing with a clear understanding of the process and the potential pitfalls. In this article, we will provide you with 10 tips to help you navigate the world of motorcycle financing and ensure you make the best decision for your financial situation.

Know Your Credit Score

Before you begin the motorcycle financing process, it's important to know your credit score. Your credit score will play a significant role in determining the interest rate and terms you are offered by lenders. You can check your credit score for free through various online services. If you have a high credit score, you may be eligible for lower interest rates, which can save you a substantial amount of money over the life of your loan.

Set a Budget

Setting a budget is crucial when financing a motorcycle. Determine how much you can comfortably afford to pay each month without stretching your finances too thin. Consider not only the monthly loan payment but also expenses such as insurance, maintenance, and fuel costs. By setting a realistic budget, you can ensure that you don't end up in a financial bind due to your motorcycle payments.

Shop Around for the Best Interest Rates

Just like with any financing, it's important to shop around for the best interest rates when financing a motorcycle. Different lenders may offer different rates, so it's worth doing your due diligence to find the most favorable terms. Consider reaching out to banks, credit unions, and online lenders to get a sense of the rates and terms available to you. This will help you secure the best deal possible and save you money in the long run.

Consider a Down Payment

While it's not always required, making a down payment can have several benefits when financing a motorcycle. A down payment can help lower your loan amount, which in turn reduces the amount of interest you will pay over the life of your loan. Additionally, a down payment shows the lender that you are committed to the purchase, making you a more attractive borrower. If possible, aim to put down at least 10-20% of the bike's purchase price.

Understand the Loan Terms

When financing a motorcycle, it's essential to understand the loan terms before agreeing to them. Take the time to review the loan agreement carefully and ask any questions you may have. Be sure to look out for any hidden fees, prepayment penalties, or other clauses that may impact your ability to pay off the loan ahead of schedule. Knowing the terms of your loan will help you make an informed decision and avoid any surprises down the line.

Consider Gap Insurance

Gap insurance is a type of insurance that covers the difference between the amount you owe on your motorcycle loan and the actual cash value of the bike in the event of a total loss. This can be particularly beneficial if you are financing a motorcycle with a low down payment or a long loan term. Gap insurance can provide you with peace of mind and protect you from financial hardship if your bike is stolen or totaled.

Don't Finance for Longer Than the Motorcycle's Depreciation Period

Motorcycles typically depreciate in value over time, especially during the first few years of ownership. To avoid being "upside down" on your loan, where you owe more than the bike is worth, it's important not to finance for longer than the motorcycle's depreciation period. This will help ensure that you are not paying off a loan on a bike that is worth less than what you owe.

Consider Pre-Approval

Getting pre-approved for a motorcycle loan can give you a better idea of how much you can afford and simplify the buying process. With a pre-approval, you will know exactly how much you can borrow and what your interest rate will be. This makes negotiating with dealerships easier since you already have financing in hand. Additionally, having a pre-approval can help you avoid falling victim to high-pressure sales tactics at the dealership.

Read Reviews of Lenders

Before choosing a lender to finance your motorcycle, be sure to read reviews from other borrowers. This will give you insight into the lender's reputation and customer service. Look for lenders with positive reviews and a track record of providing excellent service. Taking the time to research and choose a reputable lender can save you a lot of headaches and ensure a smooth financing experience.

Consider Pre-Owned Motorcycles

Lastly, consider purchasing a pre-owned motorcycle instead of a brand-new one. Pre-owned motorcycles often come at a significantly lower price than new ones, which can result in lower loan amounts and monthly payments. Additionally, pre-owned motorcycles may have already gone through the initial depreciation period, meaning you are less likely to be upside down on your loan. Take the time to research and shop around for a quality pre-owned motorcycle that fits your budget and preferences.


Financing a motorcycle can be a smart way to get the bike you've always wanted. However, it requires careful consideration and planning to ensure you make the best decision for your financial situation. By following the tips outlined in this article, you can navigate the motorcycle financing process with confidence and secure a loan that suits your needs. Remember to know your credit score, set a budget, shop around for the best rates, and understand the loan terms before making a final decision. With these tips in mind, you'll be ready to hit the open road on your new motorcycle.


  • Q: Can I finance a motorcycle with bad credit? A: While it may be more challenging to secure financing with bad credit, it is still possible. Some lenders specialize in working with borrowers with less-than-perfect credit scores. However, keep in mind that you may be offered higher interest rates and less favorable terms compared to borrowers with good credit.

  • Q: Is motorcycle financing similar to financing a car? A: Yes, motorcycle financing is similar to car financing. Both typically involve taking out a loan from a lender and making regular payments over a set period. However, there may be some differences in terms of interest rates, loan lengths, and associated costs, so it's important to be aware of these variations.

  • Q: Should I get financing from a dealership or a bank? A: Both options have their pros and cons. Financing through a dealership may offer convenience, as they can handle the paperwork and sometimes offer special promotions. On the other hand, banks and credit unions may offer more competitive interest rates and loan terms. It's recommended to compare offers from both sources and choose the option that best suits your needs.

  • Q: Are there any alternatives to traditional motorcycle financing? A: Yes, there are alternative financing options available, such as personal loans or using a credit card. Personal loans may offer more flexibility in terms of loan amounts and repayment periods, but they may come with higher interest rates. Using a credit card to finance a motorcycle should be approached with caution, as credit cards often have high interest rates that can lead to significant costs over time.

22 October 2023
Written by John Roche