Many motorcycle owners are enthusiasts with many buyers of new machines upgrading to a new ride quite often. When considering that upgrade and when the purchase is being made with financing, it can be smart to also consider the best way to trade-in a motorbike. While it sounds simple to trade-in a motorbike when buying a new ride with finance, the experts at Jade Bike Loans point out the options for buyers to consider.
The available options when trading in can affect the loan on the new motorcycle. Considering the best way to buy your new ride and dispose of your current machine, may result in a better loan outcome or a better personal finance outcome.
Trade-in a Motorbike – The Basics
When purchasing a new motorbike, riders basically have two choices - trading in their current ride or selling it on the private market. To be in a position to trade, buyers would need to be buying the new machine from a dealer that does accept trade-ins. When trading-in, dealers will make an offer for the machine. This offer made be deducted from the purchase of the new machine, or in some cases, dealers may offer buyers the cash.
What buyers should be keenly aware of, is how dealers price trade-ins. Keep in mind that the dealer will need to sell the machine to recoup what they are paying you. They may put the machine in their used bikes department, or they make sell it in the trade market to another dealer. Whichever way they plan to on-sell the machine, trade-ins will typically be at wholesale prices.
If there are loan repayments outstanding on the current machine, that needs to be considered. The dealer will know that the buyer will be looking for any trade value to cover what they owe, plus maybe a little more as a discount on the new machine price. The lender with the existing loan will have their interest in the machine as loan security registered with the PPSR.
The owner will need to cover all outstanding loan repayments plus break fees because they are finalising the finance before the end of a fixed finance term. This will need to happen in order for the machine to be traded or sold privately. It can be possible for the dealer to handle settling the existing loan on behalf of their customer. If arranging the new machine finance through Jade, we can assist with that process, to simplify the purchase.
The alternative to trading in is to sell the machine yourself, privately or through an auction house. There are many online platforms available for selling used motorcycles. Private buyers can be ready to pay a higher price than a dealer is prepared to offer on a trade. To assist with the decision, sellers should obtain their pay-out figure on the machine and browse the market to see what similar machines are selling for.
Selling a used machine on the private market can be highly successful and can be time-consuming and frustrating. The process may depend on the particular model and the price the seller is willing to offer. Models in good condition and in high demand will obviously sell faster and possibly at better prices than some others. Checking out what’s currently selling online may assist with the decision as to whether to trade or sell.
Loan Effects When Buyers Trade-in a Motorbike
If the dealer offers you a price which covers any existing amounts on a current loan plus more, then using the trade to reduce the amount due on the new machine can have a positive effect on the new machine finance. Where no money is owed on an existing machine, even better. The full trade offer can be used to against the new machine price.
Where a trade is used as essentially a deposit, the amount required for the new machine finance is obviously reduced from the full purchase price. A lesser amount borrowed means lower monthly repayments. A factor which could be of key importance to balancing budgets.
Comparing a no deposit/no trade-in loan application with an application with the reduced finance amount with the trade may also result in a better financing rate. When approving loans and making rate offers, lenders look at the amount being requested with the value of the goods to be financed and used as collateral – the loan-to-value ratio or LVR. A lower LVR poses a lesser risk, and lenders may consider a lower interest rate offer.
Lower rates and lower loan amounts both delivering lower monthly repayments. To assist in making your decisions, use our Motorbike Finance Calculator. Monthly repayment estimates can be calculated based on different financing amounts and the differences noted. For the purposes of obtaining loan estimates, use the current rates we are offering on Secured Motorbike Finance for new machines.
Applications for new motorbike finance can be made before obtaining a trade-in price. When applying, let us know the details of any current loan arrangements on an existing machine and we can contact the lender for the payout figure.
Speak with Jade Bike Loans on 1300 000 003 for more information on how to get the best finance if planning to trade-in a motorbike on a new model.
DISCLAIMER: IN REGARD TO ANY ERRORS OR MISREPRESENTATIONS IN THIS MATERIAL, NO LIABILITY IS ACCEPTED. THE DETAILS, CONTENT AND DATA IS PRESENTED PURELY FOR GENERAL INFORMATIONAL PURPOSES FOR MOTORBIKE BUYERS AND THOSE SEEKING MOTORCYCLE LOANS. THIS IS NOT INTENDED AS THE SOLE SOURCE OF INFORMATION FOR FINANCIAL DECISIONS. IF SPECIFIC ADVICE IS REQUIRED AROUND FINANCIAL DECISIONS, READERS SHOULD SEEK THEIR OWN FINANCIAL ADVISOR.
