Riding a brand new motorcycle is likely the preference for many riders. But in many instances, purchasing a brand new machine is not a cost-effective or practical option. However, recent issues around the shortage of computer chips, pandemic-related issues and other supply chain problems have delayed the arrival in Australia of many manufactured goods including motorbikes. Issues which increase the interest in the used motorbike market. For riders considering buying machine there are cost-effective used motorbike loans available with some variations from loans for brand new bikes.
Second-hand motorcycles may come under a number of categories – collector machines, classic models that are no longer available, vintage models, limited edition versions or just motorcycles that are a few years old. Whatever the category you are considering, Jade Bike Loans can assist with sourcing finance. We cover off on some of the issues to take into consideration when buying a second-hand motorbike with finance.
Value Compared with Price
A key issue to look closely at is the selling price of the bike compared with the value. Increased demand for second-hand goods including cars and bikes has soared due to limited supply of new machines for some brands. The stock issues are the result of factories still getting back to normal production after COVID-19 shutdowns and the computer chip shortage which has left a gap in supply of some new models.
With new models unavailable, more buyers can be drawn into the used market. As the law of demand and supply goes, this can have the effect of driving prices up. It has been a major issue in the motor vehicle market,
While keen riders may be quite happy to pay the selling price, if seeking finance for the purchase, there are issues to be aware of. First in regard to the loan amount and the value of the bike. If say the buyer is seeking a no deposit bike loan and the lender does not consider the loan amount is in line with the value. In this example the lender might request the loan applicant reduce the total amount. To reduce the loan amount the borrower would need to pay a deposit.
When buying goods with finance, borrowers are required to take out insurance on the goods. The price, loan amount and value are taken into account with when a policy quote is prepared.
Used Bike Loans
For buyers of second-hand bikes, Jade Bike Loans offers two types of motorcycle loans:
The Secured loan is the most popular for new bike purchases. With this type of loan the motorcycle is accepted as the guarantee or security against the loan. It is straightforward. With used bikes, the interest rate on a Secured Bike Loan may be higher than that for a brand new machine. Lenders may also have variations in the total amount of the loan as mentioned above.
The interest rates shown by most lenders in promos and ads will usually be for brand new goods which eludes to used goods attracting a higher interest rate. The advertised rates will also typically apply to applicants with a good credit score.
While the difference between the interest rates for new and used goods is a matter for the lender, the credit profile is a matter for the applicant. A better credit score will normally attract a better interest rate for loans.
Keeping payments on schedule and reducing debts such as credit card balances can improve credit ratings.
But with second-hand bikes, the condition and the age of the machine is taken into consideration by lenders when preparing a bike loan offer. If the used motorcycle is not considered acceptable as security by the lender, that is when an unsecured loan can be considered.
Unsecured Personal Loans can be extremely suitable for the purchase of used motorcycles. This type of loan does have some key differences from a Secured Bike Loan.
As there is no security in the goods being acquired, lenders may ask for some other form of asset to be put up as guarantee or a personal guarantee provided. The interest rate is typically higher than for secured loans. But additional payments are permitted with no break fees applicable if the loan is completed prior to the end of the term.
With both types of loans, your Jade Bike Loans consultant will be seeking you the cheapest bike loan offer from across our vast selection of banks and non-bank lenders.
Buyer Warnings
Used motorcycles can be great machines and offer great value for many buyers. But following the February –March floods in NSW and Queensland, buyers of cars and similar goods are being warned of flood-affected goods getting onto the second hand market.
While the focus of these alerts from the likes of the Queensland Transport Department and other authorities has been for cars, it would not be unexpected to find motorcycles in a similar situation.
If buying from a private seller or from a dealer, always ask for an inspection certificate from a reputable organisation or get your own bike mechanic to put the bike over the pits for a full check.
When buying second hand, buyers should also check the PPSR to ensure no money is still owed on the bike. When using Jade Bike Loans to source your finance, these are just a few of the issues that your consultant will discuss and assist you with.
For a quote on a used motorbike loan contact Jade Bike Loans at 1300 000 003
DISCLAIMER: IN REGARD TO ANY ERRORS OR MISREPRESENTATIONS IN THIS MATERIAL, NO LIABILITY IS ACCEPTED. THE DETAILS, CONTENT AND DATA ARE 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.