With personal income tax cuts now in effect, many Australians are enjoying a little extra in their pay packet. That little extra may have motorbike enthusiasts considering the purchase of a new ride with finance. That additional income could mean the difference between a top-of the-range Harley and a small Husqvarna. Being able to include those aspirational accessories or having to leave them on the wish list. Riding out of a showroom on a brand-new model or hunting around for a used motorbike.
But before rushing off to the showroom, it may be wise to consider your options. Jade Bike Loans provides tips and intel on optimising motorbike loans using tax cuts on new motorbike loans and for current borrowers.
Using Tax Cuts to Upgrade Motorbike Purchase
Motorbike enthusiasts typically aspire to a better, bigger, newer machine. With a bit more coming in each week, that may be a distinct possibility when considering finance to purchase a motorbike. Benefits may be realised with new motorbike loans compared with used motorbike finance. There are differences in loan offers between new and used, which can be smart to be across when making buying decisions.
A Secured Motorcycle Loan will be the finance type for most new motorbike buyers, and those buying quality used models. The machine must be accepted as suitable security for approval for this loan. When lenders consider the features and condition of a used model and the value of the machine compared with the purchase price and loan requested, their decision can impact loan collateral requirements and loan amounts approved. If the full amount requested for a used bike loan is not approved, buyers may need to find a larger deposit.
Interest rates can be different for new and used motorbike loans and a higher rate can mean higher repayments. But the price of the machine and the loan amount required also affects the repayments. Rates are offered on an individual basis. Buyers can contact us for quotes on different models prior to purchase, to assist with buying decisions.
Using Tax Cuts to Pay Down Current Motorbike Loans
If planning a new purchase with finance but you already have a bike under finance, it can pay to pay it down. Most loans allow for extra amounts to be made as well as the monthly repayments. This finalises the loan sooner than the fixed term and will attract a minimal early payout lender charge.
But the benefits can come with less total interest payable, more collateral built up on the asset, and a general improvement in the assets:liabilities balance sheet position. This can be important when applying for a new loan.
Using Tax Cuts to Improve Balance Sheets and Credit Scores
Lenders take a close look at the credit score and the financial position – balance sheet, when assessing loan applications. The less outstanding on existing loans and credit cards, the better the balance sheet and, potentially, the better the new loan offer.
Extra income from tax cuts may be used to pay down or finalise current commitments including loans and credit cards, before applying for that new motorbike loan. This can improve the credit score and result in a lower interest rate and can improve the balance sheet and result in a higher loan limit being approved. A higher limit which may mean, yes, a better motorbike or including those accessories in the finance.
Reviewing personal credit scores and profiles using information at Moneysmart may guide individuals as to how to achieve their best position.
Using Tax Cuts to Increase Downpayment, Reduce Loan Required
The less you need to borrow to buy a new motorcycle, the less required in monthly repayments. That is the general rule. So having a larger amount to put down as a deposit on a new bike may result in a more workable finance outcome.
In the lead-up to buying a new motorbike, buyers may opt to save their extra income to accrue a larger deposit.
Using Finance Tools and Services
There are many considerations and important decisions when buying a motorbike with finance. We support buyers with a range of finance tools and expert services to source the most competitive rates and affordable motorbike finance.
Our Motorbike Finance Calculator is an essential in every buyer’s tool kit. This handy device allows buyers to quickly calculate their own motorbike loan estimates. Allowing quick comparisons of bikes at different prices. Seeing how that larger deposit may reduce the monthly commitment.
An important aspect to remember when using this loan tool is that interest rates may change in the time between calculating estimates and applying for a motorbike loan. Consumer credit providers can change their interest rates on loans when the Reserve Bank of Australia makes rate changes. This may or may not occur in the time period but should be kept in mind. Also remember that loan interest rates are offered based on individual credit and application assessments.
Buyers can use our services to assist with their motorbike loan. We can provide quick quotes without impacting credit scores, arrange pre-approved motorbike loans ahead of purchase, and handle the entire loan process for buyers.
For more information and assistance on sourcing motorbike finance, contact us and speak with one of our brokers.
Speak with Jade Bike Loans on 1300 000 003 to discuss securing a better motorbike loan using extra income from tax cuts.
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.
