From the cool to the weird, 2016 has seen motorcycles done up in shiny chrome and custom. Not pre-empting what 2017 has to offer in the motorbike scene, buying your own set of two wheels is certainly exciting. But before you get all pumped up, understand the costs of ownership first so you can be better prepared for the future with your motorcycle.
Financing a Motorcycle
Getting a loan on a motorbike saves you the trouble of coming up with cash for the purchase price. But beyond that, you have to know of the attendant expense when you finance one.
- Rate. This is what the lender charges on the money you borrowed. Interest rates vary among lenders but depend on your credit, the loaned amount, and the length of the loan. A down payment still matters to motorcycle loans but not as much as on mortgages or car loans.
- Fees. They go hand in hand with rates. That is, when you shop for rates, look into fees as well. Common purchase-related fees include registration and title fees, title transfer fees, and sales taxes.
- Collateral. The loan can cost you your motorcycle if you fail to meet your obligations. This is applicable to secured loans where lenders require an asset to secure repayment of the loan.
- Prepayment penalty. You can be fined by your lender if you pay off your loan early, e.g. when you refinance or sell the motorbike. Check with your lender first before you make extra payments on your loan.
- Other costs. Examine what is included in your loan that would add to its costs. Does it include an extended warranty, which covers the cost of repairs in the event of a mechanical breakdown?
Insuring a Motorcycle
While you need the proper gear to ensure your safety when driving, your motorcycle needs to be insured to ensure that you, your passengers or any third party will be protected in the event of collision or accidents.
As to how much insurance you have to carry, consider the minimum requirements of your state, the type of your motorcycle, and the condition of your finances.
Maintaining a Motorcycle
Responsible ownership requires you to keep your motorcycle well-maintained and safe to ride on. This means routine maintenance checks, which can be a do-it-yourself thing or have a professional do it for you. Needless to say, the latter option comes at an extra cost.
More importantly, you need to prepare for contingencies such as mechanical breakdowns or major repairs. What if your motorcycle loan does not include an extended warranty because it’s too expensive to purchase one? Against this backdrop, repairs, no matter how minor, would have to be paid out of your own pocket.
From here, you have a good idea on what motorcycle ownership requires of you. For more valuable insights regarding motorcycle loans, click here.»