On the surface, being able to get a low or even zero-interest loan for a motorcycle might sound appealing. However, there are a few things that buyers must pay attention to before taking on any finance.
Low-interest rate loans used by dealerships are a good way to get buyers in the door – but if you’re not careful, you may end up overpaying in the long term. Here are three things to consider before taking on dealership motorbike finance.
Price negotiation
When opting for a low dealer finance it’s essential to understand that the advertised interest rate might come with strings attached. One common drawback is the lack of room to negotiate the motorbike’s price. Dealerships offering 0% financing often compensate for the interest they’re not charging by keeping the bike price fixed at the full retail price.
By forgoing the cheap finance option, buyers may open up the ability to negotiate which could result in significant savings. With a bit of bargaining, they could potentially secure a lower purchase price, reducing the total amount paid for the motorbike over time.
Trade-ins
On top of the purchase price, opting for cheap financing can also impact the terms of any trade-in transactions. Dealerships may offer lower trade-in values for vehicles when customers choose to use their cheap financing.
At the same time, the structure of the loan agreement may be less favourable, with less flexibility in terms such as balloon payments and repayment schedules. Some dealerships may entice customers with guaranteed future trade-in prices for their next vehicle purchase.
While this might seem like a convenient option, it often comes with upfront costs and restrictions that could offset any potential benefits. Buyers should carefully consider the trade-in offer and determine whether the guaranteed price is worth the potential drawbacks.
Research and preparation
Before heading to the dealership, buyers should invest time in understanding the market value of both their current vehicle and the new motorcycle they intend to purchase. Armed with this knowledge, buyers can enter negotiations with confidence, knowing what constitutes a fair price for the vehicle.
Additionally, it’s advisable to talk to your finance broker before you start the search or commit to any type of finance. This will let you compare your options and understand what your buying power looks like based on your personal financial circumstances.
