Two products buy the same motorcycle. An unsecured loan pays money into your account, you buy the bike outright and it is yours from the first day. Motorbike finance is an agreement over the machine: the funder holds title, you cannot sell it before settlement, and the statutory rights that attach are the ones that come with a credit agreement. Which is right depends less on the rate than on how long you intend to keep it.
Loans for bikes are priced on you, finance is priced on the machine
An unsecured loan has no security, so the rate reflects your credit file and income alone. Hire purchase is secured on the bike, which usually makes it cheaper for the same applicant and easier to obtain on a weaker file. The trade is flexibility: the loan leaves the bike unencumbered and sellable at any time, while finance ties the two together until the balance is cleared.
Motorbike finance calculator estimates need four inputs
Any estimate of an instalment needs the amount financed after deposit, the term, the rate and, on a personal contract purchase, the optional final payment. Change any one and the figure moves without the deal changing. The only number that compares two offers is the total amount payable over the term, which every regulated quotation has to state.
125cc motorbike finance sits at the bottom of the market
At commuter-machine prices the fixed costs of writing an agreement are proportionally large and several funders have a minimum advance, so the choice narrows and the term shortens. A short unsecured loan is often cheaper in total at that size. Where finance is taken, check the age and mileage rules, which funders normally apply to the end of the agreement rather than the start.
What the statute gives you either way
On a regulated credit agreement you have fourteen days to withdraw from the credit and a right to settle early with a rebate of some future interest. On hire purchase and conditional sale you can also end the agreement once half the total amount payable is reached and hand the machine back. An unsecured personal loan carries the withdrawal and settlement rights but no hand-back, because there is nothing to hand back.
Questions people ask about motorbike loan
Are motorbike loans cheaper than hire purchase?
Usually not for the same applicant, because an unsecured loan carries no security and is priced accordingly. It is more flexible, and on a cheap bike the flexibility is often worth more than the rate.
Can I sell a bike that still has finance on it?
Not until it is settled, because the funder holds title. Ask for a settlement figure and sell with the funder paid on the day; a private buyer who buys in good faith is protected by the Hire Purchase Act 1964, which is why funders are careful here.
Does a bike need to be insured before the finance completes?
Yes. The machine has to be insured and taxed before it goes on the road, and a funder financing it will usually want to see that the cover is in place, sometimes including a minimum level.
Is a PCP available on a motorcycle?
Some manufacturers offer one, with an optional final payment set on a forecast value and a mileage limit. The forecast on a bike is less predictable than on a car, which is one reason fewer funders write it.