125cc On Finance

Financing a 125cc motorcycle can be a practical option, especially for new riders or those on a budget. These bikes are popular for commuting and learning to ride, and spreading the cost can make them more accessible.

Finance Options

Several finance options are available. Personal Contract Purchase (PCP) is a common choice. It involves paying a deposit, followed by monthly payments, and then having the option to buy the bike outright at the end of the term with a final “balloon payment,” return it, or trade it in for a new model. PCP often results in lower monthly payments compared to other financing methods, as you’re only paying for the depreciation of the bike during the contract. However, mileage limits usually apply, and exceeding them can lead to extra charges.

Hire Purchase (HP) is another option. With HP, you pay a deposit and then make monthly payments that cover the cost of the bike plus interest. Once you’ve made all the payments, you own the motorcycle outright. This option typically involves higher monthly payments than PCP, but you don’t have to worry about mileage limits or a final balloon payment. HP is a straightforward way to become the owner of the bike.

Personal loans from banks or credit unions are also viable. These loans provide a lump sum that you can use to purchase the motorcycle. You then repay the loan in fixed monthly installments over a set period. The interest rate on a personal loan can vary depending on your credit score and the lender. It’s a good idea to shop around and compare rates before committing to a loan.

Things to Consider

Before taking out finance, carefully consider your budget and ability to make the repayments. Factor in not only the monthly finance payments, but also the costs of insurance, road tax, gear, maintenance, and fuel. Get quotes for insurance before committing to a bike, as these can vary significantly depending on your age, experience, and location.

Your credit score will impact the interest rate you receive. A higher credit score generally results in a lower interest rate, making the finance more affordable. Check your credit score before applying for finance to get an idea of what rates you might be offered.

Compare deals from different lenders, including dealerships and banks, to find the most favorable terms. Pay attention to the Annual Percentage Rate (APR), which includes all the costs of the finance, including interest and fees, and allows you to compare different options accurately. Read the small print carefully to understand all the terms and conditions of the finance agreement, including any potential fees or charges.

Financing a 125cc motorcycle can be a smart move, but thorough research and careful budgeting are essential to make sure it’s the right choice for you.