There’s nothing more exhilarating for bike enthusiasts than buying their first motorcycles. Whether it is to commute locally amid traffic or set out on an off-road adventure, owning a motorcycle offers various benefits. But it’s also a significant financial decision, and buying a motorcycle without a down payment can cause a financial crunch if one isn’t careful. Strategizing and having a solid plan can help one purchase a motorcycle without requiring a hefty down payment.
1. Go for zero-down-payment loans
Securing an auto loan to buy a motorcycle isn’t a challenge. In fact, the most important task is to find a lender who provides loans without demanding a down payment. But if one persists, it’s possible to find lenders who strike such deals. While these auto dealers or lending institutions may have branches in different cities, looking for local lenders who offer zero-down-payment auto loans can also be lucrative. Many non-profit credit unions approve loan requests more easily than regular banks. The terms of such loans are also flexible and help meet the financial limitations of the users.
But while doing so, one should remember to consider other aspects, such as brands covered, tenure flexibility, and financial plans. It’s also important to calculate the total amount to be spent on the motorcycle (including overhead expenses), because without such information, finding a lender and settling the loan amount will be a challenge. So, one should establish a budget for the motorcycle before looking for zero-down-payment auto loans.
2. Pay using credit card
Credit cards have several benefits for consumers, including the flexibility to pay an amount at a later date before the deadline passes. Also, many dealers accept credit cards as a mode of down payment. In other words, when one buys a motorcycle using their credit card, the amount doesn’t get debited from their account, but it gets credited to the dealer’s account immediately. This way, it becomes a win-win situation for buyers and sellers. Also, credit cards have flexible EMI options, through which one can pay off the amount in installments over a period of time. There is often an additional fee charged for credit card payments, but it’s still better than paying a large amount as a down payment when making a purchase.
3. Save money by making a financial plan
One of the most basic yet highly effective ways to buy a motorcycle without a down payment is to save money with the specific financial objective of buying a motorcycle. To this end, one should research well on the brand and model of motorcycle they would like to buy and its total cost (including overhead expenses and maintenance). Based on this evaluation, one should create a financial plan that can help save up systematically until the entire amount has been saved. But this process may be slow, so one should go for it only if they are willing to wait for a few months or even years before buying a motorcycle.
4. Opt for a less expensive motorcycle
A budget-friendly motorcycle can help one avoid making a hefty down payment. For this, one should evaluate the features they absolutely require in their motorcycle and the ones that are mere add-ons, not likely to be used frequently. This is because such additional features only add to the total cost of the motorcycle. Another way to save money on buying a motorcycle is to go for a second-hand or used bike. This way, even if one has to make a down payment on the vehicle, it is still a smaller amount.
5. Look for a loan with a higher EMI amount
If one opts for a loan with a high EMI amount, it is likely that they won’t have to make a down payment. But in general, zero-down-payment loans have high interest rates. So, one should account for such additional expenses before opting for an auto loan with a higher EMI.
6. Boost credit score
The best way to ensure that one’s zero-down-payment loan is approved easily is to improve one’s credit score. Paying credit card bills on time, having a low credit utilization score, and not doing away with old credit cards are some strategies to boost credit score and pass one’s zero-down-payment loan easily. But for those who require an auto loan without a down payment and cannot implement these strategies, it’s best to look for banks and other financial institutions that offer options with lower credit score requirements. Roping in a co-signer or co-borrower with a good credit report may also help with loan approval.
7. Take a personal loan
To avoid down payments on auto loans, one can ask their bank for a personal loan that covers the motorcycle’s total amount. One could borrow an amount marginally higher than the aggregate cost of the motorcycle and use the residual amount for other purposes. But remember that personal loans are more expensive than credit card payments in the long run. So, if possible, opt for credit card payments over personal loans.
