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Motorcycle Loans Calculation

December 17th, 2008

2009 is approaching quickly and because of the costs of only a vehicle have become so expensive and the cost of fuel has been climbing up over the last months motorcycles are become a great option. However, you need to be financed for your motorcycle purchase if you don’t already have the cash.

One of the big problems with finding motorcycle loans online is that you just don’t know who to believe and which web sites you can trust. Because I have a web site providing information on motorcycle loans I’m aware of which web sites are trustworthy and which ones are not.

The first thing you need to ask yourself is what are the interest rates charged by lenders who provide loans for motorcycle purchasing. The interest rates do vary of course because of the prime rate, but motorcycle loans generally cost more when it comes to percentage points. Below is the current and standard interest rates charged for motorcycle loans at the time of this writing.

As you can see the interest rates are quite a bit higher than if you were to buy a car, and these rates come in two different categories; the 24-47 month term and the 47-72 month term

Current Interest Rates As Of Today’s Date

A lot will depend on how long the term of your motorcycle loan is, whether it is new or whether the motorcycle is used, and whether or not you buy your bike at a dealer (or non-dealer).

if you look at your interest charges on a motorcycle loan for a 72 month term and purchased from a non-dealer you will be paying 11% interest over the course of the year. So let us do some math now.

Let’s follow the following scenario shall we; you want to buy a brand-new Honda Gold Wing for the “low price” of $40,000 USD.

We’ll assume you want to take out a loan for a six-year term, and you want to pay biweekly (every two weeks). Using the table from above, and assuming that you are buying the motorcycle from someone who is not a dealer, you will be paying the highest interest rate possible for motorcycle loan – 11%.

The total amount you’ll have to pay for your brand-new Honda Gold Wing motorcycle is $53,284.52. You will have paid $13,284.52 in just interest. As you can see below your monthly payments will be $340.63. Of course you’ll be paying biweekly so every two weeks you will have to pay $170.32.

Total Amount to be payed: $53,284.52
Total amount of interest $13,284.52
Payments: 340.63 per month

So you can see the obvious advantage of being able to buy your motorcycle for cash, but let’s not be too hard on ourselves here because most people can’t afford to buy $40,000 items with cash.

Entry Filed under: Motorcycle Loans