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Hitting the open road on a Harley-Davidson motorcycle is a coveted experience for both novice and experienced riders. Throughout the United States, an estimated 32 percent of adults age 18 to 29 own a motorcycle, and 38 percent of those between 30 and 49, according to Statista. While having a motorcycle is a common hobby, getting the right financing is not always cut and dry.
The most notable motorcycle manufacturer, Harley-Davidson, has an extensive history of offering a varying selection of standard and custom bikes to riders, while also providing financing solutions to those who qualify.
However, Harley-Davidson dealer financing is not always the best fit, so motorcycle enthusiasts consider their options before selecting dealership financing for their next motorcycle purchase.
Secured vs. Unsecured Loans for Motorcycles
Most motorcycle riders have two broad options for financing their next bike purchase: a secured or unsecured motorcycle loan. With a secured loan, individuals may qualify for a big enough loan to purchase a new or used motorcycle. This is because instead of leaning on personal creditworthiness for approval, secured motorcycle loans require some sort of leverage.
This leverage may be equity in a home, the bike itself, or another form of collateral like a savings or money market account. Because there is less risk to the lender with collateral involved in a financing agreement, the total cost of the secured loan may be lower than other options.
Motorcycle riders may also have an option through an unsecured loan. With this type of financing, bike owners use their personal credit history and score to qualify through a lender or dealership financing option.
Because there is no collateral involved, an unsecured loan may cost more than a secured loan. However, an unsecured loan available through a lender outside of the dealership or manufacturer may be more cost-effective than going directly through Harley-Davidson for financing.
LightStream motorcycle loan
4.29% – 11.89%* with AutoPay
$5,000 – $100,000
Minimum Credit Score
LightStream is a division of SunTrust Bank and is our top-rated partner lender offering online personal loans and auto loans. The LightStream motorcycle loan comes with an AutoPay discount of 0.50% that is only available prior to loan funding. If approved, you get to choose your fund date, which can be as soon as the same day.
- Interest rate: Fixed
- Fees: None
- Repayment terms: 24 – 84 months*
- Benefit: Rate Beat Program available
To compare other options, check out our guide to the best motorcycle loans.
Other Methods for Financing a Motorcycle
One of the reasons many riders opt to finance their new bike purchase directly through the dealer revolves around the ease of the process. Riders simply select the bike they want and then work with the finance department at a participating dealership to get financing. However, better options can be found elsewhere, particularly for bikers with a strong credit history and stable income.
In some cases, financing through the dealership means paying a higher cost overall by way of the interest rate, while also having a shorter repayment term for the loan. Going outside the dealership to find a motorcycle loan often makes the most financial sense because bikers can compare interest rates, other fees, and repayment terms that best fit their budget.
For those bikers who are also homeowners, home equity loans or lines of credit may be a good source for financing the purchase of a bike. Interest rates may be on the low side for those with strong credit, but the home, not the bike, is used as collateral against the loan. Additionally, getting a new home equity loan or line of credit often requires an appraisal of the property, as well as closing costs that can significantly increase the cost of borrowing over time.
Bikers may also look to a personal loan or use a credit card for a motorcycle purchase. A personal loan still requires a solid financial track record, high credit score, and verifiable income to qualify, but it may offer a lower interest rate than other financing options. A credit card should only be used as a last-ditch effort for financing a motorcycle purchase, as interest rates are typically in the double-digit range.
Deciding How to Finance Your Harley-Davidson Motorcycle
Because there are many different options for financing a motorcycle purchase, it is beneficial for bikers to understand the process of selecting the best-fit solution. The smartest first step is to evaluate what the dealership has to offer for financing, including a review of the repayment term, monthly payment, interest rate, and any fees involved in getting the motorcycle loan.
Once that information is gathered, bikers should comparison shop by getting offers from other financing providers, including lenders like LightStream, banks, or credit unions. Each financing offer should clearly spell out the terms of the loan and total cost so it can be easily compared to dealership financing.
Determining how to finance a motorcycle purchase from Harley-Davidson boils down to the cost associated with taking out a new loan. Be sure to compare all the specifics of each financing offer before signing on the dotted line. Taking the time to compare secured and unsecured loans, dealership financing, and outside financing solutions is necessary for ensuring a Harley purchase is enjoyable for the immediate and long-term.
*Payment example: Monthly payments for a $10,000 loan at 9.34% APR with a term of 3 years would result in 36 monthly payments of $319.58. LightStream disclosures here.
Author: Melissa Horton