Recently, many motorbike and car companies have been offering low interest or 0% interest rates on new vehicles and at face value looks like a great deal.
But is it?
Some manufacturers offer these deals, but be warned; you may well end up paying more for your new motorcycle than if you had shopped around and (maybe even) financed your new bike through Aussie Bike Loans.
If dealers aren’t charging interest on their finance offers, they’ll have to make up the difference in other ways! There are many ways they can do this that those in the market for a new bike need to be aware of:
Let’s look at price first. If you walk in to the showroom and ask for the 0% finance deal, the price is often then not negotiable – you’re going to be paying full retail. You can almost certainly negotiate a better price with the dealer if you’re not asking for the 0% finance option.
Is it a Trade-In?
The second point refers to trade-ins. If you plan on trading in your old vehicle, you’re likely to be offered a lower price. Plus the structure of the loan is also likely to be less flexible in regards to the terms of the deal, balloon payments and so forth.
Another option offered by some dealerships is a guaranteed price for a future trade-in, against your next new bike. From a psychological (and sales) point of view, this is the same as locking you in to buying your next motorbike from them as well – very clever!
Again, the problem is that the cost of offering this guaranteed buyback price is generally an upfront loading to the cost of the motorcycle. And often these deals come with restrictions that may preclude you from taking up the offer anyway when it comes time to upgrade.
Do your research
It’s important that you have done your homework on bike values before you go into the dealership. You need to have a clear idea of the value of your current vehicle if trading it in, as well as the price you should be paying for your new bike. Half an hour researching prices on a few of the online bike classifieds sites will pay dividends here – Bike Point.com.au and Bike Sales.com.au are the major websites in Australia but there are plenty of options out there available.
Also shop around and get some bike loan quotes from a finance broker (like us) before going into the showroom (you can also get pre-approval). At least if you do decide to take the 0% finance option, you will have done so having taken all factors into account.