Buying A Bike Using Hire Purchase
When you choose to buy a motorbike, you have several options for how you plan to pay for it. One such option is using hire purchase to buy your bike, this is a way to pay a deposit up front and then pay off the rest of the balance and interest in equal monthly instalments.
As the new registered keeper of the motorbike, you are responsible or the insurance and maintenance of the vehicle, and you are also in charge of servicing the bike, too. It's important to know that while you are the registered keeper, the legal owner of the bike is the finance company from whom you borrowed, which means that you cannot sell the bike on without permission.
Plenty of dealers will run promotions on hire purchase agreements, so if you are looking to save some cash, this could be an option. Some of these options include getting help with the deposit or receiving 0% APR deals for a set period. Do your research, though, and shop around between the dealers so that you know who is offering the best. Compare APRs and the total costs of the loans, and you can get a good deal on a new bike. Some dealers offer a slightly different arrangement, called Conditional Sale.
- You get the option to buy out the remainder of the contract any time you wish.
- The deposit size can be flexible.
- You get some protection if the bike runs into issues.
- The payments per month are usually higher due to the higher APRs.
- You will run into penalties if you leave the contract early.
- Missed payments can mean repossession of the motorbike.
- You cannot sell your bike before the final payment.