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Are motorcycle loans the same as car loans?
I want to buy a motorcycle with a loan, but I've only had a car loan in the past. Do they work the same? What are the differences and similarities?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Motorcycle loans are similar to
car loans
in many ways. Like a car loan, the motorcycle acts as collateral for the loan. If you fail to pay your loan, the lender repossesses the bike. Motorcycle loans are also similar in these ways:- It’s an installment loan.
- You have a set interest rate.
- It’s available for both new and used bikes.
However, there are some more subtle differences. Interest rates are often a few percentage points higher than car loans because lenders view motorcycles as a less liquid asset. That is to say: more people would readily buy a car than a motorcycle. Moreover, motorcycles have different classifications and more specific categories. Each of these also comes with different interest rates based on their perceived liquidity.
One thing that stays the same between motorcycle and car loans is needing insurance. The good news is that
motorcycle insurance
is typically cheaper than car insurance. That means added savings, especially if you shop with Jerry
.Use the Jerry app to compare rates from 50+ top insurance providers to get the best rate possible and cruise the country in style.
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- Gregory R.
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