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Can I use my car as collateral to buy a motorcycle?
I want to buy a Harley, but I need a loan for it. I also noticed that motorcycle loan rates are higher than car loan rates. Since I own my car outright, can I use it as collateral to buy a motorcycle?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
If you want to buy a motorcycle but want to get a better rate on a loan, you can take out a
car loan
to use your car as collateral. As long as your car has less than 100,000 miles and less than 10-years-old, your lender should allow you to take out a loan to buy a motorcycle. Just remember that if you default on your loan, the bank will take possession of your car.
Keep in mind that because the car acts as collateral, you’re going to have to get full coverage auto insurance until you pay the loan off. However, you can save money with a multi-vehicle discount, so make sure to inquire about it while you’re shopping around for insurance.
To get the best rates on your full coverage insurance, shop around with
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