Can I Lease a Motorbike Under Finance?

Leasing a motorbike under finance is an increasingly popular option for Australians looking to ride a new or used bike without the long-term commitment of ownership. Leasing allows you to enjoy the use of a motorbike for a set period while making manageable monthly payments. However, there are some key factors to consider before deciding whether leasing is the right option for you. Let’s explore how motorbike leasing works in Australia, its benefits, and the factors you need to consider.

1. How Does Motorbike Leasing Work?

Leasing a motorbike works similarly to renting it long-term. You enter into a lease agreement with a lender or dealership, where you agree to make regular monthly payments for the duration of the lease. Typically, leases for motorbikes last between one and five years. At the end of the lease term, you usually have the option to return the motorbike, buy it outright at a pre-agreed price, or possibly extend the lease.

The monthly payments on a motorbike lease are typically lower than what you would pay on a loan because you are only paying for the depreciation of the bike during the lease period, not the full purchase price. This makes leasing a more affordable option for those who prefer lower repayments.

2. Benefits of Leasing a Motorbike

Leasing a motorbike under finance offers several advantages, making it an attractive option for some buyers.

• Lower Monthly Payments: Leasing usually comes with lower monthly payments compared to traditional financing. Because you are only financing the bike’s depreciation, rather than the full purchase price, the repayments are generally more manageable.
• Access to Newer Models: Leasing allows you to access the latest motorbike models without the hefty upfront cost of buying one. This is perfect for riders who prefer riding the latest bikes but don’t want to pay full price.
• No Long-Term Commitment: Once your lease term ends, you can simply return the bike and walk away, or lease a new model. This flexibility makes leasing ideal for people who want to change their bike frequently.
• Maintenance and Warranty: Many leasing contracts include maintenance packages, which can cover service costs and repairs. This means you can keep your motorbike in top condition without worrying about unexpected expenses.

3. Factors to Consider

While leasing can offer several benefits, there are also a few important considerations to take into account:

• Ownership: At the end of the lease term, you won’t own the motorbike unless you choose to buy it. If owning a bike is important to you, leasing may not be the best option. You will always have to return the motorbike unless you exercise the option to purchase it.
• Kilometre Limits: Many motorbike leases come with kilometre limits, meaning you may face additional charges if you exceed the agreed-upon distance. This is something to keep in mind if you plan on using the motorbike extensively.
• Early Termination Fees: If you decide to end the lease early, you may face significant fees, which can make it an expensive option if your circumstances change and you need to return the bike before the lease term ends.
• Condition of the Bike: Lease agreements typically require the motorbike to be returned in good condition. If the bike has excessive wear and tear or damage, you may be charged extra fees for repairs or depreciation.
• Insurance and Other Costs: Most leasing contracts require comprehensive insurance to protect the lender’s asset. This can be an additional ongoing cost that you will need to factor into your budget. Additionally, some lease agreements may require you to cover registration and other fees.

4. Eligibility for Motorbike Leasing

The eligibility criteria for motorbike leasing in Australia can vary depending on the lender or dealership. Generally, you will need to meet certain requirements, such as:

• Stable Income: Lenders will want to ensure that you have the financial ability to make regular payments, so a stable income is usually required.
• Good Credit History: While leasing options can be more accessible than loans, most lenders still require a decent credit score to approve the lease agreement. If you have a poor credit score, it may be more difficult to qualify for a lease.
• Identification and Proof of Address: You will need to provide proof of identity (e.g., driver’s license or passport) and proof of address (e.g., utility bill or lease agreement).

5. Leasing vs. Buying a Motorbike

When deciding between leasing or buying a motorbike, there are a few key differences to keep in mind. Leasing offers lower monthly payments and more flexibility, but it doesn’t build equity in the motorbike. Buying a bike, on the other hand, means you own the vehicle outright once the loan is paid off, but you’ll have higher monthly payments and a larger upfront cost.

For some, leasing is the ideal solution, especially if they want to ride a new bike every few years and enjoy lower monthly costs. For others, buying may be the better long-term option, especially if they plan to keep the motorbike for many years and eventually own it.

Conclusion

Leasing a motorbike under finance in Australia can be an affordable and flexible option for riders who prefer lower monthly payments and access to newer models. However, it’s important to weigh the pros and cons, including the fact that you won’t own the bike at the end of the lease, and that there may be restrictions on kilometre limits and fees for early termination. By carefully considering your needs, financial situation, and how long you intend to keep the motorbike, you can make an informed decision about whether leasing or purchasing is the best option for you.

DISCLAIMER

The information provided on this website is general in nature only and has been prepared without considering your financial needs, circumstances and objectives and should NOT be construed as financial, taxation or legal advice. For more information, get in touch with our experienced partner brokers today.