What Credit Score is Needed to Buy a Motorcycle?

Buying a motorcycle is a significant life decision. It takes a certain mindset to ride a two-wheeled, open-air vehicle that can accelerate past one hundred miles per hour. Some people fear that sensation. Many embrace it and fall in love with the open road. Another group, which is increasing in size, is opting for motorcycles because of rising gas prices.

The average price of a new motorcycle is $5,000 to $10,000. That’s not a small change, but it’s more reasonable than the average price of a new car, which topped $46,000 at the beginning of 2022. That suggests that getting a motorcycle loan might be easier than getting approved for a car loan. Unfortunately, the approval criteria for the two loans are not the same.

Credit Score Requirements: Auto Loans Versus Motorcycle Loans

There are several scoring models that lenders and dealers use when determining eligibility for vehicle financing. FICO Score 8 is the standard model, but FICO also has an Auto Score. Based on the former, buyers need a minimum score of 600 to buy a car with no down payment. Auto loans are available from banks, dealers, and online lenders.

Traditional lending institutions like banks and credit unions offer auto loans as a specific product. Motorcycle loans are typically personal loans, and there are several different types of personal loans. The minimum score required for an unsecured personal loan from the bank is typically 610-640. Lower-interest loans have a credit score requirement of at least 690.

Why the disparity? An auto loan is a secured loan where the vehicle is the collateral. A personal loan is unsecured. Some motorcycle dealers will offer financing that resembles an auto loan by making the bike the security. Traditional banks and online lenders do it differently. They don’t have loans that are specific to motorcycles. Instead, they offer personal loans.

Advantages of Personal Loans For Motorcycle Purchases

None of the credit score “requirements” listed above are etched in stone. Buyers with bad credit can still find motorcycle loans online. Dealerships will also lower their standards if the buyer puts up a significant down payment and is willing to pay a higher interest rate. That’s one way to go, but the personal loan route offers more advantages.

A personal loan does not come with spending stipulations. Once approved, the borrower can spend the money required for the motorcycle and use the rest for whatever else they need, like a leather jacket and helmet. Dealer financing only covers the vehicle, so additional purchases must come out of pocket, which can get expensive.

Another advantage of a personal loan is that it’s unsecured, meaning the motorcycle won’t get repossessed if the buyer defaults on the loan payments. There are still consequences, though. Defaults show up on a credit report, lowering the borrower’s credit score, and the lender can initiate collection or even legal actions for non-payment.

The Bottom Line

Higher credit scores equal more buying options, but low credit scores do not eliminate the possibility of buying a motorcycle. Motorcycle buyers with lower credit scores may need a larger down payment. Interest rates could also be higher, and dealer financing may not be available. Personal loans are always an option, even with lower credit, but rates and terms are better with a higher credit score.

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