MORE BIKE FOR LESS
Affording a new bike has never been easier thanks to
While motorcycles have never been better value than they are right now, we’ve also never had more things fighting for our money. But PCP is about as close to a win:win situation you’ll ever get where motorcycles and bank balances are involved.
Personal Contract Purchase has gone from being a rare oddity in our world to taking 20-30% of the new bike finance market, and it’s growing fast. If we follow the trend of the car market, over 90% of financed new bike purchases could be by PCP in five years.
But it might not be right for you, so make sure you fully understand what it is and how it works. The figures look crazy for some makes and models – but it’s not as mad as it might seem.
You can have these new bikes for less than you might ever have imagined – and what’s more you can have another new one in three years’ time, probably without increasing your monthly outlay, or having to find a fresh deposit – the only catch is that the bike won’t be owned by you unless you make the final payment.
The system works by making you pay for the bike’s depreciation (plus the interest), rather than the full retail price. Add in a decent deposit, and you’re only paying back a small chunk of the loan value, which is how you end up with such a temptingly low monthly outlay.
So what’s the catch?
At the end of the contract period, you don’t own anything, and instead have a decision to make: do you pay off the outstanding amount and keep the bike; give the bike back and walk away owing – and owning – nothing; or do you roll your PCP deal over?
So what do you do next?
Most will use the equity in the GFV as a deposit, and roll onto a new PCP deal. But be aware that you might not have enough equity to do this, meaning you’ll need to find a new deposit.
What am I really paying for?
You’re effectively entering into a longterm hire agreement, so if you run the bike into the ground you’ll end up having to pay more than the agreed value at the end. But if you check the interest rate is competitive and research the future values of similar bikes, keep your bike serviced and in tip top condition, and you can’t go far wrong.