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Leasing or Buying a Motorcycle: Which is Right for You?

Leasing or Buying a Motorcycle: Which is Right for You?

If you’re in the market for a new motorcycle, deciding how to pay for it can be difficult. It’s important to consider your goals and lifestyle before leasing or buying a motorcycle.

Buying a motorcycle

If you plan to keep your bike for several years and would like to customize it, then buying may be the right option for you.

Advantages of buying a motorcycle

  • Full ownership – After paying off your motorcycle loan, you’ll no longer be responsible for monthly payments - just gas, insurance, license and registration fees, and repair and maintenance costs. Since the bike is yours, you can customize it or resell it as you wish.

  • No mileage fees – There will be no limit on the amount of miles traveled per year. That means more road trips with your new bike.

Disadvantages of buying a motorcycle

  • Higher upfront cost –You’ll be responsible for a down payment, license, registration and dealership fees, and taxes.

  • Higher monthly payments - When buying a motorcycle, you’re paying for the entire cost of the bike, which means higher payments per month.

  • Post-warranty repairs – Since most buyers keep their bike past its warranty expiration, you’ll have to pay for future repairs out-of-pocket.

Leasing a motorcycle
Leasing a motorcycle may be a smart choice if you plan to trade in your bike for a newer model after a couple years, need a lower monthly payment, or don’t regularly travel long distances.

Advantages of leasing a motorcycle

  • Lower upfront cost – Down payments are often waived by dealerships. The upfront costs you can expect to pay are your first month’s payment, license, registration and dealership fees, and taxes.

  • Lower monthly payment – When leasing a motorcycle, you’re only paying for the amount the bike depreciates during the time you have it. And lower payments may allow you to lease a more expensive motorcycle, depending on what you can afford. 

  • Upgrade to a new model every few years – Leasing a motorcycle gives you the option to trade in your bike at the end of your lease term for a newer model.

  • Fewer bike repairs to pay out-of-pocket – Since most bike warranties last about the same length as your lease term, major repairs may be covered. You’ll still have to pay for maintenance costs and repairs that are not covered under your warranty.

Disadvantages of leasing a motorcycle

  • Less flexibility– If you need to get out of your lease early, be prepared to pay a large penalty fee. If you plan on a major life change like getting married, having children, or relocating, then the lack of flexibility offered with leasing may not be a smart choice for you.

  • Fees – If you enjoy road trips on your bike, you’ll have to be mindful of your mileage. Leases often have a 15,000 mile per year limit and charge a fee if you exceed it. You also may have to pay for excessive wear and tear on your bike when your lease expires.

  • No ownership – With a lease, you don’t have full ownership of the motorcycle. You cannot resell it or make customizations.

  • Extra insurance coverage – Often you’re required to buy gap coverage when you lease. If your bike is stolen or totaled in an accident, gap coverage helps pay the difference between your bike’s actual value and the remaining balance on your lease.

  • Higher purchase cost - Most lease terms give you two options upon expiration: turn the bike in or buy it. Buying a motorcycle at lease end may not be the best option. To recoup losses on the low monthly lease payments you had, your leasing company may inflate the bike’s buy-out price.

Whether you decide leasing or buying a motorcycle is right for you, be sure to keep your new bike protected with motorcycle insurance. It’s possible to find affordable motorcycle insurance rates that fit your budget. When choosing an insurance company, be sure they offer coverage for your specific bike and any custom equipment you may have.

Resources: Smart Money;

Photo courtesy Harley-Davidson - Superlow Sportster