Buying your first motorbike is exciting, and it is also the point where a lot of new riders make the order of operations backwards. They fall for a bike, then discover it is not on the approved list for their licence, or that the insurance quote doubles the monthly cost they had in mind. A little route planning saves a lot of backtracking.
Start with the licence, not the bike
In Australia, each state and territory runs its own learner and restricted motorcycle licensing scheme, and most use some form of approved-bike list based on engine size and power-to-weight. The details differ between jurisdictions and change from time to time, so check the current list with your state or territory road authority before you shop.
This matters for finance because it sets the pool of bikes you can actually ride. A learner-approved list tends to include smaller, lighter machines, many of which are modestly priced. That can mean a smaller loan, but it can also mean you outgrow the bike in a year or two and want to sell and upgrade. If so, think about how easily that particular model resells.
Count the gear first
New riders often assume the bike is the main cost. For a first bike, the gear is a bigger share of the total than most people expect. A helmet that carries the Australian standard marking, a proper jacket with armour, gloves, boots and wet-weather layers all add up. Our gear checklist has a tick-list you can adapt.
If you are thinking of rolling gear into a loan, ask whether the lender allows it and what that does to the total repaid. Stretching a loan over several years to pay for a helmet you will replace in five is worth a second look.
Insurance can move the goalposts
Insurers price on the rider as well as the bike. Age, licence history and where the bike is kept can all affect premiums, and first-time riders sometimes see higher quotes than they expect. Get a quote for the exact model and compare cover types before agreeing to any repayment. A repayment that looks fine on its own can feel tight once insurance and registration are added.
What lenders may ask
Every lender has its own criteria, so treat this as a general picture only. Lenders commonly want to understand income, existing commitments, residency and identification. If you have not borrowed before, a limited credit history is not unusual, and it is worth knowing you can request your own credit report for free from the credit reporting bodies. ASIC MoneySmart explains how credit reports work in plain language.
A few practical things tend to help smooth the process:
- Have your licence, ID and recent income documents handy.
- Know roughly how much you want to borrow and over what term.
- Avoid making several credit applications in a short time without a plan, since each enquiry can be recorded on your credit file.
Think about the term
A longer loan term lowers the repayment but generally means paying more interest overall. For a bike you might swap within a couple of years, a very long term can leave you owing more than the bike is worth when you want to sell. A term that roughly matches how long you expect to keep the bike is a reasonable starting point, though your circumstances are your own.
As an illustration only, borrowing $8,000 over three years at an example rate of 9% a year would work out to roughly $254 a month before fees. That example is not an offer. Actual rates, fees and the comparison rate vary by lender and circumstance, so always check the comparison rate on any quote.
A sensible order of operations
- Confirm your licence class and the approved list.
- Price the gear, insurance and registration.
- Set a total budget, including a buffer for the first service.
- Then look at finance, and compare quotes properly.
- Finally, choose the bike that fits the number rather than the other way around.
If you would like to see what finance might look like once you have a budget, you can start a free, no-obligation enquiry with our finance partner. We are not a lender, and this article is general information only, not personal advice. Think about your own situation and, if needed, speak to a licensed professional.
