Before you head to the dealership to purchase your dream motorcycle, you need to make sure you have everything in order. While financing options may allow you to ride off the lot sooner, you still need to meet the necessary licensing requirements to legally operate your new bike. Obtaining a motorcycle license or endorsement shows you have the proper training and skill to ride safely. It also allows you to get insurance, which most financing companies require.
Even if you’ve been riding for years, licensing regulations vary in each state. Do your research to determine what is needed in your area. At a minimum, you’ll need a regular driver’s license and may need to pass a written knowledge test and an on-cycle skills test. Some states require completion of a motorcycle safety course. While it may seem like an inconvenience, licensing and education help reduce the risk of accident or injury. Proper preparation will ensure you have many miles of safe, enjoyable riding ahead.
Do You Need a Motorcycle License to Buy a Motorcycle?
To purchase a motorcycle, you are typically not required to have a motorcycle license or endorsement in most states. However, to legally operate a motorcycle on public roads, you will need a valid driver’s license with a motorcycle endorsement or license. Some dealers may allow you to buy a motorcycle without a license, but they cannot allow you to ride it off their lot without proper licensing. It is illegal to operate a motorcycle on public roads without a motorcycle endorsement or license. To obtain a motorcycle license or endorsement, you will need to pass both a written knowledge test and an on-cycle skills test. The knowledge test will cover motorcycle operation, safety rules, and regulations. The skills test evaluates your ability to properly and safely operate a motorcycle. If you plan to finance the purchase of a motorcycle, the lending institution will likely require you to have a motorcycle license or endorsement before approving a loan. This is because a motorcycle license indicates you are able to properly operate the vehicle, which secures their investment. Some dealers may require a license for the same reason before allowing you to take delivery of a financed motorcycle. It is best to check with dealers and lenders in your area for their specific licensing requirements before purchasing and financing a motorcycle. Obtaining a motorcycle license or endorsement is required for legal and safe operation of a motorcycle. While not always mandatory to purchase a motorcycle, licensing helps ensure you have the necessary knowledge and skills to ride, and may be needed for financing. The investment in proper training and licensing is well worth it for many years of safe riding enjoyment.
Motorcycle Licensing Requirements for Financing Vary by Lender
To obtain financing for a new or used motorcycle, the specific licensing requirements will depend on the lender you choose.
Traditional Banks and Credit Unions
Most traditional banks and credit unions will require a valid motorcycle license and insurance in the buyer’s name to approve a motorcycle loan. They want to ensure you are properly licensed to operate the vehicle legally and safely. Some may require a minimum number of years of riding experience for larger loan amounts or high-performance motorcycles.
Online Lenders
Online lenders and peer-to-peer lending networks typically have more lenient licensing requirements. Many will accept a regular driver’s license to obtain financing, especially for smaller loan amounts, though they still recommend a motorcycle endorsement for safety. A few online lenders geared toward high-risk borrowers may not verify licensing at all, but interest rates from these lenders will likely be much higher.
Private Sellers
If purchasing from a private seller, licensing requirements will vary on a case-by-case basis depending on the seller. Many will request to see a valid motorcycle license, or at minimum a regular driver’s license, before agreeing to seller financing. However, some private sellers may forgo verifying a license altogether when selling to a buyer with a good down payment or trade-in. This is risky, so motorcycle licensing is still highly recommended.
In summary, while licensing rules differ between lenders, obtaining a proper motorcycle license before financing a new bike is the safest approach. It allows you to get the best rates, ensures you can legally and safely ride your new motorcycle, and gives you more financing options to choose from.
Tips for Getting Approved for Motorcycle Financing Without a License
To get approved for motorcycle financing without a motorcycle license, there are a few tips to keep in mind:
Build Your Credit
Having good credit is key to getting approved for any loan product, including motorcycle financing. Check your credit score and credit report for any errors. Pay down existing debt and make payments on time to improve your score. Most lenders require a score of at least 650, but a higher score will get you a lower interest rate.
Provide Income Documentation
Lenders want to see that you have a steady income to repay the loan. Provide recent pay stubs, tax returns, bank statements or other documents showing your income over the past 2 years. Self-employed individuals may need to provide additional documentation like profit and loss statements. Make sure there are no gaps in employment.
Make a Large Down Payment
A sizable down payment, like 20-30% of the motorcycle’s purchase price, shows your commitment and ability to repay the loan. It also means the lender is taking less risk, so they are more likely to approve your application without a license. Look for lenders that accept zero or low down payments if needed.
Apply With a Co-Signer
If your credit or income isn’t quite up to par, applying with a co-signer who has good credit can help you get approved. The co-signer agrees to repay the loan if you default. However, the loan will also appear on the co-signer’s credit report and may impact their ability to get other loans. Make sure you and the co-signer discuss the responsibility before applying.
Research Motorcycle-Friendly Lenders
Some lenders specialize in financing for motorcycle buyers, even those without a license. They understand the motorcycle market and lending risks. Do some research to find lenders in your area that finance motorcycle loans without a license. They may have more flexible underwriting guidelines that work in your favor. Applying with multiple lenders can also increase your chances of getting approved.
Alternatives if You Can’t Get Financing Without a Motorcycle License
If you are unable to obtain financing for a motorcycle without a valid motorcycle license, there are a few options to consider:
Pay in Cash
If you have enough cash on hand, you can purchase a used or new motorcycle outright. While this requires you to pay the full amount upfront, it eliminates the need for any kind of financing or licensing requirements. You will have the title in your name and can ride freely.
Private Seller Financing
Some private sellers may be willing to handle their own financing for the right buyer. They can draft up a sales contract stipulating a down payment amount and monthly payment terms. While riskier, this can be an easy way to get riding without traditional financing if you find an amenable seller. Be very careful and do thorough research on the motorcycle’s value and condition before entering into any private financing agreement.
Ride Now, Pay Later Program
Certain dealerships and private sellers offer “ride now, pay later” programs which allow you to ride the motorcycle immediately with payments deferred for a set period of time, often 3 to 6 months. You will need to pay taxes, registration and insurance fees upfront but can delay paying the principal amount. Interest charges may apply if the balance is not paid off within the promotional period. This allows you time to earn your motorcycle license so you can then qualify for traditional financing.
Co-Signer or Guarantor
If your credit score or lack of licensing is preventing you from obtaining financing on your own, a co-signer with good credit can help. Have a co-signer, like a parent or guardian, sign the financing paperwork with you and agree to make payments if you default. Their credit and credentials will allow the application to be approved, getting you riding while you work to build your own credit and obtain proper licensing. Be very careful, as defaulting can damage your co-signer’s credit.
In summary, while financing a motorcycle typically requires a valid motorcycle license, some alternative options exist to get you riding right away. Carefully weigh the pros and cons of each choice based on your unique situation. With time and diligence, you can establish or re-establish your credit, obtain your motorcycle license, and qualify for traditional financing.
Next Steps After You’re Approved for Motorcycle Financing
Once you have been approved for motorcycle financing, there are a few next steps to complete before you can ride off the lot on your new bike.
Provide Proof of Insurance
In most states, you will need to provide proof of motorcycle insurance before you can register the vehicle. Check with your insurance provider to obtain the necessary proof of insurance documentation, typically an insurance card or declaration page from your policy.
Register the Motorcycle
Take your proof of insurance, along with the title or bill of sale for the motorcycle, to your local DMV to officially register the vehicle in your name. You will need to pay any registration and licensing fees required in your state. The DMV will review your documentation, process the registration, and provide you with license plates for your new motorcycle.
Obtain a Motorcycle Endorsement or License (If Required)
Some states require a special motorcycle endorsement or license to legally ride a motorcycle on public roads. Check with your local DMV to determine the requirements in your state. If an endorsement or license is needed, you will need to pass a written knowledge test and an on-cycle skills test. The tests will evaluate your understanding of motorcycle operation, safety, and handling.
Once you have obtained insurance, registered the vehicle, and acquired the proper license or endorsement (if applicable), you are ready to start riding your new motorcycle. However, it is important for new riders to get properly trained before hitting the open road. Taking a motorcycle safety course can help ensure you have the necessary skills and confidence to ride safely and responsibly.
Overall, following these next steps carefully after being approved for financing will allow you to legally and safely enjoy riding your new motorcycle. With the right preparation and training, you’ll be cruising the open road in no time.
Conclusion
As you’ve discovered, obtaining financing for a new motorcycle typically requires having a valid motorcycle license or endorsement. While there are a few exceptions, especially for those with a long credit history, most lenders want to see that you are properly licensed to operate the vehicle you’re buying before approving a loan. The good news is that in most states, getting a motorcycle license or adding an endorsement to your existing driver’s license is a straightforward process. By studying the manual, taking a written knowledge test, and demonstrating your riding ability, you’ll be licensed and ready to find financing for a new bike in no time. Riding safe starts with being properly trained and licensed. Now that you understand the licensing requirements, you’re well on your way to an exciting new adventure on two wheels.