Buying a motorbike and trying to get away from PCP.

Wishywashy74

Morning, ok so bear with me on this one.

I have two motorbikes I purchased new last year (I let my heart rule my head I'm afraid).

One of the bikes I bought on PCP, I owe around £12170 on the settlement figure and bike is worth roughly that on the2nd hand market, tbh I shouldn't have bought this bike as I barely use it.

The other bike I took a small loan out on it, its worth around £12k and I owe £7k on the loan.

I'm wanting to go down to one bike as I'm looking to downsize a little and sort finances (I am quite fortunate with my lifestyle as I can easily afford this setup at the moment).

However I'm thinking of getting rid of both bikes to go down to either 1 bike (I will buy with the use of a small loan, instead of using a big chunk of my savings and keep, and I'll be able to do whatever I want with it), if I go down this route it will help reduce my outgoings on a bike per month. And then maybe in a year or to I'll just pay off the loan. This bike won't be new but its from a well respected dealer and will come with an initial 6 month warranty.

The other option is, i've been offered what looks on paper a good deal on my PCP bike and go against another PCP deal, then I'll try and sell the other bike that has a small loan, pay off the loan and bank the money left over. Only thing with this is I'll be riding another PCP bike, it's never mine unless I pay off the balloon payment which I'll likely never do and will end up getting another PCP down the line.

Out of all my biking group I'd say 90% of them have older bikes and will not touch a PCP deal and I see them enjoying their bikes etc etc etc.

Any thoughts or suggestions please.

Mildly_Miffed

Wishywashy74 said:

One of the bikes I bought on PCP, I owe around £12170 on the settlement figure and bike is worth roughly that on the2nd hand market, tbh I shouldn't have bought this bike as I barely use it.

The other bike I took a small loan out on it, its worth around £12k and I owe £7k on the loan.

I'm wanting to go down to one bike as I'm looking to downsize a little and sort finances (I am quite fortunate with my lifestyle as I can easily afford this setup at the moment).

The obvious answer, then is to get shot of the PCP bike, breaking even - and you have one bike that you owe £7k on against £12k value, so have £5k equity.

Only thing with this is I'll be riding another PCP bike, it's never mine unless I pay off the balloon payment which I'll likely never do and will end up getting another PCP down the line.

And that's why financiers love PCP. Because it's a treadmill.
Attractive low headline figures, but hard to get off, and they can dangle a carrot that'll probably never come true... "It'll be worth more than the balloon" - if that were true, then you've been paying off more than you needed to.

david29dpo

`as above. you live and learn

Herzlos

For this deal on the new bike on PCP, will they take both bikes in as p/x?

That'd clear both your existing debts, give you about £5k in equity and drop your outgoings significantly. Then you can always refinance to settle the PCP early.

Or will they give you a reasonable deal to sell both bikes and then you can buy something older without the PCP?

Frozen_up_north

Mildly_Miffed said:

And that's why financiers love PCP. Because it's a treadmill.
Attractive low headline figures, but hard to get off, and they can dangle a carrot that'll probably never come true... "It'll be worth more than the balloon" - if that were true, then you've been paying off more than you needed to.

Well said. I have only once had a PCP and eventually realised the odds are in favour of the dealer/finance company. Initially they look good, but at the end of the first one you can end up with nothing and have to start over again from scratch... No thanks.

shinytop

If you want to go down to one bike it would be better financially to keep one of the ones you have rather than get rid of both and get something different. You'll likely lose money on each one you sell / trade in. It's very difficult to sell a £12k  bike privately these days so you may end up selling to dealers/traders.

And like you said, you don't need the latest model to enjoy your bike. 

MEM62

Wishywashy74 said:

Morning, ok so bear with me on this one.

I have two motorbikes I purchased new last year (I let my heart rule my head I'm afraid).

Nothing wrong with that - I have three  :-)

Your mistake, in my opinion, was borrowing to purchase the bikes.  My bikes are a hobby - essentially toys and I will not buy one unless I can afford to pay for it in cash.  In your position I would get rid of both bikes and buy something that you can afford to pay for outright.    

GixerKate

I have had new, on PCP and older bikes and by the sound of it you aren't particularly attached to the two you have at the moment (what you got btw? lol).

I am not a fan of PCP, the bike I had never felt like mine and couldn't ride it as freely as I wanted to, I wouldn't do that again and as you say, you will never get around to paying off the balloon payment so you will always end up paying more than any of the bikes are actually worth.

An option would be to sell the bike on PCP and settle that finance agreement leaving you with the remaining bike.  Does it do everything you want it to do?  Touring / commuting / trackdays / offroading?  If not sell that and then start again to get a bike that ticks more of your boxes.

Older bikes can be just as much fun, if not more fun, than the new ones plus will last for years if looked after.

MEM62

GixerKate said:

Older bikes can be just as much fun, if not more fun, than the new ones plus will last for years if looked after.

I could not agree more  :-)

sparklymarkly

That RD is a beauty!