Can You Buy a Motorcycle with a Credit Card in the Philippines?
If you’re considering buying yourself a motorcycle, it can be tempting to simply hand over your credit card and say ship it!
But there are some things you should think about before shelling out your plastic for that new bike, especially if you live in the Philippines and you’re planning on getting a motorcycle with a credit card.
To help you decide whether or not that’s the best route, we’ve put together this guide to buying motorcycles with credit cards in the Philippines so you know all the ins and outs of the process before making such an important decision!
The Basics of Buying a Motorcycle
Motorcycles are not cheap.
In fact, they can be quite expensive depending on what you want.
If you want to buy one of these vehicles, you need to figure out how to finance it first.
Luckily, there are ways that you can buy a motorcycle and pay for it with your credit card if you're buying in the Philippines.
The first step is getting pre-approved for an auto loan from a bank or lending institution.
The next thing you'll have to do is find an authorised dealer who sells the make and model that you want, along with other models of motorcycles.
There will also be an array of different brands available at this dealership such as Honda, Yamaha, Harley Davidson, Suzuki, Triumph and Kawasaki just to name a few.
Once you've found a dealer and have been approved for an auto loan, all that's left is picking out the specific model that you want and sign papers to purchase it.
Most dealerships accept all types of major credit cards which means that if you choose to buy your motorcycle with credit card in the Philippines then you won't have any problems.
If you decide to finance your motorcycle through a bank, most of them allow you up to five years to pay off the balance.
You might have heard horror stories about people being saddled with interest rates upwards of 18% but that doesn't apply here because banks typically charge between 6-10%.
That's a big difference and should really help ease some stress while making monthly payments.
Can You Buy a Motorcycle with a Credit Card?
In this post, I will address whether or not you can use a credit card to buy a motorcycle in the Philippines.
With an increase in credit card usage as well as debit card usage, it's worth knowing if you can use your credit card for such purchases.
Unfortunately, there are limitations on what you can purchase through your credit card, and motorcycles are one of those products that cannot be purchased with it.
If you want to buy a motorcycle, then you need to go with cash or other form of payment.
For most people who have bought motorcycles using their credit cards, they typically used the card because they had rewards points on it.
That way, they were able to use them towards the bike.
But, unfortunately, rewards points cannot be redeemed towards bikes at all.
The only exception would be if you happen to own a particular type of car dealership where you could get those points from cars or car parts instead (i.e., Kia).
However, this only applies for dealerships and not for retail shops like Honda and Kawasaki.
Ultimately, the best thing to do is to find out about how different types of retailers work when it comes to using your credit card versus other forms of payments.
Some might be more flexible than others so keep an eye out for that! If you don't have any luck with one company, just move onto another until you find someone willing to take your money in exchange for goods.
And remember that even though some retailers may say they don't accept credit cards, don't let them discourage you- sometimes the line on the sign is there just to discourage people from asking!
Just ask politely and persistently enough, and eventually they'll probably relent and allow it.
The Pros and Cons of Buying a Motorcycle on Credit
A motorcycle is an expensive purchase, so you may be wondering if you can buy one on credit.
The answer is yes, but there are some cons to consider.
Purchasing a vehicle on credit means that you'll need to pay interest charges and could end up paying more for the vehicle than it's worth.
There are advantages too though, such as being able to buy now and pay later without having to put down any money upfront.
If you're considering buying a new bike or used bike from a dealer, remember that dealers will usually only offer financing options when they sell their bikes through dealerships.
You also have to make sure that your monthly payments won't exceed what your income allows.
When applying for a loan, you'll be required to list all of your debt obligations along with your monthly expenses.
In addition, if you take out a car loan before turning 25 years old, you might not qualify for other types of loans later in life because of your lack of good credit history.
Some sources say that your chances of approval depend on the following factors: .
Your likelihood of getting approved depends on your age; and whether you've had trouble paying off previous debts.
One thing that can help increase your odds of approval is if the total cost of the bike (including any finance charges) does not exceed 30% of your monthly income after taxes.
Other things that lenders look at include how many vehicles you already own and the length of time you intend to keep the bike.
Keep in mind that if your monthly payment exceeds 50% of your pre-tax salary, it becomes difficult to pay off the loan.
That said, purchasing a bike on credit can be beneficial if you plan to keep the vehicle for three or more years and make timely payments.
The amount of credit available to you also varies by lender.
Generally, larger banks tend to have lower limits for people who don't have established credit histories whereas smaller institutions like speciality finance companies often give bigger loans with higher limits.
Before deciding which bank is best for you, compare rates and benefits offered by different financial institutions .
It may also be wise to ask about the annual percentage rate (APR) for various loans and check reviews online about their customer service ratings.
Pros of buy motorcycle on credit card
The benefits of buying a motorcycle on credit card can't be denied.
A credit card will let you buy any product that you want without having to wait for your paycheck to come through.
It will also give you more time to plan and save up for the purchase.
However, there are some cons to buying a motorcycle on credit card as well.
Some people say that it's easier to get into debt if they use their credit card because it's so easy to make purchases when there is no cash involved.
One drawback to using your credit card is that interest rates tend to be higher than other forms of loans or lines of credit.
Interest rates range from 18% - 25% depending on the company and how good your credit score is.
If you have bad credit or don't pay off your balance every month, then these interest rates can really take a toll on you.
Another con to using a credit card to buy a motorcycle is that there might not be enough room in your budget after purchasing the bike.
Credit cards offer you 0% financing, which means if you don't pay off the full balance at once, then you'll owe interest on it each month until it's paid off.
Another con would be paying more than what the bike is worth by being tempted by all those extra features added onto an already expensive purchase.
When you're financing a purchase, you need to find out what the total cost of your bike will be before going into the dealership.
Keep in mind that this may include things like: sales tax, license plate fees, and registration fees.
Many dealerships offer deals where they allow you to finance just the cost of the bike while making monthly payments for everything else that comes with owning a vehicle like insurance, gas and oil changes, etc.
Cons of buy motorcycle on credit card
You may have heard that you can buy a motorcycle on credit card.
However, before you do, there are cons to doing this.
One of the cons is that you have to pay interest on your purchase for up to 3 years or more.
This could lead to paying off way more than what your motorcycle was worth in the end.
Plus, if you default on your payments after 3 years and stop making payments, then your credit score will be affected and it will be harder for you to borrow money from other sources.
In addition, when buying something like a car or house using your credit card, you can apply for an auto loan that does not require any down payment.
In order to get an auto loan without a down payment on your motorcycle purchase, you would need to qualify for one first by having decent credit and enough income left over after all expenses are paid each month.
Some banks also offer loans that allow you to take cash advances against your credit card so you could put down some cash instead of none at all.
If you're considering whether or not to use your credit card, it's always best to ask yourself how much cash flow you'll have available every month.
Many times people think they'll have enough to afford monthly payments but it turns out they were wrong because their monthly bills totalled more than expected.
When deciding between getting an auto loan or using your credit card, you should figure out which option has the lower rate.
For example, if you buy a $5,000 motorcycle and can get an interest rate of 6% while using your credit card with 18% APR, it might make sense to go ahead and use the 6%.
After three years, you will have only paid about $4,833 for the bike whereas if you had used a credit card with an 18% APR, you would have spent around $6,933 - which is almost twice as much!
What to Do if You Can't Afford a Motorcycle
If you're trying to buy a motorcycle but don't have enough money saved up, there are other ways to get around.
One option is to get a credit card and use that for your purchase.
There are some considerations before taking this route though, so be sure to weigh them before making your decision.
For instance, if you pay off your balance every month then it's not an issue, but if you end up carrying over a balance then it could end up costing more than expected.
The interest rate of the card should also be taken into consideration.
It will vary depending on what type of card you apply for; cash advances, rewards cards, and credit cards typically offer lower rates while store or travel cards usually offer higher ones.
Of course, when using a credit card for purchases like these, there are fees and additional costs to consider as well.
Another thing to keep in mind is whether or not you want to make payments each month by either setting up auto-pay or by manually paying each time.
With auto-pay, you'll never forget to make a payment because it happens automatically (and incurs late fees if skipped).
When making manual payments, be sure to budget how much can go towards debt versus spending on something else.
Setting aside 15% of your total income to put toward monthly expenses and revolving credit may help prevent things from getting out of hand.
After considering all the factors, decide which option works best for you.
Bottom Line :Can you buy a motorcycle with a credit card?
Technically yes, but it isn’t legal to use your credit card when buying motor vehicles or other high-value items in the Philippines.
There are still some dealers that may let you do this, but they are in the wrong and not following the rules of their financial institution.
If you use your credit card to buy your motorcycle in the Philippines, don’t be surprised if you get hit with additional charges when you go to make your monthly payment on your account.
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