Harley Davidson Finance: 11 Steps You Need to Know

1. Introduction to Harley Davidson Finance

When purchasing a Harley-Davidson motorcycle, financing is crucial in making your dream bike more accessible. Harley Davidson Finance offers a variety of financing options tailored to meet the needs of different buyers, whether you’re a first-time motorcycle owner or a seasoned rider looking to upgrade. 

In this guide, we’ll explore everything you need to know about Harley Davidson Finance, from the basics of motorcycle financing to the specific options available through Harley Davidson Financial Services (HDFS)

2. The Basics of Motorcycle Financing

Motorcycle financing allows you to purchase a motorcycle by spreading the cost over a period, typically through a loan. Instead of paying the total price upfront, you make monthly payments over a set term, ranging from a few years to several years, depending on the loan agreement.

What is Motorcycle Financing?

Motorcycle financing is similar to car financing, where a lender provides you with the funds to purchase a motorcycle and repay the loan with interest over time. The loan can cover the entire cost of the bike, or you may need to make a down payment to reduce the loan amount. The loan terms, including the interest rate and repayment period, will depend on your credit score, the lender’s policies, and the motorcycle you purchase.

Types of Motorcycle Loans Available

Several types of motorcycle loans are available to buyers, each with its benefits and considerations:

• Secured Loans: These loans are secured by the motorcycle itself, meaning the lender can repossess the bike if you fail to make payments. Secured loans often have lower interest rates because they pose less risk to the lender.
• Unsecured Loans: These loans do not require collateral but typically come with higher interest rates. Unsecured loans are based on your creditworthiness, making them a good option for those with solid credit scores.
• Manufacturer Financing: Some manufacturers, like Harley Davidson, offer in-house financing through their financial services department. These loans may include special terms, promotional interest rates, or other incentives.

How Financing Can Impact Your Motorcycle Purchase

Financing allows you to manage your cash flow by spreading out the cost of your motorcycle over time. This can make higher-end models more accessible or will enable you to add custom features without straining your budget. However, it’s essential to consider the total cost of financing, including interest and fees, to ensure you’re getting a deal that fits your financial situation.

3. Harley Davidson Financial Services (HDFS)

Harley Davidson Finance Services (HDFS) is the dedicated financing arm of Harley Davidson, offering a range of financial products tailored specifically for Harley Davidson customers. HDFS aims to make it easier for riders to own the bike of their dreams by providing competitive financing options and personalised service.

What is HDFS?

HDFS is a wholly-owned subsidiary of Harley Davidson, Inc., established to offer financing and insurance services to Harley Davidson customers. Whether you’re buying a new or used Harley Davidson motorcycle, HDFS provides various financing solutions designed to meet the unique needs of motorcycle enthusiasts.

Key Benefits of Using HDFS

Choosing HDFS for your motorcycle financing comes with several advantages:

• Exclusive Financing Offers: HDFS often provides special financing rates and promotions exclusive to Harley Davidson customers. These offers can include low-interest rates, zero down payments, or deferred payment options, making it easier to afford a new bike.
• Flexible Loan Terms: HDFS offers a range of loan terms, allowing you to choose a repayment schedule that fits your budget. Whether you prefer a shorter term with higher monthly payments or a longer term with lower payments, HDFS can accommodate your needs.
• Personalised Service: HDFS is committed to providing excellent customer service, with knowledgeable representatives who understand the Harley Davidson brand and the unique needs of motorcycle buyers.

Eligibility Criteria for HDFS Loans

To qualify for an HDFS loan, you typically need to meet specific eligibility criteria:

• Credit Score: While HDFS considers a range of credit scores, a higher score can help you secure better loan terms, such as lower interest rates and more extended repayment periods.
• Income and Employment: Lenders will assess your income and employment status to ensure you have the financial stability to repay the loan. Proof of income may be required during the application process.
• Down Payment: Depending on your credit profile, you may be required to make a down payment to secure financing. A larger down payment can reduce your monthly payments and the overall cost of the loan.

4. Financing Options Available through Harley Davidson

Harley Davidson Finance offers a variety of financing options through HDFS, allowing you to choose the plan that best suits your financial situation and riding goals. Understanding these options can help you decide when purchasing your Harley Davidson motorcycle.

Traditional Loan Options

HDFS provides traditional instalment loans that allow you to finance your motorcycle over a period, typically 36 to 72 months.

With this option, you’ll make fixed monthly payments that include principal and interest until the loan is paid off.

• Fixed Interest Rates: Traditional loans from HDFS usually come with fixed interest rates, meaning your monthly payments remain consistent throughout the loan term. This stability makes it easier to budget and plan for your expenses.
• Flexible Terms: Depending on your financial situation, you can choose a loan term that works best for you. Shorter terms may result in higher monthly payments but lower overall interest costs, while longer terms can reduce your monthly payments but increase the total interest paid over time.

Flexible Payment Plans

In addition to traditional loans, HDFS offers flexible payment plans that provide greater customisation based on your needs:

• Balloon Payment Plans allow you to make lower monthly payments throughout the loan term, with a larger balloon payment due at the end. This option can be beneficial if you anticipate a future financial windfall or plan to refinance before the balloon payment is due.
• Deferred Payment Plans: Some financing promotions may offer deferred payments for a set period, allowing you to make payments several months after purchasing your motorcycle. This can be helpful if you need time to arrange your finances before taking on a new monthly obligation.

Leasing vs. Buying: Pros and Cons

Harley Davidson Finance also offers leasing options, allowing you to ride a new motorcycle every few years without committing to full ownership. Here’s a quick comparison:

• Leasing Pros:
  • Lower monthly payments compared to buying
  • Ability to ride a new model every few years
  • Reduced maintenance costs due to shorter ownership periods
• Leasing Cons:
  • Mileage restrictions and potential overage fees
  • No equity build-up or ownership at the end of the lease term
  • Potential fees for excessive wear and tear
• Buying Pros:
  • Full ownership of the motorcycle once the loan is paid off
  • No mileage restrictions, allowing unlimited riding
  • Ability to customise the bike to your liking without lease restrictions
• Buying Cons:
  • Higher monthly payments compared to leasing
  • Long-term maintenance and repair costs
  • Depreciation of the motorcycle’s value over time

5. Interest Rates and Terms for Harley Davidson Loans

Interest rates and loan terms are critical factors in determining the overall cost of financing your Harley-Davidson motorcycle. Understanding how these elements work can help you make a more informed decision and save money over the life of your loan.

Understanding Interest Rates

Interest rates represent the cost of borrowing money and are expressed as a percentage of the loan amount. The interest rate you receive on a Harley Davidson loan will depend on several factors:

• Credit Score: Borrowers with higher credit scores typically qualify for lower interest rates, as lenders consider them less risky.
• Loan Term: The length of your loan term can also impact the interest rate. Shorter terms often come with lower interest rates, while longer terms may have higher rates.
• Down Payment: A larger down payment can reduce the loan amount and sometimes qualify you for a lower interest rate.

Typical Loan Terms Offered by Harley Davidson Finance

HDFS offers a variety of loan terms to accommodate different financial situations:

• Short-Term Loans (24-36 months): These loans have higher monthly payments but lower total interest costs. They are ideal for buyers who want to pay off their motorcycles quickly.
• Medium-Term Loans (48-60 months): A balance between short and long-term loans, these terms offer moderate monthly payments and interest costs.
• Long-Term Loans (72-84 months): These loans have the lowest monthly payments but the highest overall interest costs. They suit buyers who need to minimise their monthly expenses but are comfortable paying more over time.

How Your Credit Score Affects Your Loan Terms

Your credit score plays a significant role in determining the loan terms offered by HDFS. A higher credit score qualifies you for lower interest rates, better loan terms, and lower down payment requirements. Conversely, a lower credit score may result in higher interest rates and less favourable loan terms.

If your credit score could be better, you may still qualify for financing, but you might face higher costs. To improve your chances of securing favourable terms, consider improving your credit score before applying, such as paying down existing debt or correcting any errors on your credit report.

6. Applying for Harley Davidson Finance

Applying for Harley Davidson Finance is a straightforward process, but it’s essential to be prepared with the necessary information and documents to increase your chances of approval. Here’s a step-by-step guide to help you through the application process.

Steps to Apply for Financing

1. Research Financing Options: Before applying, research the different financing options available through HDFS. Consider factors like loan terms, interest rates, and any special promotions.
2. Pre-Qualification: Some lenders, including HDFS, offer pre-qualification services that allow you to see potential loan terms without impacting your credit score. Pre-qualification can give you an idea of what to expect before submitting a complete application.
3. Submit Your Application: Once you’ve chosen a financing option, you must complete a loan application. This can typically be done online, at a Harley Davidson dealership, or by contacting HDFS directly.
4. Provide Required Documentation: Be prepared to provide documentation that supports your application, such as proof of income, identification, and information about the motorcycle you’re purchasing.
5. Review Loan Offer: After submitting your application, HDFS will review your information and provide a loan offer if you qualify. Take the time to review the terms carefully, including the interest rate, loan term, and any fees.
6. Sign the Loan Agreement: If you agree to the loan terms, you’ll sign a loan agreement outlining your obligations. Make sure you understand all the terms before signing.
7. Receive Your Funds: Once the loan agreement is signed, HDFS will disburse the funds to the dealership, allowing you to take ownership of your new Harley Davidson motorcycle.

Required Documents and Information

To apply for Harley Davidson Finance, you will typically need the following:

• Personal Identification: Government-issued ID, such as a driver’s license or passport.
• Proof of Income: Recent pay stubs, tax returns, or bank statements showing your income.
• Credit Information: Authorization to check your credit score and report.
• Motorcycle Details: Information about the motorcycle you’re purchasing, including the make, model, and VIN.

How to Increase Your Chances of Approval

If you’re concerned about your chances of approval, consider these tips:

• Improve Your Credit Score: Pay off debts, avoid new credit inquiries, and ensure your credit report is accurate.
• Save for a Down Payment: A larger down payment can reduce the loan amount and show lenders that you’re serious about repaying the loan.
• Consider a Co-Signer: If your credit score is low, having a co-signer with good credit can improve your chances of approval.

7. Benefits of Financing through Harley Davidson

Choosing to finance your motorcycle through Harley Davidson Financial Services comes with several unique benefits designed to enhance your ownership experience. These benefits go beyond the financial aspects, adding value to Harley Davidson customers.

Exclusive Benefits for Harley Davidson Customers

Financing through HDFS provides access to exclusive benefits that are not available through other lenders:

• Special Financing Rates: HDFS frequently offers promotional interest rates that are lower than standard market rates, helping you save money over the life of your loan.
• No Prepayment Penalties: HDFS loans typically do not have prepayment penalties, allowing you to pay off your loan early without incurring additional fees.
• Extended Warranty Options: Financing through HDFS may make you eligible for extended warranty options, providing peace of mind and protecting your investment.

Special Offers and Promotions

HDFS regularly runs special offers and promotions, such as:

• Deferred Payment Programs: Allowing you to delay your first payment for several months, giving you more time to manage your finances.
• Zero Down Payment: Some promotions may offer zero down payment options, making it easier to purchase a motorcycle without a considerable upfront cost.
• Loyalty Discounts: If you’re a repeat customer, HDFS may offer loyalty discounts on financing rates or other incentives.

Loyalty Programs and Rewards

HDFS offers loyalty programs that reward repeat customers with additional benefits:

• Harley Owners Group (HOG): Financing through HDFS may include membership in the Harley Owners Group, providing access to exclusive events, merchandise, and services.
• Rewards Points: Some financing plans may offer rewards points that can be redeemed for Harley Davidson merchandise or accessories, adding extra value to your purchase.

8. Common Challenges in Motorcycle Financing

While financing your Harley-Davidson motorcycle can be smart, you should be aware of potential challenges. Understanding these challenges can help you navigate the financing process more effectively and avoid common pitfalls.

Potential Pitfalls of Motorcycle Financing

Financing a motorcycle comes with certain risks, including:

• High-Interest Rates: Depending on your credit score and the loan terms, you may face high interest rates that increase the overall cost of your motorcycle.
• Hidden Fees: Some loans may include hidden fees, such as origination fees, prepayment penalties, or late payment charges, which can add to the cost of financing.
• Long-Term Debt: Financing a motorcycle can result in long-term debt, especially if you choose a longer loan term. This can impact your financial flexibility and ability to fulfil other financial obligations.

How to Avoid High-Interest Rates and Hidden Fees

To avoid high interest rates and hidden fees, consider the following tips:

• Shop Around: Compare loan offers from multiple lenders to find the best interest rates and terms. Don’t settle for the first offer you receive.
• Read the Fine Print: Carefully review the loan agreement to understand all the terms and conditions, including any applicable fees.
• Negotiate the loan terms with the lender to reduce interest rates or eliminate fees. Some lenders may be willing to adjust the terms to secure your business.

The Impact of Long-Term Loans on Your Finances

While long-term loans can reduce your monthly payments, they also have several downsides:

• Higher Overall Cost: The longer the loan term, the more interest you will pay over time, increasing the total cost of the motorcycle.
• Negative Equity: If the motorcycle depreciates faster than you pay down the loan, you may owe more than the bike is worth, a situation known as negative equity.
• Limited Financial Flexibility: Long-term loans can tie up your finances for years, making it harder to take on new financial commitments or respond to unexpected expenses.

9. Refinancing Your Harley Davidson Loan

Refinancing your Harley Davidson loan can be a smart financial move if you want to lower your monthly payments, reduce your interest rate, or adjust the loan term. Understanding the refinancing process can help you decide if it’s the right option.

What is Refinancing?

Refinancing involves replacing your existing loan with a new one, typically with better terms. The new loan pays off the remaining balance of your old loan, and you begin making payments on the new loan according to its terms.

When Should You Consider Refinancing?

Consider refinancing your Harley Davidson loan if:

• Interest Rates Have Dropped: Refinancing could lower your monthly payments and the total loan cost if interest rates have fallen since you took out your original loan.
• Your Credit Score Has Improved: If your credit score has improved significantly, you may qualify for a lower interest rate, making refinancing a good option.
• You Need to Adjust Your Loan Term: Refinancing can help you achieve your goals of extending your loan term to reduce your monthly payments or shortening it to pay off your loan faster.

How to Refinance Your Existing Harley Davidson Loan

To refinance your Harley Davidson loan, follow these steps:

1. Evaluate Your Current Loan: Review the terms of your existing loan, including the interest rate, loan term, and remaining balance. Determine what you hope to achieve by refinancing.
2. Shop for Refinance Offers: Compare refinance offers from different lenders, including HDFS, to find the best terms. Consider factors such as interest rates, loan terms, and any fees associated with refinancing.
3. Submit a Refinance Application: Once you’ve chosen a lender, submit a refinance application. You must provide information about your current loan, credit history, and financial situation.
4. Review and Accept the New Loan Terms: If your refinance application is approved, carefully review the new loan terms and ensure they align with your financial goals before accepting the offer.
5. Complete the Refinance Process: Once you accept the new loan, the lender will pay off your existing loan, and you’ll start making payments on it according to its terms.

10. Insurance Considerations When Financing

When financing a Harley-Davidson motorcycle, it’s essential to consider your insurance needs. Insurance is not only a requirement for most lenders but also crucial for protecting your investment and ensuring you’re covered in case of an accident or theft.

Importance of Motorcycle Insurance

Motorcycle insurance provides financial protection for accidents, theft, or other incidents that can damage your bike or cause injuries. It helps cover the costs of repairs, medical bills, and liability claims, ensuring you’re not left with a significant financial burden.

How Financing Affects Insurance Requirements

When you finance a motorcycle, lenders typically require you to carry full coverage insurance, including:

• Collision Coverage: Pays for repairs to your motorcycle if it’s damaged in an accident, regardless of who is at fault.
• Comprehensive Coverage: Covers non-collision-related damages, such as theft, vandalism, or natural disasters.
• Liability Coverage: This covers damages and injuries you cause to others in an accident.

These coverage types protect both you and the lender by ensuring that the motorcycle can be repaired or replaced if it is damaged or stolen.

Tips for Choosing the Right Insurance for Your Harley Davidson

When selecting insurance for your Harley Davidson, consider the following tips:

• Shop Around: Get quotes from multiple insurance providers to find the best coverage at the most affordable price.
• Consider Your Deductible: A higher deductible can lower your premium, but make sure you can afford the deductible amount if you need to file a claim.
• Bundle Insurance Policies: If you have other insurance needs, such as car or home insurance, consider bundling them with your motorcycle insurance to receive discounts.
• Review Coverage Limits: Ensure your coverage limits are sufficient to cover the total value of your motorcycle and any potential liability claims.

11. Customer Experiences with Harley Davidson Finance

Hearing from other Harley-Davidson customers can provide valuable insights into the financing process and help you understand what to expect. Here are some real-life stories and experiences shared by Harley Davidson owners who financed their motorcycles through HDFS.

Real-Life Stories from Harley Davidson Customers

• John’s Experience with HDFS: John, a long-time Harley enthusiast, decided to finance his dream bike through HDFS. He was impressed with the competitive interest rates and the personalised service he received. The financing process was straightforward, and John appreciated the flexible payment options that allowed him to manage his budget effectively.
• Sarah’s Upgrade Journey: Sarah had been riding her Harley for several years and decided to upgrade. She traded in her old bike at a Harley Davidson dealership and financed her new model through HDFS. The trade-in process was smooth, and Sarah was thrilled with the loyalty discounts she received as a returning customer.

Customer Satisfaction with Harley Davidson Financial Services

Many Harley Davidson customers report high levels of satisfaction with HDFS, citing factors such as:

• Ease of Application: Customers appreciate the simplicity of the loan application process, whether online or at the dealership. The quick approval times and clear communication from HDFS representatives contribute to a positive experience.
• Competitive Rates: HDFS offers competitive interest rates, especially compared to other lenders. Customers value the savings they receive through special promotions and exclusive financing offers.
• Flexible Terms: The flexibility of loan terms is a significant benefit for customers, allowing them to choose a repayment schedule that fits their financial situation.

Lessons Learned from Financing Experiences

Customers who have financed through HDFS often share valuable lessons learned:

• Research is Key: Many customers emphasise the importance of researching financing options and understanding the terms before committing to a loan. This helps ensure that you get the best deal possible.
• Communication Matters: Keeping open communication with HDFS is crucial, especially if you’re facing financial difficulties. Many customers have successfully worked with HDFS to adjust their payment plans when needed.

Making the Right Choice with Harley Davidson Finance

Financing your Harley Davidson motorcycle through HDFS offers a range of benefits, from competitive interest rates and flexible payment plans to exclusive customer rewards and special promotions. By understanding the financing options available and considering factors such as loan terms, interest rates, and insurance requirements, you can make an informed decision that aligns with your financial goals.