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What is Total Amount Payable (TAP)

These days it is easier than ever to finance your new motorbike purchase. Whether you are buying new or used, looking to pay a deposit or to spread the cost of your finance over a fixed period, there is an option to suit nearly every buyer.

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If you do choose to enter into a finance agreement, you need to be aware of the additional costs involved.  Initially there may be administration fees to pay, but it is the total amount payable at the end of the term that should be of more interest to you.

The Total Amount Payable is the actual amount you will pay, including the cost of the bike and any interest over the duration of the payment term.   It is the combined amount of all of the monthly instalments paid to the finance company, as well as the interest amounts on top.

If you are ready to buy your new bike, but don’t want to foot the bill all in one go, here are the most popular ways to finance your next purchase:

How Can I Finance My New Motorbike?

Personal Loans

Sometimes referred to as unsecured personal loans, these types of finance arrangements are not secured against any particular asset (unlike a like a mortgage for example, which is secured against a property).  The amount you can borrow will be based on your personal financial situation and your credit history.

With a personal loan you agree to pay fixed monthly payments and continue to make them until the loan amount, plus interest, is paid in full.  The advantage of a personal loan is that it is not tied to your bike, meaning you can sell or upgrade anytime you wish.

Usually with a personal loan, you pay a deposit from your own funds, then use the loan amount to finance the rest of the cost.  Once the loan amount has been repaid, you can keep the bike, knowing it is fully paid up and yours to enjoy.

Personal Contract Purchase (PCP)

A Personal Contract Purchase agreement allows you to “lease” your new bike from the finance company, by making monthly payments for a pre-arranged term. You put down a deposit or trade in your existing bike, then pay a fixed monthly amount for the duration of the term.

Before you sign up for a PCP agreement, you will be given a Guaranteed Minimum Future Value (GMFV) amount, which is the price you would need to pay to buy the bike from the finance company at the end of the term.  Once all of the monthly payments have been made, you have several options to choose from depending on what best suits your requirements. You can

  1. Pay the GMFV and keep hold of your bike
  2. Give the bike back to the dealership with no extra payments to be made
  3. Use the part exchange value of the bike towards financing a new one.

Using a PCP agreement means you can keep the monthly payments low, and can change your vehicle as often as you like.

Hire Purchase (HP)

Much like a personal loan, Hire Purchase allows you to pay off the cost of the bike over a fixed term, using monthly payments that suit your budget.  Unlike a personal loan however, the HP amount is secured against your new bike.  You will not own the bike until the loan and any interest payments are made in full.

Questions or Comments?

If you’ve got a question about this article and you need a bit more guidance, drop a comment below and we’ll get back to you.

Likewise, if you’ve got something to add to this article or an experience you’d like to share, let’s hear it!

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