How to pay for your new motorcycle...

• From time-to-time dealers will offer 0% interest rates, you cannot beat this no matter how much shopping around you will do, a larger deposit may be required though. However, make sure the bike is insured on a fully comprehensive basis. You should consider Gap insurance for the full amount of the HP agreement or you could be left short if the bike's stolen and your insurers payout less than you paid.
• Hire Purchase (HP): Simple and straightforward, you pay a deposit, make the monthly payments for a set period of time and the bike's yours at the end of the term, until then, the bike belongs to the finance company.
• Most dealers will be tied to a finance company to arrange the HP, which is very simple as you can buy the bike and arrange finance at the same time, but it could cost you in the long run. Dealer's will always prefer to sell a bike on 'finance' as they receive a 'kick back' for arranging it. However, default on payments and they may repossess the bike, unless you have paid 30% of the value, when you sell the bike, the finance will have to be repaid. Also, the bike may be harder to sell if it has outstanding finance.
• Personal Loan: Similar to HP, the payments are fixed for a period of time but the loan is not secured on the bike, so the finance company cannot repossess it. Choose the lender carefully, there are a lot of deals out there, all competing for the same business, so you should be able to get a reasonable rate. Lenders prefer do not like borrowers that represent a high risk, such as the young, unemployed, bad credit history, it's not unusual to be charged 25% APR. Make sure the deal is right for you, don't buy a bike you will sell in 5 years and borrow the money over a period of 10 years, paying the money back early may also mean you will be charged so check the small print.
• Credit Card: Like a loan, the APR can differ greatly and you may be able to get the first 6 months at 0% and the amount you pay back is flexible and dependant upon you, unless you pay the minimum payment each month but then you will mainly be paying off the interest. Some credit cards also offer extra protection if the goods are faulty. However, credit card debt can soon mount up and spiral out of control as there is no payment structure in place. Credit Card companies will also try to sell 'payment protection' to you.

Payment options

More and more bikers are out-of-pocket as a result of fraudsters paying for bikes with forged cheques, unfortunately, from a legal point of view, it is the receiver that suffers, not the bank. In some cases it can take weeks for a forged cheque to be returned, don't work on the basis that it takes 5 working days (or less) to clear. Other options include:

• Bankers Draft: The bank guarantees payment, costs in the region of £10 but how do you tell if the draft is fraudulent - avoid.
• CHAPS: A same day electronic bank transfer, very safe but it costs the sender about £20, depending on the bank or building society - recommended.
• BACS: Electronic bank payment, very safe but takes three working days to clear, free to use and can be done over the internet - recommended.
• Cheque: Easy to use and cheap but the receiver risks the cheque bouncing, the banks refuse to admit liability if a fraudulent cheque has been used and in some cases can take weeks before the receiver is aware that payment has been returned - avoid.
• Cash: It's in your hand but check for forged notes, easily stolen - recommended.