Two-wheeler loans: Things you should know

The utility of two-wheelers in India is such that every teen in this country dreams to own one. First bike is always special and the excitement of riding your new pair of wheels is very high. Looking at the new and high-end models and top variants available, choosing your favorite bike can get confusing and making a purchase upfront can also put pressure on your wallet.

This doesn’t mean you give up on your dream bike and settle for a lower variant. Today, most dealers offer easy finance options which can make your purchase experience hassle-free and seamless. For those who are on a tight budget, buying a pre-used bike from a trusted seller can also be a good alternative. Bike lovers usually maintain their bikes well and you can get a good deal on a well-maintained bike if the seller is relocating or planning to upgrade existing vehicle.

Buying a used two-wheeler is however much more complex than purchasing a new bike. The used two-wheeler market differs in consumer behavior, sales process, product attributes and the overall support ecosystem.

Consumers are often confused with respect to many factors right from buying, financing and servicing their vehicles. Today, ever than before, there is a need for authorized dealers to offer a one stop solution, especially in the used two-wheeler industry.

In my experience of over 35 years, I have come to understand that there are a few important aspects which a potential buyer should keep in mind before opting for a used two-wheeler and planning it’s financing.

Purpose 

A two-wheeler is a dream for many, but first things first, before purchasing a two-wheeler it is very important to understand your requirement and the exact purpose of purchase. You should assess what do you need your two-wheeler for? Who will be using it? And the duration and distances of commute. Once you know what you are looking for, you should decide the segment and your preference of – bike, scooter, cruiser or commuter bike — based on your budget.

Where to buy it from?

Once you chalk out your purpose and the two-wheeler of your choice, you must assess the place to buy it. Currently, you can choose from unorganized retail outlets which are basically small mom and pop shops, person to person sale (OLX or Quickr, etc) or branded two-wheeler showrooms which sell both new and pre-owned vehicles.
Why you need to decide this is because there are advantages and disadvantages to the type of place that you choose from. In case of unorganized retail outlets (URO), the advantage is the variety of choice and ease of comparison since many outlets are concentrated in a particular area. However, you should check the vehicle quality in these cases. If you decide to buy from a private seller, the advantage is that the price you end up paying might be a bit lower in comparison to a URO or a branded outlet, but there’s also a chance of risk. It is advisable to thoroughly check the vehicle as well as the documents and be careful of online frauds.

Because of the possible risks involved, the best option remains to buy either from a branded pre-owned two-wheeler outlet or a URO with high vintage & decent reputation, where you can get a comprehensive service with a thoroughly checked and refurbished vehicle, transparent pricing with an assured warranty as well as easy financing options.
The next most important factor to consider is pricing and financing

How much to pay and how to finance it?

Price negotiation is the key once you are satisfied with the technical aspect of your bike and paperwork. Most common method to assess the price of a used two-wheeler is to know the price of the new model and then factor in the depreciation and wear and tear on the price. You should also factor in the cost that you may have to incur after buying the vehicle.

To avoid the hassles of negotiations and to ensure you get transparent pricing, you can simply visit a franchisee of any branded used two-wheeler showroom. Their pricing system is usually tech enabled and hence you pay the right price for your dream bike and can avail benefit of free service period. In case of financing your vehicle with ease, the best way is to approach banks or NBFCs that specialize in used two-wheeler financing and check with dealers on finance options available.

Owning a two-wheeler for your independence and necessities is now within the reach of everyone. There are a few startups which offer comprehensive support and guidance for buying and financing used two-wheelers in India. You can reach out to these organised players and keep the above factors in mind while buying the bike of your dreams.

(The writer is co-founder and MD, Bike Bazaar. Views expressed are personal)