How to Get Out of Motorcycle Loan

What’s up, rider? I know you’re here to find out how to get out of motorcycle loan. Like you, many have had the same problem, and I’ve received emails regarding getting out of a motorcycle loan.

how to get out of motorcycle loan

First Email:


Recently, I managed to obtain a loan for a motorcycle with my bad credit. Unfortunately, my naivety is getting me destroyed on unbearable interest.

It’s 39%, and I want out of this lease without a problem. I confirmed the $9.1k principal payoff still on the motorcycle. The actual price, after the title, taxes, etc., is $12,000. I pay $342 monthly for this motorcycle, not including insurance, and most of it goes towards interest.

What now? I just want out before I lose it!

John James

Second Email:

Some months ago, I purchased a brand new GSX-R600 motorcycle. I made a terrible decision, though.

I took a gap insurance and service plan, and $16,000 was my loan amount for 60 months at the 5% interest rate. My payment is about $230 per month, and I have paid off $1,000 presently.

So far, the motorcycle has 6,000 miles on it. Unfortunately, I’m going back to school and hadn’t planned on returning to school. The payment will be hard on me (in tears).

I’m willing to get rid of my motorcycle loan in whatever way with minimal loss. I understand I’ll take a loss, but I’m hoping for your opinion. Thanks.

Liam, Oliver

Alright, guys! Let’s help fellow riders get rid of loans on their motorcycles with minimal loss. But is it possible to get out of a motorcycle loan? How about the loan terms? Let’s find out how to get rid of a financed motorcycle easily.


Can you return a financed motorcycle?

Somehow, you cannot return a financed motorcycle, except under certain circumstances, including voluntary repossession. The financer expects you to pay off the owed amount, and you are defaulting the deal by returning the motorcycle. Nevertheless, if the financed motorcycle falls under the lemon law, you can return it to the lender.

Meanwhile, can a lender repossess a motorcycle?

How to Get Out of Motorcycle Loan

When you’re stuck in a motorcycle loan, you perceive it as a loss, and it makes you restless.

Let’s see some of the ways to get out of motorcycle loan:

  1. Sell the Motorcycle

You can pay off the full loan amount by selling the motorcycle more than the principal balance. Or, come up with the selling price and loan difference by selling your motorcycle less than the principal balance. Endeavor to pay off the loan immediately after the sale.

Walk out of motorcycle loan

However, you must check with the lender or your jurisdiction to find out whether you can assign the lien to a buyer. They may assist in selling the motorcycle, though. Meanwhile, request how you can get out of the motorcycle loan completely.

When you sell the financed motorcycle, your lender wants all outstanding balance instantly. Moreover, you must clear out the bike loan to sell the motorbike with a clear title. So, determine the balancing act between selling it in the future when the motorcycle loan is not upside down and writing a check plus selling it today.

Prepayment penalties may apply, depending on the agreement. When you do not pay monthly, the lender loses. However, the lender recovers the money through prepayment penalties even you pay off your loan early.

  1. Sell to a Dealer

Some dealerships will handle the paperwork in a motorcycle with a lien. They already understand the situation and are not scared whether you’re playing games, such as selling them a stolen vehicle without the title.

The setback, selling to a dealer, is that they may pay less than a private buyer will.

Also, take note of the prepayment penalties that may apply and understand that you can only sell the motorcycle with a clear title after paying off your loan.

  1. Obtain a Loan

The second suggestion is to get a loan and buy out the motorcycle with the leftover value.

how to get rid of a financed motorcycle

The loan should have far lower interest rates compared to your current rates.

If you owe more on your loan than the financed motorcycle’s value, you are upside down on the loan or negative equity.

Typically, it happens when your motorcycle is involved in an accident or other damages. In this regard, it is advisable to keep your financed motorcycle till you pay off the loan and regain some equity. If you sell it, you must cover the negative balance on loan.

  1. Refinance Through Other Means

Depending on your jurisdiction and lending terms, you can refinance the motorcycle through other options. However, other finance companies may request additional collateral to approve the loan.

A typical motorcycle depreciates, except it becomes vintage many years later; so, you must know the finance company’s motorcycle value and the motorcycle retail price.

Most of the time, the finance company’s wholesale or reduced value is lower than the principal. So, it becomes difficult to refinance the motorcycle as the only collateral.

You may go to the bank, credit union, etc., for a friendlier loan, and the interest rate may reduce by over a half.

Typically, a good rate on a motorcycle is 6% or lower over 36 months.


Can I sell my motorcycle if its on finance?

Yes. You can sell your motorcycle if it’s on finance. However, if you do not know what you’re doing, you risk losing money. Contact a local motorcycle dealer to advise you on the steps to follow to sell a financed motorcycle or a knowledgeable motorcycle owner. Endeavor to refer to the terms governing the loan to know your actions.

What happens if I don’t pay my motorcycle loan?

If you don’t pay your motorcycle loan, the lender can repossess the motorcycle through the repo. The repo man also has the right to enter your property and retrieve the motorcycle but can’t break into your garage. If you hide a financed motorcycle from your lender, they can accuse you of stealing it and file a lawsuit compelling you to surrender the motorcycle.

Final Thought

If you like the financed motorcycle, you can always buckle down and pay off the loan.

Be careful what decision you make because it can throw you into financial difficulties. Like I suggested earlier, review the loan terms and share your inconvenience with a local dealer or us.

I hope with the suggestions, you can better decide how to get out of a motorcycle loan with minimal loss. Meanwhile, can you return a motorcycle after purchase?

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