How to get the best deal when buying a bike with cash

By Réhann Coetzee

Actually, you might not get a much better deal from a dealer if you want to buy a motorcycle with cash instead of with bank financing.

Although this sounds strange, it can be easily explained. A motorcycle dealer will have a relationship with more than one bank and those banks want the dealership to refer buyers to them so that they can get new business that way. And for that, the bank will pay the dealership what is known as DIC – dealer incentive and commission.

So, not only will the bank give the money for the bike you’re buying, it will also pay the dealership a commission for bringing the bank new business. The commissions vary from one dealership or bank to the next, but it makes it really worth it for the dealership – and the sales person – to go to the effort.

There is very little incentive for the dealership to rather take cash from the buyer. It is not as if the dealer can take the cash “underneath the table” to cheat on taxes, because there is an extensive paper trail for each transaction. The only incentive for the dealer would be in knowing that the buyer does not have to go through a credit-vetting process that might scupper the deal.

Of course, when you’re buying a bike from a private seller, this is a completely different story. Banks are not always happy to finance a “private-to-private” deal and therefore you have to jump through quite a few hoops to get such an approval.

If you have the cash, you can prove this to the private seller and offer to make an immediate payment via an electronic transfer. Offering a quick deal to the seller could make it possible to get a reduction in the asking price.