Can I use my car as collateral to buy a motorcycle?

I want to buy a Harley, but I need a loan for it. I also noticed that motorcycle loan rates are higher than car loan rates. Since I own my car outright, can I use it as collateral to buy a motorcycle?

Answer
If you want to buy a motorcycle but want to get a better rate on a loan, you can take out a car loan to use your car as collateral.
As long as your car has less than 100,000 miles and less than 10-years-old, your lender should allow you to take out a loan to buy a motorcycle. Just remember that if you default on your loan, the bank will take possession of your car.
Keep in mind that because the car acts as collateral, you’re going to have to get full coverage auto insurance until you pay the loan off. However, you can save money with a multi-vehicle discount, so make sure to inquire about it while you’re shopping around for insurance.
To get the best rates on your full coverage insurance, shop around with Jerry. By shopping with Jerry, you can compare quotes from up to 50 different insurers to find the best rates possible in just minutes
Eric Schad
Answered on Nov 04, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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