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Two Wheeler Loan

New vs. used bike loan: Which one should you choose?

Key Takeaways

  • New bike loans are often standardised across lenders, used bike loan terms vary widely.
  • Ownership transfer is a critical step in used bike loans, which does not apply to new ones.
  • The total cost of ownership, including loan terms, resale potential, and maintenance, should guide your decision, not only the EMI.
03 Jun 2025 by Team FinFIRST
used bike loan
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Thinking of purchasing a bike but cannot decide if you should take a loan for a new one or a used one? It is a practical concern, especially when both options seem to offer the same end result, i.e., owning a two-wheeler. But the type of loan you choose can affect much more than just your monthly instalments. It shapes how much you spend as a down payment, how long you stay committed to repayments, and how easily the loan fits into your routine expenses. 

Let us take a closer look at both loan options to help you make a decision that supports your financial priorities.

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What is a new bike loan?
 

A new bike loan enables you to finance the purchase of a new two-wheeler directly from the showroom. Most lenders cover up to 90–95% of the bike’s on-road price, which makes it easier to get started without a large down payment. You can repay the loan via fixed monthly instalments, with flexible tenure options usually ranging from 6 to 48 months. 

What is a used bike loan?
 

A used bike loan, also known as a pre-owned or second-hand two-wheeler loan, helps you finance the purchase of a bike that has had one or more previous owners. Although the principal loan amount is lower because of the depreciated cost of the bike, interest rates might be slightly higher, and lenders may request extra documents such as the RC book.

Advantages of new bike loans
 

A new two-wheeler loan benefits you in multiple ways:

Benefit

Description

New bike

No prior use, clean engine, and manufacturer-backed coverage.

Lower chances of loan 

rejection 

New bikes are often viewed as safer assets, which increases the chances of your loan getting approved.

Better loan terms

Lower interest rates and longer repayment periods.

Latest features

Modern technology, good mileage, and advanced safety features.

Advantages of used bike loans
 

The benefits of used two-wheeler loans include:

Benefit

Description

Lower loan amount

Smaller EMIs and less financial burden.

Reduced insurance cost

Since older bikes have a lower Insured Declared Value (IDV), insurance premiums tend to be lower.

Affordable for first-time buyers

Suitable for those with limited budgets or short-term usage needs.

Minimal depreciation risk

The vehicle has already depreciated, so its value stays more stable during ownership.

A two-wheeler loan EMI calculator helps you plan repayments better by showing potential monthly payments based on the loan amount, interest rate, and repayment duration.

Should you go for a new or used bike loan?
 

A new bike loan might be ideal if:

  • You prefer starting with a bike that has no prior usage history.
  • You are looking for quicker loan approval with fewer ownership-related checks.
  • You plan to keep the bike for the long term and want stable performance throughout.
  • You want factory warranties, new tyres, and a fresh engine.   

A second-hand bike loan could be ideal if:

  • You are looking for short-term usage only.
  • You want to keep your total spending low while still owning a bike.
  • You wish to buy a premium bike that may have been out of budget if bought new.
  • You are new to biking and want to gain confidence before purchasing a new model.

Closing note
 

The final decision between a new and used bike loan depends on whether you value long-term reliability, affordability, resale potential, or short-term usage. A new bike loan offers better financing terms, first ownership, and consistent performance over time. A used bike loan may work for you if you prefer to keep costs low or have found a good deal on a pre-owned model.

You can consider IDFC FIRST Bank Two-Wheeler Loan solutions for both used and new vehicles. Benefit from competitive interest rates, quick processing, fast disbursals, zero hidden charges, flexible repayment options, and a 100% digital process for a stress–free borrowing experience.

So, what is the wait for? Apply for a two-wheeler loan today!

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirstbank.com for latest updates.

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