North America Motorcycle Loan Market By Type (New Motorcycle, Used Motorcycle), By Tenure (Less than 3 Years, 3 & More than 3 Years), By Provider (Banks, NBFCs, OEM, Others (Fintech Companies, etc.)), By Country, Competition, Forecast & Opportunities, 2020-2030F

Market Overview

North America Motorcycle Loan Market was valued at USD 21.40 billion in 2024 and is anticipated to grow USD 30.73 billion by 2030 with a CAGR of 6.28% during forecast period. The North America motorcycle loan market is witnessing significant growth driven by increasing consumer demand for motorcycles, particularly in the United States and Canada. A shift towards personal transportation solutions, along with rising disposable incomes and favorable financing options, is contributing to market expansion. While the U.S. provides some of the most attractive incentives for electric vehicles globally, the electric motorcycle market remains a niche segment. However, the first half of 2024 witnessed a significant 55% increase in electric motorcycle sales, signaling a rising interest in this category. Although still in its early stages, this trend suggests that electric motorcycles could gradually gain a larger market share as technology advances and consumer awareness continues to expand.

Financial institutions and lenders offer a variety of loan terms, making motorcycles more accessible to a broader demographic. Additionally, the growing popularity of motorcycles for leisure activities and commuting is boosting sales. The market also benefits from the development of online loan platforms, offering convenience and better customer experience. Factors like improved credit availability continue to fuel market growth.

Key Market Drivers

Growing Consumer Interest in Motorcycles

One of the leading drivers of the North America motorcycle loan market is the growing interest in motorcycles. Both the United States and Canada have seen an increasing number of consumers embracing motorcycles as an affordable, efficient, and eco-friendly mode of transportation. Motorcycles are becoming particularly attractive due to their affordability compared to cars and other types of vehicles. This surge in demand is not only from traditional motorcycle enthusiasts but also from individuals looking for alternative means of transportation, particularly in congested urban environments. As motorcycles are perceived as a cost-effective solution for daily commutes or recreational activities, more consumers are seeking financing options to make the purchase feasible. This trend is particularly visible among younger generations, who are increasingly turning to motorcycles due to their lower initial costs, fuel efficiency, and ease of parking. Although the start of 2024 appeared unremarkable, the industry experienced a modest rise in sales, reaching 323,091 units by mid-year, marking a 0.9% increase compared to the previous year. Several factors have contributed to this market growth.

Favourable Financing Options and Terms

Another major factor driving the North America motorcycle loan market is the availability of favourable financing options. As financial institutions and lenders recognize the growing demand for motorcycles, they have tailored their loan offerings to make it easier for consumers to acquire motorcycles. Lenders offer a variety of flexible terms, including low-interest rates, longer repayment periods, and customized loan packages that cater to diverse consumer needs. The competitive loan rates and minimal down payment requirements are making motorcycles more accessible to a broader range of buyers. Additionally, many dealerships offer in-house financing, which simplifies the purchasing process and reduces the burden on customers who may have limited access to traditional bank loans. As a result, consumers are more willing to finance motorcycle purchases, leading to an increase in the overall market size.

Rising Trend of Personal Mobility

In the wake of changing transportation preferences, the trend toward personal mobility is another significant driver of the motorcycle loan market in North America. The COVID-19 pandemic has further emphasized the need for individuals to find safe, private means of transportation. With social distancing measures in place, public transportation options were less attractive, prompting many people to consider motorcycles as an alternative. Moreover, the increasing concerns around environmental sustainability and fuel efficiency have driven people toward two-wheelers, as they are generally eco-friendlier and more fuel-efficient than traditional vehicles. Motorcycles not only provide an individualistic mode of transport but also serve as an affordable and practical choice for daily commuting, especially in cities where traffic congestion is prevalent. This preference for personal mobility solutions is expected to continue driving demand for motorcycle loans.

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Key Market Challenges

Credit Risk and Loan Defaults

One of the primary challenges facing the motorcycle loan market in North America is the risk of loan defaults. Lenders face difficulties assessing the creditworthiness of motorcycle buyers, especially in a market where many customers are first-time buyers or have lower credit scores. Consumers with limited credit history or poor credit may face difficulties securing loans, which can increase the risk for lenders. As more people turn to motorcycle financing, especially among younger demographics and those with non-traditional credit histories, there is an elevated risk of defaults. This can lead to a higher rate of delinquency, which ultimately impacts lenders’ profitability and market stability. In response, lenders have to carefully manage risk by tightening their loan eligibility criteria, increasing interest rates, or requiring larger down payments, which may make financing less accessible for some consumers.

Increasing Competition from Alternative Financing Sources

Another challenge is the growing competition from alternative financing sources, such as peer-to-peer (P2P) lending platforms, buy-now-pay-later (BNPL) services, and online lenders. These alternatives are becoming increasingly popular due to their convenience, flexible repayment terms, and often lower interest rates compared to traditional financial institutions. Motorcycle buyers, particularly younger consumers who are accustomed to digital financial services, may opt for these alternatives over conventional bank loans, potentially reducing market share for traditional lenders. Online lenders and P2P platforms often leverage technology to provide faster approval processes and more personalized financing options, which appeal to customers looking for a seamless experience. As such, motorcycle dealerships and traditional lenders must adapt to the evolving landscape of financing solutions to remain competitive and continue attracting customers.

Key Market Trends

Increasing Demand for Digital Financing

One of the most prominent trends in the North America motorcycle loan market is the growing preference for digital financing. As consumers become more accustomed to online services, the demand for digital loan applications and approvals is rising. Online platforms allow consumers to apply for motorcycle loans with ease and speed, providing greater convenience than traditional in-person banking. Lenders are increasingly using technology to streamline the application and approval process, with some offering fully online services that allow borrowers to apply, get approved, and manage their loans from their smartphones or computers. Moreover, digital lenders often offer competitive rates and more flexible terms, which appeals to a broader range of customers, including younger generations who are familiar with online shopping and digital payments. This trend is expected to accelerate as both consumers and lenders embrace the ease and efficiency of digital financial services.

Rise of Motorcycle Leasing Options

Motorcycle leasing is another trend gaining traction in the North American market. Traditionally, consumers who wanted to ride motorcycles would opt for purchasing, either through outright payments or financing. However, leasing options are now becoming increasingly popular. Motorcycle leasing allows consumers to ride a motorcycle for a fixed period, typically two to three years, and at the end of the lease term, they can either return the motorcycle, buy it at a residual value, or upgrade to a newer model. This flexible approach to motorcycle ownership appeals to consumers who want to enjoy the benefits of owning a motorcycle without the long-term commitment. Leasing also allows customers to manage lower monthly payments, as they are not financing the full price of the motorcycle. As motorcycle models and technology continue to evolve, leasing becomes an attractive option for those who prefer to switch motorcycles more frequently or do not want to deal with the depreciation of the vehicle.

Segmental Insights

Type Insights

New motorcycles dominated the North America motorcycle loan market due to their appeal to first-time buyers and enthusiasts seeking the latest models with advanced features and technology. Consumers are increasingly inclined to finance new motorcycles as they offer warranties, better fuel efficiency, and enhanced safety features compared to used models. Additionally, motorcycle manufacturers often provide promotional financing offers for new bikes, making them more accessible to a broader audience. The higher demand for new motorcycles drives a significant portion of the loan market, with buyers opting for financing options to manage the cost of these premium, high-performance vehicles.

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Country Insights

The United States was the dominating region in the North America motorcycle loan market, driven by its large consumer base and a strong preference for motorcycles as both transportation and recreational vehicles. The country’s well-established financial institutions offer a wide range of loan products, making motorcycle ownership more accessible. Additionally, the U.S. benefits from a robust infrastructure for motorcycle sales, including dealerships and online platforms, which further fuels demand. Rising disposable incomes, the trend toward personal mobility, and the popularity of eco-friendly motorcycle options contribute to the United States leading the market in terms of loan volume and consumer adoption.

Recent Developments

• In Oct 2024, RideNow has partnered with Octane to launch RideNow Finance, a digital financing platform aimed at simplifying the motorcycle purchasing process by providing easy access to personalized financing options for customers.

• In Jan 2024, Synchrony and Ally Financial have reached an agreement for the sale of Ally’s point-of-sale financing business. This deal will enhance Synchrony’s consumer financing capabilities and strengthen its position in key markets.

• In Sep 2024, Bank of America (BoA) is expanding its presence with the opening of new branch locations across the U.S., responding to consumer demand for accessible financial services. The expansion is part of the bank’s strategy to improve customer experience and increase engagement in high-growth areas.

• In February 2024, Harley-Davidson Financial Services introduced Harley-Davidson® Flex Financing, a new loan option offering flexible motorcycle purchases. This option combines attractive monthly payments, shorter terms, and flexibility, with the added benefit of returning the motorcycle at the end of the term, similar to a lease.

Key Market Players   

• Ally Financial Inc.
• Wells Fargo & Company
• JPMorgan Chase & Co.
• Bank of America Corporation
• TD Bank, N.A.
• American Honda Finance Corporation
• Harley-Davidson Financial Services
• The Kawasaki Motors Corp., U.S.A.
• Mountain America Credit Union
• Yamaha Motor Finance Corporation, U.S.A.

Report Scope:

In this report, the North America Motorcycle Loan Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• North America Motorcycle Loan Market, By Type:

o   New Motorcycle

o   Used Motorcycle

• North America Motorcycle Loan Market, By Tenure:

o   Less than 3 Years

o   3 & More than 3 Years

• North America Motorcycle Loan Market, By Provider:

o   Banks

o   NBFCs

o   OEM

o   Others

• North America Motorcycle Loan Market, By Country:

o   United States

o   Canada

o   Mexico

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the North America Motorcycle Loan Market.

Available Customizations:

North America Motorcycle Loan Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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