Bike Buyer Guru: what is your bike worth?
Craig Langton has quite the CV. Here at The Bike Show we refer to him as King Midas because, as you might’ve guessed, everything he touches turns to gold. Apart from previous businesses that were massively successful under his watch, he is the owner of Fire It Up in Fourways and within a year of opening its doors it has become the biggest selling motorcycle dealer in the country by a long way. Much of this is down to good honest hard work by him and his team, but much of it also has to do with decades of dealing in motorcycles, spotting trends and noticing nuances. Craig will be passing on much of this knowledge to our esteemed readers in his regular Bike Buyer Guru column. Herewith this week’s column:
Your motorcycle is worth what the market will pay for it at any given moment, that is what it is worth.
Unfortunately, it is never how much you paid for it and although you may have fitted many accessories, the value of these can never be recovered but they will certainly add value to the desirability of your motorcycle. Motorcycle worth varies according to market demand, stock availability, manufacturer specials and competing brand specials. In fact, there are so many variables that affect the worth of your motorcycle at any given time and in this article, I will try and cover the most important ones.
In South Africa there is a ‘trade book’ or guide which offers ‘suggested’ values of most motorcycles. The ‘trade value’ is a guide as to what the dealer should pay for a motorcycle that can be wheeled onto the floor with no repairs/service required and a suggested ‘retail value’. Although these book values are recognised by the banks and insurance companies, the values obtained rely on the manufacturers supplying values to the authors of the‘book. Unfortunately, not all manufacturers supply information or are given information by dealers and therefore the ‘book values’ are rarely accurate according to what the market is paying and selling stock. This book should be used as a guideline only. Some brands are attracting prices higher than book value and some far lower.
An example of this is that ‘book’ trade value on a 2008 Suzuki VZR1800 is around R64 000. In reality these bikes are trading or being bought at about R80k to R85k and selling for R99000 due to customer demand and therefore ‘book’ value should reflect the same. Unfortunately, some manufacturers/importers do not disclose their ‘trade’ values, leading to speculation on their brand values which could affect your motorcycle’s value. The ‘book’ and its integrity is unfortunately brought into question.
In most other countries, Trade and Retail values are increased/decreased as the demand for used motorcycles increases or decreases according to market conditions. I also find the values are incredibly accurate. The books are independent and not reliant on manufacturer/importer input.
Other factors that affect the value of your bike are as follows:
- Mileage – Mileage is a tricky one because a potential customer looking to purchase a bike would expect to consider 30,000 km on an adventure or touring bike but if the same mileage is on an exotic Italian bike a customer would prefer to look for one with lower mileage unless the price is substantially lower. Even though both bikes can arguably travel the same mileage, the perception to customers is very different and therefore pricing is affected.
- Manufacturer Campaigns – If a manufacturer of a brand decides to drop the new retail price of a motorcycle by up to R50,000, then not only are you affected if you own that motorcycle but also if the bike you are trying to sell competes in the same category. As an example, a popular commuter normally retails for R115 900, the price is then dropped to R89 900 as the manufacturer clears stock. This obviously affects the models that were sold earlier that year at R115 900 as they now will attract a to retail of R79 900 depending on mileage. This also influences all the other brands in the same category. If you own a competing brand that was also R115 900 new and are now selling it at R89 900 as a used model, your bike is also affected as potential buyers can choose between your bike and a brand new one.
- Condition – take the time to detail your bike including tyres, a detailed bike always attains a higher value than a dirty one with worn tyres. Even a dealer will pay more.
- Model Change – When there is a model change from say 2017 to 2018 and there are significant changes, there will always be an oversupply of 2017 stock which supply dealers might be hesitant to purchase or might be selling at a discount price to clear. This affects your value so shop around when selling or buying between models or years.
- Brand Confidence – Consumers may find more confidence in a Japanese brand or European brand that is well supported with a wide dealer/service network compared say a smaller brand that is not as well supported. The brand with the smallest share might attract a lower resale value.
- Stock Availability – As soon as there is a short supply of desirable stock, the value increases much the same as if there is an excess of stock supplied into the market values decrease.
- Dealer Values – If the selling dealer gives you an indication of what your bike is worth and then goes on to say they he is not allowed to purchase stock or that they have too much stock etc, it might stand to reason that the selling dealer does not want to perhaps disappoint you with how much your bike is worth only months after selling it to you. Take your bike past many dealers including independents who rely on used stock and you will quickly get an indication of what the market is willing to pay.
- Private Stock For Sale – Do not base the value of your bike on what is being advertised privately, many of these motorcycles do not end up selling at the price advertised or selling at a price far less than advertised. Have a look at what dealers are retailing their stock for. Take an average of all the equivalent bikes advertised for sale by dealers that are like yours and you will get an idea what the retail price of your bike is.
- Year Model – As soon as a bike is older than 10 years of age, major finance companies will not finance the motorcycle irrespective of condition or mileage. This has a significant effect on the value of the motorcycle as 60% of buyers finance their motorcycles. Some dealers will not even purchase these bikes as they are difficult to resell.
- Price Point – If your motorcycle falls into a popular price point which varies, it will attract a higher value to dealer as it will sell quickly. If the motorcycle falls into a bracket that is higher than majority of the motorcycle market can afford the dealer will offer less as he will have to hold the stock for longer and incur the interest.
In closing, establishing a value for your motorcycle should always be done with a bit of research – call around and see what various dealers are offering. Before considering selling your motorcycle look out for “PART 2” next week where I chat about selling your motorcycle.