A motorcycle is a great investment. Keep in mind that the purchase price of a bike can be anywhere between $5,000 to $20,000 depending on the make and model. But the question arises, considering the machine’s initial value, how does it depreciate?
Most folks know that motorcycles are one of those machines which are in demand but easily lose their value. One good example is the Harley Davidson Sportster. The bike starts at $10,000 and according to some, can hit 30 miles per hour in under five seconds. Still, this Harley is an example of depreciation. It’s easy to see why they say that bikes lose their value easily when you take a look at their performance capabilities. It takes a long time before it hits top gear.
What is the depreciation rate on a motorcycle?
According to the ‘BikeSocial’ page on Bennetts, a brand-new motorcycle’s value drops nearly 20 percent during the first two years of ownership, and this figure doesn’t even include mileage or overall condition. The reason behind this is the need for new replacement parts.
In the case of Harley Davidson, the Sportster variant has a depreciation rate of 18.8 percent while bikes of other makes and models depreciate at an average figure of 20 percent per year.
Apart from this, mileage plays a major role in how a basic motorcycle is valued. The fuel efficiency, overall condition, and maintenance costs also play a pivotal role in its value. For example, a bike with high mileage is valued less than one with low mileage, and a brand-new bike will have higher depreciation rates than an old bike with higher mileage.
Even though there is a large difference in prices between bikes of different models and make, you can still do a quick calculation by averaging the approximate prices of bikes of similar performance and mileage.
If you are considering investing large amounts of money in a bike, then it is better to first opt for one which has a depreciated value or the lowest price tag. You might even get lucky with an old bike that has very less mileage, or at least it will have lower depreciation rates than some out there who have more mileage.
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How much is my motorcycle worth years down the road?
As we all know the price goes up and down on any product or item but when it comes to the age and make of a motorcycle, it does not change much. The older a bike gets, the cheaper it usually is. And if you are looking for something which you do not have to worry about keeping up with its maintenance and fuel consumption cost then get an old bike instead or better yet buy a car that matches your needs.
Factors That Contribute to motorcycle Depreciation
Several factors contribute to the depreciation rates on motorcycles. These include the age of the bike and the mileage. The first and foremost is the age of a bike because it represents how long it has been in use.
A bike that is used for short distances will be noticed to be in better condition than one which has been used for long periods of traveling purposes or for commuting to work. The condition or appearance of a bike also contributes significantly towards its value, especially if you are seriously looking at buying one which is either used or new.
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The factors are discussed below in detail.
- Vehicle condition: This is important for you if you are looking to buy a used bike. If the condition of the bike is not good, then it will decline in value. On the other hand, if the condition of the vehicle is relatively good then its value will remain or even increase.
- Mileage: This differs according to various makes and models. It does not matter whether your motorcycle is new or used. The exact mileage will affect the value of the motorcycle. New bikes have a depreciation rate of 20 percent, while older bikes depreciate at a rate of 18 percent. It’s important to note that the mileage doesn’t usually reflect the actual condition of a bike in addition to its function. High mileage is often accompanied by poor maintenance and fuel consumption, causing it to depreciate faster than others.
- Proper Maintenance: Proper maintenance is an important factor to consider when it comes to the value of a motorcycle. But this is only applicable if you are going to buy from a reliable dealership. If you buy from a mechanic, then remember that the value of your bike will go down because of faulty repairs and mistakes done in maintenance.
- Vehicle modifications: Usually, people modify their bikes to make them stand out and look unique. But the problem with this is that modifications are not functional. A few mods and upgrades might improve performance but they may also decrease the market value of your bike.
- Seasonality: The value of a motorcycle goes down when it is during the off-season. This means that you will be having a difficult time selling your motorcycle because there are hardly any buyers.
- Rarity: Very few motorcycles come up for public sale at times. So when you are looking to find a motorcycle that you can sell, you must check if it is on the market or not.
- Several owners: The more owners a motorcycle has, the less its value will become. This is because the bike has too much mileage which means that it has been used for long periods. The number of extra features also decreases the value of a motorbike.
- The number of accidents: Motorcycles that have been involved in an accident have several damages to the body and internal components. This affects the value of a bike, especially if it has been damaged more than one time.
What are the advantages of buying new vs. used motorcycles?
There are many advantages to buying both new and used motorcycles. However, the one that is most commonly overlooked is that you don’t have to spend a lot on a new bike. You might spend more compared to buying a second-hand one but that’s because it’s still relatively new and has several features. Other than this, the difference in value between the two types of bikes doesn’t go beyond $200 – 300.
This means that if you are looking for something cost-effective then a used motorcycle is better than an expensive new model. It will give you financial freedom which you can use to buy other things. This can also be a great way to save up for your kids’ college education. But if you are looking for something luxurious, then a new model will suit your needs.
A motorcycle is a great investment. Keep in mind that the purchase price of a bike can be anywhere between $5,000 to $20,000 depending on the make and model. But the question arises, considering the machine’s initial value, how does it depreciate?
Most folks know that motorcycles are one of those machines which are in demand but easily lose their value. One good example is the Harley Davidson Sportster. The bike starts at $10,000 and according to some, can hit 30 miles per hour in under five seconds. Still, this Harley is an example of depreciation. It’s easy to see why they say that bikes lose their value easily when you take a look at their performance capabilities. It takes a long time before it hits top gear.
