The value of a new motorcycle can fall at an alarming rate, although this varies significantly from one model to another. The prominent reason why your motorbike value is probably low is depreciation. To find out how well your motorcycle will hold its value, you will need to thoroughly comprehend depreciation and know how to cleverly maneuver so that your bike does not depreciate in value at a very drastic rate.
What is depreciation?
Depreciation is the difference between a motorcycle value when you initially buy it and when you sell it or trade it in. Most motorcycle owners have no clue why their bike value is so low. This article is brief but detailed explanations that will help every bike owner understand why depreciation is a reality and how to deal with it.
Reasons why motorcycles depreciate very fast
– The new model year factor
Once a newer model is introduced, anyone interested in the new version will consider your motorbike old. New gadgets, new features and the new functions of the upgraded model drastically reduce the value of your bike. It is all about desirability; the more recent the model of your motorbike, the better it holds its value.
– A new motorcycle is automatically considered used once the purchases from a dealership
There are two types of motorcycle buyers; new buyers and used buyers. Once you drive a car off the lot, it ceases becoming new and you also narrow down the number of buyers willing to purchase it at a reasonable price. Here are some problems you are likely to face once your motorcycle is ranked as used.
– Dealers are not willing to pay more then they can get for another used motorcycle elsewhere
– Used buyers unlike new car buyers will not pay highly inflated prices; they will go for the lowest bargain possible.
– Motorcycles depreciate because they are an asset that wears out over time
As you use your motorbike, the probability of incurring increased maintenance and repair costs in the future rises hence the value drops significantly. Reasonably speaking, would you buy an old and worn out motorcycle or parts at the same price as new ones? Of course not, because the vale has diminished. Depreciation is what accounts for the diminished value. Overtime, motorcycles will depreciate all the way to the value of the raw materials (basically the price of metal).
A brief look at factors that affect motorcycle depreciation rate (reduction in value)
– Mileage; the more miles your motorbike covers, the less it is worth.
– Reliability: this is tied to reputation; cars that have a reputation for unreliability lose value quickly.
– General condition; any damage or wear and tear to the exterior, interior and to the body work of a motorbike will lower its value.
– Service history; the more complete the service history, the better the value of your motorbike. If you want to boost the value of your bike, you need to have service books with receipts and stamps which serve as evidence that you have adhered to the manufacturer’s recommendations.
– Luxury and standard models; luxury motorcycles depreciate in value more than standard bikes. This is typically because they are more expensive to run, very expensive to maintain and the spare parts are rare, inaccessible and also quite pricey.
– Effective Tips maintaining the value of your motorbike (reduce depreciation value)
To ensure your motorbike does not lose value at an alarming rate, do your research. Ensure you purchase a relatively desirable model that would still be desirable to next buyer. If you can’t go for a new motorcycle, strive for a nearly-new one to avoid steep depreciation.
– Ensure you maintain your motorbike
A full service history will give the next buyer peace of mind. So remember to safely preserve all your documents. It will come in handy in proving that your motorcycle is still in good condition. Essentially, look after your motorbike and repair any damage you notice as soon as possible.
I am sure you are wondering how? Simple! You will ensure you own a motorbike with value by selling your motorcycle before its replacement value arrives in showrooms. This way your bike can fetch a reasonable price in the used-market.
If you are trying to resale your motorbike, here are some tips that will come in handy
1. Ascertain the value of modifications
There are many people who will pay an extra buck for your motorbike if you customize it to meet their tastes and preferences. Be very careful because different buyers have a different idea of perfection. Actually, in most instances, you will get more money by removing the accessories and selling them separately.
2. Enter the used-market expecting low offers
Keep in mind that the person buying your bike or bike parts in this scenario is just trying to save a buck or two. Try and divorce your emotions from the offer and instead focus on pointing out the things that make your bike shine.