Are you about to pay too much for a classic bike? Many factors determine a good price. Unlike new models, the price of used bikes can vary considerably.
Of course, it is tempting to throw logic out the window when you find a bike that makes your heart race. And let's face it: sometimes your heart rate will be the determining factor. But if you're concerned about practicality, it is essential to do a little research when considering purchasing a classic motorcycle.
Among other things, the savvy purchaser must consider resale value and price trends for the make and model in question. The following is typical of other factors that affect value:
Location. Every time you find a bike you might be interested in purchasing, you will have to weigh the traveling cost to view it. Also consider if shipping costs are a factor.
It's pretty unlikely that you will find the exact make/model of a classic motorcycle in a nearby location and at the right price.
Price trends. Is the market value of the bike stable, rising or decreasing? You might be able to find out by conducting an extensive Web search.
Repair costs. What work will be required to make the bike acceptable? Do you want to get it into riding shape or make it museum quality?
Provenance. Does the existing owner have the correct paperwork? Don't end up with a stolen bike! Make sure the chain of ownership is clear.
Purpose. Is the purchase being made as an investment, or for riding pleasure? Do you intend to restore it, or not?
Although you may be very knowledgeable about a given make or model, you will be tempted to purchase the first example you find if it looks good. This is particularly true where rare machines are being considered. If this is the case, you will almost certainly purchase a bike that is too expensive or in poor mechanical condition - possibly both. Buyer be warned!
Parts. Are spare parts readily available? You'll want to avoid the nightmare scenario of discovering the parts you need have to be made by hand-and will cost more than you paid for the bike!
Rarity. How many are on the market?
To decide your maximum, you must:
Establish, from research, the current market value (both Nada and Kelly Blue Books give values for older machines).
Get prices for all common replacement parts and approximate time to complete the repair.
Estimate the how long you intend to keep the bike, and the price trend (if it's going down, don't pay today's price).
To put this into real numbers: Assume a classic motorcycle has a current market value of $1000. It is in excellent condition but needs new rear shocks ($200 fitted), a new chain and sprocket set ($185 fitted). This bike is three hundred miles away. With shipping or collection costing $120, the potential owner will be out of pocket $1505.
Therefore, he must consider if the bike is worth over 50% more than the current market value. If the price trend is up, how long will it be before the bike is worth $1500?
The one favorable aspect of purchasing a classic bike is the fact that most appreciate in value. As an investment, you will usually get your money back with a small (in most cases) increase. However, unlike stocks and shares, you will have the pleasure of riding this investment.