Too Many Bikes With Too Few Miles

[TooManyBikes]

Several recent posts about the changes in ridership and slow down in dealer sales, prompted me to dig into some market data.

Boat sales slowed down from their heyday in part because the introduction of fiberglass hulls produced boats that did not rapidly wear out. The market became so saturated with used boats priced at such a discount to new boats that eventually new boat sales dramatically reduced. Could the same situation be facing the motorcycle industry?

Consider:

1. For the last 20 years bikes have become more durable with better made with improved manufacturing processes, trouble-free electronic fuel injection, reliable ignition systems, etc.

2. There are now a huge number of used bikes available with many reliable miles still left on the clock (and few visible changes in recent year technologies)

Is this part of the reason people no longer line up at the dealers and wait their turn for a new model bike?

For instance, looking at the inventory of a recent dealer-to-dealer motorcycle auction for 450 street bikes, the average odometer readings were:

Harley Davidson (254 bikes):

0-5 years old = 18K miles with average wholesale book value of $14K

6-10 years old = 41K miles with average wholesale book value of $8K

11+ years old = 46K miles with average wholesale book value of $5K

For other brand street bikes (196 bikes):

0-5 years old = 12K miles with average wholesale book value of $7K

6-10 years old = 22K miles with average wholesale book value of $5K

11+ years old = 39K miles with average wholesale book value of $2K

It appears that many, many bikes have low usage and are much cheaper than brand new bikes since the used bike market is flooded. And current marketing resources such as CL and eBay are diverting a huge sales volume for these reliable, low mileage bikes from the dealer showroom to private party transactions.

My $0.02 on a Saturday morning. What do you think?

Eric

 

[Eagle Six]

Hi Eric,

I think I'm one who would be an example of your thorey. Currently I have 2 bikes, a 2006 Gen1 ZX14 and a 2012 Gen 2 ZX14r. I purchased both of them within the past year. Both were lower mileage than your example of 0-5 years old and both where below the average of 7 grand. There is no Gen 3 in the Ninja ZX14 series as yet to temp me. Both bikes are souped up a bit and both bikes run quit satisfactory and way beyond my capabilities. I do have a the H2 SX SE at the top of my list, but am hesitant to press the trigger on it because it just isn't that much more of a bike than my current ZX14r I purchased for a bit less than 7 grand compared to the 25 grand fully loaded with some extras for the H2 SX SE. I would think many folks with a 1, 2, or 3 gen FJR are sitting in the same slot as me. I would think this isn't the whole reason for the slump in new sales, but I would agree your point is at least in part some of the reasoning. Although, the H2 SX SE just seems like something I should have before I retire from riding.....I've never had a supercharged bike, and I could supercharge one of my ZX14's for far less than a new H2 SX. Nonetheless, the new H2 SX SE, at least for me, sure is a sweet looking ride!!

 

[graler]

Could you sharpen your pencil one more time and try to understand the drop in value of an FJR. Looking at Cycle Trader - not the most reliable source but still a source. I see several discounted 2018s and several new on the floor 2017s those 2017s seem to be demanding a higher price. Maybe that is the paint finish - color. The Matte paint seemed to be a large step not many expected. I also see bikes a couple of years old selling between 12k - 13k (a couple of 2016 ESs come to mind). The value seems to fall pretty quickly until you reach about 8k then they kind of level out - they continue to loose value but not at the fresh off the lot rate.

 

[russperry]

Could you sharpen your pencil one more time and try to understand the drop in value of an FJR. Looking at Cycle Trader - not the most reliable source but still a source. I see several discounted 2018s and several new on the floor 2017s those 2017s seem to be demanding a higher price. Maybe that is the paint finish - color. The Matte paint seemed to be a large step not many expected. I also see bikes a couple of years old selling between 12k - 13k (a couple of 2016 ESs come to mind). The value seems to fall pretty quickly until you reach about 8k then they kind of level out - they continue to loose value but not at the fresh off the lot rate.

I'm now surfing all the channels looking for a '16 ES to replace my '08A. I think there's finally been enough improvements made where it's seeming to make a good upgrade, but it looks like I've got to wait a little if I want to get one under $10k. There is a new '18ES in San Jose (nearby to me) for $15k which is not too much of an adder compared to the used '16 prices, and the lower price seems to reflect other comments that the blue matte paint is not doing too well.

I've seen the same you mentioned for '16ES's - around $13k range for bikes with from 3-18k on the odo. As soon as you go to the '15s you see a pretty good drop, around $10k. I think when they made all the changes in '16 it really bit into the residual values on the '14 and '15's.

 

[Pterodactyl]

We, the "You meet the nicest people on a Honda" generation, are aging out of riding. The guys who had getting a Harley on their bucket list (Gawd I hate that term) got the Harley and it is sitting in a corner of their garage waiting to be waxed or it was sold. Those coming along behind us are simply not into motorcycles to anywhere near the degree we were in our youth. The reasons why are numerous I suspect, but cost, fascination with social media and not buying into the pirate image are a few.

 

[Redfish Hunter]

All good points. Bikes are better now than they ever were, they last longer and run better. Those of us that actually ride our bikes are in the minority, other than the folks I met through this forum I never personally met anyone the even knew what a Saddlesore 1K was.

Regarding FJR prices, the gray '15 did not appeal to everyone. As my friend Fred W used to call it, ***-Fault Gray, is not really popular. It did not help that the '16 model had the LED lighting, that wonderful blue color and the 6 speed transmission that was SOOOO necessary. Those things caused the '15 to collect dust on the showroom floor. I suspect the '18 model is suffering from its "paint" job. I realize it appeals to some but is sure does not appeal to all.

 

[Fred W]

One important point about all of this is that people like us, who actually ride our motorcycles a decent number of miles, are at a huge handicap when it comes to resale. When there are hundreds of nearly unused bikes of the same year and condition sitting in garages across the country, the value of your bike with considerably higher miles takes a big punch in the nose.

My 2014ES is already 4 years old, and has only ~35k miles on it. Even with all of the necessary farkles and in otherwise perfect condition, I doubt I could get more than $7500 for it, this for a bike that was $16k when new. I guess if you decide to rack up some miles on your bike you had better be committed to keeping it for the long haul.

 

[bigjohnsd]

While test riding a Triumph Tiger 800 XCa last week, unbeknown to me, the sales person kindly evaluated my 13 FJR with many farkles and 55,000 miles as a trade. Their valuation was $6K.

Needless to say it is "Worth more" to me than that, I wasn't interested in trading anyway as the Tiger could replace the KLR but not the FJR.