- 1 Do motorcycles depreciate faster than cars?
- 2 What is Depreciation?
- 3 Factors that play into car depreciation
- 4 Factors that play into motorcycle depreciation
- 5 The Pros You Get With Buying A New Motorcycle
- 6 The Pros You Get With Buying A Used Motorcycle
- 7 Conclusion
In this article, we’re going to answer the age-old question: “Which depreciates faster: a motorcycle or a car?”
Actually, that’s not an age-old question at all. But it’s a nice way to start an article, so we’re keeping it.
Do motorcycles depreciate faster than cars?
Shortest answer: Depends.
Short answer: Motorcycles in the west, especially in the United States, are used much more for recreation than they are for commuting. This is especially true when pitting the stats against those of developing countries like India’s.
Since demand drives manufacturing output, “normal” commuter bikes are going to depreciate faster than cars. Americans get to work on 4 wheels. Not 2.
However, the opposite is true for luxury motorcycles. As in adult toys bought specifically for the fun factor. Factors such as:
- The latest fads
- Captain America in that one scene
- Wanting the bouncer at your local bar to think you’re badass
make luxury motorcycles cost more.
It’s why a 30-year-old Harley will burn a much bigger hole in your wallet than a 30-year-old Lexus.
Long answer: Well, that happens to be in the rest of this article.
Because in this article, we’re going to tell you about how cars and motorcycles depreciate over time, and what you should know as a motorcycle rider planning to buy or sell used motorcycles.
What is Depreciation?
If you don’t know what depreciation is, we wrote this section for you in particular.
The origins of the modern-day concept of depreciation are very interesting. It goes way back into the 19th century. At the time, trains were all the rage for both travel and commercial transport. So the large railroad companies at the time collectively decided that their profit wasn’t large enough, and devised a genius strategy for increasing their revenue.
The plan was such that the cost of laying train tracks and building new ones wouldn’t be subtracted on an annual basis. Instead, the amount calculated would tie directly into how much those assets were “used” each year. When compounded, this made them far more money.
Evil. But genius. And the legacy of this evil genius still remains.
Such as in the context of this article: your vehicle’s depreciation defines how much of its value you’ve used over time. Regardless of whether said vehicle runs over 4 tires or 2.
To make it more clear: depreciation represents how much of an asset’s value has been used up. It’s an accounting method that allocates the cost of your car or motorcycle over its life.
Factors that play into car depreciation
- Your car’s accident data which consists of its accidents history, damage severity, area of damage and structural damage.
- Your car’s service history which consists of its oil changes, tire rotations, any replacements and safety inspections
- The reason you use your car:
- As a personal vehicle
- As a rental
- For lease
- For commercial purposes
- Using it as a taxi
- Using it as a police vehicle
- Your car’s ownership history, such as the previous number of owners, the areas it was owned in, how long it was owned for and the last reported mileage.
Factors that play into motorcycle depreciation
- The production numbers by the manufacturers. Makes and models that have very low production numbers, such as the models by Moto Guzzi, would sell for far higher.
On the other hand, companies such as Honda that make large numbers for each model are going to sell them at lower costs.
- Your motorcycle’s condition, including stuff like scratches, dents, oil buildup, routine maintenance are going to make the bike sell for lower.
- Your motorcycle’s accident history consists of its accident history, damage severity, area of damage, and structural damage.
- Motorcycles that have been in famous movies or shows, like Captain America’s Harley, or James Dean’s Triumph Trophy 500, aptly named “Dean’s Dilemma.”
- Your motorcycle’s ownership history has a huge effect. Years 1 and 2 take the biggest hit. Depreciation averages about 5% per year for years 3-10.
The Pros You Get With Buying A New Motorcycle
The systems are more modern
New motorcycles have updated and modern mechanical systems that can ultimately make your riding experience a little safer.
Technology is improving exponentially. Correspondingly, so are safety measures. Manufacturers nowadays have to go through tests upon tests by certified authorities before they can put them on the market. Any motorcycle you get, brand new- you’re guaranteed by verified, legal authorities about how safe they are to ride. This includes:
Every single motorcycle nowadays comes with ABS. Anti-lock disc brakes supervised by an electronic safety system to ensure tires and wheels not locking/skidding despite how hard you hit the brakes.
New motorcycles come with fuel injection systems that function much better than carburetors.
Compared to carburetors, fuel injection systems provide a much more accurate amount of fuel. This results in easier engine starting, smoother throttle response, adaptation to a wider range of temperatures, and a cleaner exhaust.
Improved fuel economy.
Although new motorcycles cost more, one area where they’ve got used motorcycles beat is the fuel economy area. You’re going to save a lot more money over the long-term when you factor in the amount of fuel saved when getting a new motorcycle.
Newer systems on average require way less maintenance
Motorcycles of any kind will require at least a little bit of maintenance. You need to make sure to change the oil, maintain your tire pressure, and keep your chain clean and lubricated.
But it also goes without saying that the older your motorcycle, the more maintenance you’ll need.
Which is one area where newer motorcycles reign supreme.
And with the aforementioned growth of technology, many new motorcycles come with constant notifications that earlier generations would have to discover in the middle of a ride, such as:
- Status of the engine oil
- Wearing out of your brake pads
- Battery power
among many other things.
As you can guess, used motorcycles are going to skew older. And that means that they’ve inherently acquired more wear and tear. These motorcycles tend to require more fixes. Some of which include issues with throttle response, braking and vibrations at higher speeds.
By and large, the biggest (and most significant) argument against buying new is the cost. This is going to depend on two things: how much the base value is, and how successful the salesperson at the showroom is at getting you to buy crap you don’t need.
But “getting you to buy crap you don’t need” is the most a salesman at a legally-registered showroom can get away with. They can’t lie about the base features. There are checks and balances against this- if they make any changes/lie on paper, you’re entitled to compensation.
That’s the type of guarantee that you’re unfortunately not going to get on Craigslist or your local dealer. Sure there are legitimate used-motorcycle dealerships; but when you buy new, you know what you’re getting on paper. That makes a huge difference.
The Pros You Get With Buying A Used Motorcycle
Less Stuff To Maintain
We mentioned the technological advantages of new motorcycles, and how much time and effort they save you. What we didn’t mention is how much money they save you.
Because the more stuff your purchases come with, the more repairs they come with. And new motorcycles are chock-full of stuff.
The older your motorcycles are, the less stuff you’ll have to repair. Of course, said stuff also requires more repair, so you’re looking at a breadth vs depth situation here. How you balance this requires on how much you take care of your bike.
We started with this sentence in the last to last section: by and large, the biggest (and most significant) argument against buying new is the cost.
And we still stand by that.
With a new motorcycle, you still have to pay a base amount. With a used motorcycle, the base amount is subject to your negotiation skills.
And knowing what you know reading up to this point, we expect it to help said negotiation skills a fair bit.
Of course, there are some generally objective parameters such as the number of years the motorcycle has been owned for, what condition it’s in, what the market is in, et al.
But a lot of the control you have revolves around how you go about said parameters.
You Have More Choices
It sounds weird when you hear it for the first time, but new stuff only says new for so long. With new motorcycles, you are by nature limiting your range of purchase options to how the market is.
That’s not the case with used motorcycles. Everything ranging from a rich college kid’s 6 month old ride that he has to dispose of because he’s graduating to two-wheelers from over a century ago constitutes “used”.
And with the internet, you have everything you need at your fingertips to find out what’s up for grabs. Used motorcycles have a certain element of fun involved- because there’s so much variety. You’re especially going to love this if you’ve been riding for a while.
Whew, that was a long read. Pat yourself in the back now that you’ve made it this far.
Just to recap, in this article we explored the following:
What depreciation is
The factors that play into car depreciation, such as:
- Your car’s accident data
- Your car’s service history
- The reason you use your car
- Your car’s ownership history
Factors that play into motorcycle depreciation, such as:
- The production numbers by the manufacturers
- Your motorcycle’s condition
- Your motorcycle’s accident history
- Motorcycles that have been in famous movies or shows
- Your motorcycle’s ownership history
The pros you get with buying a new motorcycle, such as:
- Modern systems
- Less maintenance for the bike
- How well informed you can keep
The pros you get with buying a used motorcycle, such as:
- Having to maintain less stuff
- A huge number of choices