We still don't know what he paid privately - he might make a profit yet unless he didn't do his research
Hey Damo this is great, I've slotted straight in here from the KTM crowd, everyone's moaning about build quality, bike problems, depreciation and crap dealers lol
+1 Bought my 2007 Sport Classic GT1000 in 2009. Previous owner had only put 2,700 miles on the clock & had also taken the hit on depreciation. These bikes have since appreciated in value, to the extent that bikes like mine appear to sell for quite a lot more than I paid for it. I didn't buy it as an investment & can't claim I predicted the short model run & subsequent increase in value. I bought it to ride it, and still enjoy doing so. No plans to ever buy a brand new bike.
That's the price of exotica mate Saying that, I was looking at rc8's on eBay last night, after all this time I still reckon one of those on full chat with the akra was the best bike I owned.
To be fair I had no issues at all with mine, it was just my aching bones on long trips that made me change, great track tool aswell
When a dealer takes in a PX, he needs to factor in not just all the usual overheads such as VAT, wages, business rates, showroom rent, lighting and heating etc but also the risk of undeclared or undiscovered faults on the bike. Then add the cost of servicing and possibly MOTing the bike. Then after all that, it might sit on the sales floor for 6 months taking up space that could be used to sell a more profitable bike. Then lo and behold, the bike spends so long unsold that a new registration year rolls around and so it's another year older and therefore even less valuable, or the manufacturer gives the new model a facelift, which is another negative against it, or both. It's almost winter and nobody in their right mind would buy a bike now unless it's either dirt cheap, a winter hack or a restoration/custom project, so the dealer also needs to factor that in to the equation. Bike values are seasonal. I've just bought another bike for about half what I was seeing them sell for during the summer. Some dealers also have agreements with the manufacturer that they'll maintain or won't fall below a certain new/used ratio (Ducati/Honda/Yamaha UK don't want their showrooms full of old and superceded and/or other manufacturer's bikes at the expense of new models on the floor). Hence the guy you sell to might end up just moving it on to someone else in the trade at no or minimal profit. The guy I bought my (now sold) 848 off was a trader and in the course of me questioning him trying to find out what the catch was, because I was getting it very cheap, we ended up having a long chat about the economics of the new and used bike trade. Not only do dealers make very little profit on the sale of a new bike, the amount of money they have tied up in stock is quite frankly scary. They effectively take new bikes on credit, on which interest is charged, and so the amount repayable is increasing as time goes on. And then when they take in a part ex, it is decreasing in value as time passes and so they need to make sure it's going to turn a profit and need to build in a buffer. Also, as I said, sometimes they have to get rid of the PX bike at a moment's notice if their new/used ratio gets out of whack, as otherwise they would be in breach of their franchise contract. The new/used ratio thing is one of the reasons I got my 848 cheap from this trader - a main dealer had taken the 848 in PX for a new bike but had to shift it immediately because his ratios were out of kilter, so he dealt it more or less at cost to the trader I bought from who was financing his stock purchases with a line of credit from a bank. Hence, his business model was buy cheap/sell cheap, low margin/quick turnover because he simply couldn't afford to have lots of money (on which interest was being charged) tied up in bikes that weren't selling. Used bike values may also be geographical to some extent. I don't know if they are or not, but back in the 90s I used to buy and sell cars, more as a hobby/side line than anything else, and I made it work because I had noticed that secondhand cars tended to be around 10% - 15% cheaper oop North than in that London, where I live. So if I bought something for £5k in Stoke, I could usually sell it for £5.7k down here, which even factoring in travel costs and the risk of getting landed with the occasional lemon, turned a small profit.
It's not hugely different to my industry. We deal in technology, industrial type print equipment to be precise and there are always new models released or people needing to get something bigger / faster as their company's grow. Taking a trade in unit is a low priority for me for similar reasons listed above, we effectively make no money on the new machine sold until we sell the trade in, that could be weeks or months. There's then the risk element involved as we've been burnt in the past selling a trade in and major failures appearing within the first 30 days, effectively costing us more to repair than what profit we'd made over the entire deal. We therefore are forced to price trade in machines accordingly. What is different is that we don't really have seasonal activity to consider much, as has been said a bike traded in now is largely going to sit there for a while especially if it's not considered a 'hack'
Back in 08 I was in the market for an 848. One brand new red one or a white one with alarm and termis with 1400 miles on it. Both same reg. I don't mind depreciation like that when it works in my favour. I went white and loved it.
Nicely put Zhed, Its all too easy to knock the big bad dealer just trying to make money, that is after all the sole aim of being in business, but surprisingly this very point is lost on many people caught up in the emotion of dealing with there pride and joy. Having a fairly specialist retail showroom myself I am acutely aware of business overheads, I sit there more than occasionally explaining to somebody why our goods are more expensive than the same thing online while they are sat opposite me in my heated, lit, and staffed showroom at 4.30 on a Saturday afternoon with the plans for their house extension laid out in front of me. I'm giving them all the information they need to make sure they make the correct choice of product for their needs, correcting architects incorrect specifications etc etc, I'm sure you get the picture, Its poles apart from an online buying experience that the customer is basing his price comparison on. The point I'm making here is we can normally justify what we charge by offering great customer service, making the whole buying experience as pain free as possible, offering a little sweetner here and there if needed to get a deal rather than holding out for full retail on all products all the time, no pressure selling to build trust, and an excellent reputation locally for doing a first class job. Buying a bike is always an exciting time and once the decision is made to purchase then I will always hand my money over freely to the right person that I feel Is personable, and can offer most or all of the service above, sadly in a lot of cases this is just not the experience people have with motorcycle dealers, and I'm not just using anecdotal evidence, I'm talking from my own past and very recent experience with several fairly local Ducati dealers, a couple of whom I would rather buy a different make of bike altogether than to hand my money over to them. The fact is that if the buying experience is a good one you wont really give a toss what the dealer is making as long you and the dealer both feel that you've done a deal that you're both happy with and then you have potentially become an ongoing customer for service, extras, clothing etc.
