How Much Value Does a Motorcycle Lose Each Year?

Every motorcycle, similar to other vehicles, experiences depreciation over time. However, the amount of depreciation can vary significantly based on numerous factors. To understand the value loss of a motorbike, we need to consider factors such as the brand, model year, condition, and overall market demand.

The Case Study: 1991 Harley Sturgis

Let's explore the fascinating example of a 1991 Harley Sturgis motorcycle. A valued friend of mine purchased this limited-edition bike in 1991 for approximately $7,000. Due to its limited production, only 1,550 units were made, making it a rare collector's item. Despite this exclusivity, the bike did not see a steady increase in value over the years.

By 1995, my friend received several offers for the bike, with one offer as high as $20,000. However, as the years passed, the bike's value fluctuated and eventually stabilized. Today, a 1991 Harley Sturgis motorcycle in mint condition might fetch around $20,000, but a bike in fair condition could sell for around $5,000. Owners of this particular bike are highly motivated to maintain and improve the bike's condition to command higher selling prices.

General Depreciation Trends

In general, motorcycles can lose between 5% to 10% of their value each year, depending on the brand and the market demand for the motorbike. Popular motorcycles are often seen as holding their value better, but even these can depreciate over time. For instance, a 2009 Yamaha R6, which originally cost around $14,000, can now be found for as little as $5,000 to $6,000, based on the bike's condition.

The price reduction over 14 years would indicate a depreciation of more than 50%. However, most motorcycles still retain around 40% to 50% of their new price after several years. If a motorcycle is not particularly popular or desirable, its residual value can be lower. For instance, a less popular model might only retain 20% of its retail value after a decade.

Aging and Depreciation

The depreciation value of a motorcycle varies with age, much like other vehicles. Here's a breakdown of the typical depreciation curve:

First Year: In the first year, especially the first hour, a new motorcycle experiences the largest depreciation. The moment it leaves the dealership, it is no longer considered a new bike. A drop of 25% is common the first year, essentially making it a used bike. Subsequent Years: After the first year, the bike depreciates more gradually. The second year might see an additional 7% depreciation. This slowing of depreciation continues up to about the fifth year. After that, the model year becomes secondary to the current condition of the bike.

In summary, a 7-year-old bike is close to 100% depreciated. Factors such as residual value, market conditions, and collections interest can significantly impact the final depreciation rate.

Final Thoughts

Understanding the depreciation of a motorcycle is crucial for both owners and buyers. By considering the various factors affecting depreciation, you can make informed decisions about when and how to sell your bike. Whether you're a collector or a casual rider, staying informed about market trends and bike conditions can help you maximize the value of your motorcycle investment.