What we can afford

What Bikes Can We Afford?

How much money could you set aside each month toward saving for a used motorcycle?

Let’s talk about money, and the fact that very few of us have enough of it. If the pessimism I’ve been harboring about the economy for the past few months comes to fruition – as well as, more specifically, the pessimism I feel about motorcycle markets in Western countries – motorcycling is going to suffer. And those of us for whom riding is deeply important are probably going to have to reassess how we interact with that world.

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Dragon Motorcycles in Cardiff is selling this 2002 Triumph Sprint ST for £2,495

Back in January I was predicting that the United Kingdom and perhaps Europe would soon be facing a recession. Based in part on that assumed economic downturn, I forecast that Europe’s motorcycle market would soon shift somewhat, resulting in fewer new bikes sold and increased interest in the used market.

The reasons I gave back then for predicting a recession seem quaint now, but the idea that many of us are facing hard economic times seems now almost certain. Last Thursday the International Monetary Fund warned that the planet faced the worst economic crisis since the Great Depression, with unemployment in the United States and United Kingdom at risk of hitting higher levels than they did in that crisis. Things might not turn out that bad – the US stock market is strangely buoyant – but I sure as hell wouldn’t be signing any loan agreements right now.

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Even if our economy wasn’t currently the equivalent of two burning trains crashing into each other on a collapsing bridge I think motorcycle markets of the West were still facing difficult times. In the United States the market for new bikes has been increasingly sluggish, in part because:

  1. The people who have primarily been buying motorcycles over the past 50 years – Baby Boomers – are aging out of the market
  2. The people who were supposed to take their place – Gen Xers and Millennials – are crippled by debt, insecure employment and stagnant wages
  3. Gen Xers and Millennials are less interested in motorcycles, perhaps because manufacturers failed to engage with them early on – choosing instead to focus on Baby Boomers

Factors 1 and 3 are less prevalent in Europe because more people use motorcycles and scooters for transportation. However, debt and job insecurity are serious issues. I think those factors have been slightly hidden in recent years by the prevalence of Personal Contract Purchase financing (PCP), but in an economic downturn they will become painfully obvious.

Superbike Factory in Macclesfield is selling this 2015 KTM 1190 Adventure for £8,089

If you are unfamiliar with PCP financing, I’m planning to write a larger article about it in the future, but for now the basic idea is that it allows riders to “own” bikes they can’t afford and helps encourage regular turnover in the market through a system that creates a balloon payment that can be absolved through establishing a new contract. It’s sort of like leasing with the option to buy.

The plus side of PCP – alongside the fact it helps riders gain access to the latest and greatest models – is that it has helped fuel the rapid modernization of motorcycles over the last decade or so. By encouraging “buying” on a two- or three-year scale, it has prompted manufacturers to perpetuate the cycle by offering updates at more or less the same pace. Thanks to this, bikes now are better than they’ve ever been. However, I think we’ve hit something of a plateau. Bikes are being given minor tweaks and corresponding price hikes but the riding experience isn’t changing that much from model to model. The overall day-to-day experience of riding a brand new BMW R 1250 GS, for example, is indistinguishable from the overall day-to-day experience of riding a 2013 R 1200 GS. For the average person they’re the same, except one costs £13,845 and the other can be found for as little as £6,595.

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Amid an economic downturn I expect that disparity will become glaringly obvious and the people wanting “new” bikes will be turning to the used market. This is the part where you come in. Let’s pretend we’re looking to buy a used bike but are willing to wait a while to save up. How much money could you realistically set aside each month toward saving for a new bike?

If I pushed myself, I reckon I could set aside £150 a month. That’s probably a lie – I’ve been going through difficult financial times over the past two years – but you know what they say: shoot for the stars and maybe you’ll get the moon. Or a Suzuki Bandit from 1994… Anyway, based on your responses I plan to imagine I’m setting an amount aside each month and will try to find a bike that can be bought based on what “we” have so far accumulated.

Budget Bikes in Swindon is selling this 1998 Yamaha XJ900 Diversion for £990

I’ll try to find out everything I can about that bike, so it’s a feature that’s sort of like a used bike buyer guide while also giving a real sense of what’s out there and what’s necessary to achieve it.

So, yeah, how much could you afford? Don’t worry about changing the amount into British pounds if you live outside the UK. This is all pretend, anyway. Just give me a number. What’s realistic to you?