Guide to Motorcycle Depreciation with Real Examples

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Recently, I was looking to purchase a 2015 Indian Scout. I was curious how fast it would decline over the next five years.  I couldn’t find a concise answer online so I did some research and calculations of my own.  You should consider how long you intend to keep it, and how much it will appreciate before you buy a new or used motorcycle.

What is depreciation on a motorcycle? The process of reducing the value of your motorcycle over time through normal wear and tear is called “motorcycle depreciation”.  Some motorcycles are more susceptible to depreciation than others, such as reliability issues or model discontinuity.

I have years of experience in buying and selling motorcycles profitably. I also work as a mechanical engineer.  Because I want you to get the best value for your motorcycle, I combine my years of experience.

When does a motorcycle depreciate the most

The first two years are when a motorcycle’s value drops the most, typically between 19% and 27%. You will pay a initial 5% fee to purchase a brand new motorcycle straight off the showroom floor. Then, you can drive it home and sign the ownership papers.  Although the motorcycle may be brand new, it is considered to be used by everyone.

The first year is the best for the motorcycle. The first year has a smaller hit, then it decreases linearly every year between years 3-10.  See the table below for specific examples.

Harley Sportster 883’s are one of the most sold motorcycle models in the United States.  A Sportster 883’s first year takes an 18% increase, then it drops to 6% in year two, and drops to 5% between years 3-10. After year 10 all motorcycles depreciate even less because this is when they start requiring more regular maintenance and a lot of people don’t want to deal with the regular upkeep. People like you can find amazing deals, just like me!

What are the Factors that Make Motorcycles Fall More Fast?

Factors that will determine if a motorcycle depreciates faster than a model of another motorcycle are:

  • Production numbers – How many of that model were built and sold.  Honda produces large numbers of each model, and sells them at lower prices. This makes them less valuable.
  • Condition – How well did the previous owners take care of the motorcycle.  Things like oil buildup and scratches.
  • Accident History – Was the motorcycle ever in any accidents?  Unregardless of whether it was a serious accident, an accident can automatically reduce your potential buyers.
  • Pop Culture Influence – Was that model in any famous movies, shows, or music videos?  The nostalgia will cause motorcycle models, such as the Harley Davidson Captain America rode, to decline slower than usual.
  • Fads – Society will unpredictably appreciate a certain make and/or model of motorcycle because they have become a fad. Motorcycles will rapidly depreciate once this fad is gone.

These factors all play a significant role in how quickly a bike loses value.  While some factors, such as production numbers and manufacturer, are predictable, others are entirely up to the culture.

I’ve bought and sold over a dozen motorcycles in the last few years, so my advice is to buy the motorcycle you want that’s in your price range.  I always recommend to buy used and let others take the depreciation hit, but if that extra $100-$200 per month isn’t a big deal to you then go for new!

What is the Depreciation Level Off?

Depreciation on motorcycles slows down around year 3, and then it accelerates again around year 10.  Year 1 and 2 are the worst years. After that, depreciation is about 5% per annum for years 3-10.  This figure is based on the 10 year average depreciation for the 30 most popular motorcycles in America.

A motorcycle’s depreciation will usually level off around 10 years old. The value of it somewhat plateaus with the motorcycle only losing an average of 2%-3% of it’s value after 10 years. This is where I sell and buy most of my motorcycles.  I can get motorcycles for dirt cheap that don’t run and fix them up and sell them for a pretty big profit.

Motorcycle value doesn’t change much between years 10-20. So people looking to buy their first motorcycle or trying to learn how to ride should look in this age group because even if you drop the bike or put a few scratches on it, it won’t affect the value of the motorcycle very much. It’s likely that it already has some scratches and dents from normal wear and tear.

A good rule of thumb that I use to predict a new motorcycle’s value in 10 years is to multiply the MSRP (manufacturer’s suggested retail price, or the price it was sold as brand new) by .55 for the high value and .46 for the low value.

Imagine a motorcycle that has a MSRP of $20,000. This equation would be: $20,000 x.55 = $11,000; $20,000 +.46 = 9,200.  In 10 years, the motorcycle’s value will range from $9,200 to $11,000 depending on its model year.

What makes a motorcycle gain value over time?

These are just a few of the things I know to help predict which motorcycle models will increase in value.

  • You should look for motorcycles that have been featured in films or TV series.  Like Wolverine’s 1963 Harley Davidson, Captain America’s Harley, or the Ducati Diavel from The Green Arrow.
  • Look for models and brands with low production numbers.  Don’t get this confused with trim levels though.  For example, if there is a special Yamaha R1 trim level that comes with a different gauge cluster, then it’s still going to depreciate at close to the same rate as other R1’s.  Moto Guzzi is a good company to look at if you are looking for a motorcycle that appreciates.
  • You should look for the fastest motorcycle or highest horsepower in a particular class.  It will always be the fastest motorcycle in a particular class, so it is a good idea to buy it.
  • It is hard to predict trends, but it can greatly influence the value of certain motorcycles.  I have built a lot of café racers from older bikes and sold them at ridiculous prices just because they were in style at the time.
  • Updates on a motorcycle may help either increase it’s value or prevent it from depreciating as much. Some examples of updates include painting the gas tank, rebuilding an engine, powder coating the frame and others.

Depreciation will occur on every motorcycle. It can take time for a motorcycle’s value to recover and for society’s appreciation of the contribution it makes to roads.

Which Brands Lose the Fastest?

Victory, Hyosung and BMW are the most rapidly depreciating brands of motorcycles.

Victory motorcycles have been declining rapidly since they were retired in 2017, after Polaris bought Indian brands and decided that Victory wasn’t making enough money.

The Hyosung motorcycles are made in South Korea. They are rapidly depreciating in America and Europe due to people not trusting motorcycle brands until they have been around for a while.  Hysoung right now is not trusted, similar to what Honda had to deal with in the 1970’s.  Hyosung will be trusted later, but until then, it’s not a good bet on appreciation.

Because of the number of people who purchase new BMW motorcycles, they depreciate very quickly.  BMW’s are generally purchased by wealthier riders who like to get the new model every few years, which drives down the price of used models.  Their cars are the same.  They are excellent motorcycles but they depreciate very quickly.

Triumph has been through many difficulties over the years, and has been in and out business multiple times.  Triumph motorcycles of the 60’s and 70’s are great investments, but newer models tend to depreciate fairly quickly.  I would not buy a Triumph until the third year to allow someone else to pay for depreciation.

Honda bikes are reliable but depreciate quickly.
Because of high production numbers, they are able to move quickly. 
Honda’s business model is to sell in large quantities, which floods the market.
Hondas will be more widely available and the price of Hondas will drop.

Similar Question

What is the best time for a motorcycle to be used? The coolest months in the United States are November to February, which is the best time to purchase a used motorcycle. Cooler weather means that fewer people are able to ride and are willing sell their motorcycles for a reasonable price. For more information, see my article.

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