Brain Fart: The used bike economy

By Justin Steiner

Let’s face it; all hobbies are expensive, particularly if you want nice things. Despite that fact, we receive a fair bit of hate mail for testing expensive bikes and products in Dirt Rag and Bicycle Times.

Now, I know our average reader might not be able to throw down $3,000 to $5,000 for a bicycle, but the asking price on the used market usually drops to around 50 percent of new retail. This is where diligent shopping can get you into a bike you might not have been able to afford new, with little residual loss in value. This is exactly why, in my opinion, everyone should be interested in reading about all the bikes and products we test; they might just be the perfect tool for you on the used market a year or two down the road.

Being a bit of a dirt bag myself, I’m intimately familiar with this plan of buying used. I’ve operated this way with all my expensive purchases through the years, whether they were used cars, motorcycles, or cameras. Sure, you’re taking a risk by buying something out of warranty, but diligent research and patient shopping can yield fantastic bargains. If you play the game correctly, you can break even and sometimes even turn a profit. I was able to turn a profit on both my previous motorcycle and my previous car. You certainly won’t be able to say that if you’re buying new.

Let’s look at the economics of one example. After testing Pivot’s Mach 429 back in 2008, I just had keep it around. As of late, I’ve been steadily leaning toward the longer-travel end of the spectrum, so I decided it was time to part ways with the 429 to make room for something new. Retail price in 2008 was $4,850. Turns out, the used market value of a Mach 429 in 2011 is around $2,500. That means it cost me $2,350 to own over the last three years, or about $783 per year—$2.15 per day.

Keep in mind I’m not factoring in the cost of normal wear and tear. Items like tires, drivetrains, brake pads, etc. are simply the cost of riding, regardless of the bike you’re on. We’re simply looking at the assets required to own this equipment.

Now, let’s project out the used lifecycle of this same bike. The lucky gentleman who purchased this bike is now able to enjoy the same wonderful ride quality I did, but for $2,350 less out of pocket. I’d wager after another three years of riding, this bike will still be worth $2,000 to $1,750. That means Joe (name changed to protect the guilty) will have invested only $500-$750 for the privilege of riding this bike over the next three years. Yearly, that’s just $167-$250, or $0.46 to $0.68 per day—a small fraction of my cost of ownership.

And so, with that information in hand, I suggest y’all stop whining about us testing expensive bikes. Instead, get busy saving your precious pennies for the used bike of your dreams. After all, you could do far worse investing your hard-earned cash in the stock market right now.

What about you? 

Ever score a great deal on a used bike? Share your experience in the comments below.