(lyric from Laid Back – “Bakerman”)
Well it’s been a funny old year, not that it’s over yet, but whereas a year or two ago I was in a distinct minority with my doom and gloom predictions about the economy and society, nowadays almost nobody who lives outside London does anything much other than purse their lips and tilt their head sideways, and then relate a little snippet from their own lives that kinda supports what I have been saying.
The latest one of note was a guy I know vaguely with a bike shop, included in his current stock of used bikes are a couple of clean late model twin cam harleys, both very clean, very low miles, going for around 9k, but in both cases the previous owners have managed to throw around 30k in extras at them, which isn’t that hard if you’re really determined.
So you’re looking at guys that have paid 15-20k for a bike, thrown another 30k at them to bring the total investment to 45-50k (and we’re talking pounds sterling here, not yuan) here, and then sold it to a dealer for 7.5k, so HE can sell it for 9k, so THEY have 7.5k cash which is more than the HD dealer will give you as a trade in on your no longer factory 2006 HD when you buy a ’15 model…
… and this dealer is worried, because there are yet more rules and regulations coming down the pipe from the FSA (Financial Services Authority) all of which make it even harder to get credit, to the point where the self employed won’t even get a mortgage, not unless you have something like 90% deposit.
Credit cards are a crap shoot, because the banks insist he has a merchant services account, which means ALL chargebacks get taken back from HIM, no matter how diligent he was…
… got to the point where the only way he can sell a bike on plastic is to have the cardholder turn up in person with every bit of ID imaginable and a whole bunch of household utility bills to boot, and they all better show the same name and address details, EXACTLY the same, no “John Q Smith” on one and ” J Q Smith” on another.
Cash sales, he gets a few, but not many of them about, it’s still finance city, and lots more apply than get, and it’s no longer much of a sweet deal for the dealer in commission terms.
I’m on my third and I strongly suspect last HD, I took advantage of the afore-mentioned type of modern HD buyer, the garage queen with 200 miles a year put on it and 2x the purchase price spent on engine mods, guy built himself a bike with dyno bragging rights, but ended up with a bike that he could no longer handle, and besides (I’m guessing here) those 2009 new model range rides look so schweeet… lol.
Time was, you chucked money at HD because unless you stuffed it into a wall, you could pretty much always get your money back… pretty much.
You do the math on some of these things though, and you find owners who are spending UK£ 2.00+ per MILE on the odometer, and that is insane shit for a fucking production motorcycle… when I bought the current ride I put more miles on it in the first week than the previous / original owner had in five fucking years, yet he had also thrown so much money and engine mods at it that it no longer fitted in the category with Malcolm’s bikes.
I met Malcolm briefly years ago, a mutual acquaintance introduced us, me as someone who could help Martin recommission a harley that had been put into storage.
When I get there there is a mint 5 year old Electra-glide in the middle of the big double garage, with less than 2 miles on the odometer, and never registered.
There are also four other large lumps covered by tarps and blankets along the back wall.
Turned out about 5 years previously Martin’s folks had died, and he got left a lump sum, he hummed and haah’ed about how to invest this cash for a bit, and ended up at a certain man dealer in London, where he bought five brand new unregistered Electra-glides, which is decommissioned for storage and left in the back of the garage.
Need some cash?
Pull one of the bikes out and sell it, brand new old stock.
He actually sold that one for MORE than he paid for it, in strict pound notes terms (inflation excluded) because there is always some asshole who will buy a no longer available from the factory but brand spanking new unused and unregistered model.
I haven’t seen Malc for ten years or more, so at that rate he still has two left, and I hate to think what a patient man could get in the age of the internet and world wide markets for a brand new unused unregistered never ridden 1999 Evo engined FL’s… I know it’s going to be a LOT more than the 7.5k each he paid…. he got 11k for the one I was involved in, not a bad appreciation after only 5 years.
But there is the thing, unless it is a tool of some sort, an asset is not a thing that you use, and if you use it, unless it is a tool of some sort, it is not an asset.
I can argue that the laser and the harley cost similar amounts of money, only one of them earns money…. a second harley would not earn me any money (if I rode it) and a second laser would not earn me any more money, as the one I have is not in use 24/7.
Put the money in the bank? Yeah, that worked well in Greece and Cyprus and other places… no thanks.
Somewhere between the time I met Malc and now, I met another guy, he took a different route, life was going to shit, divorce coming up, asset forfeiture and all that, so he went out and maxed all his credit cards and bought a brand new harley, then sold it for a quid to a mate, who sold it for a quid to another mate, who sold it for a quid to another mate, who sold it to the first guy again for a quid… which means nobody can re-po it… fuck it, he was gonna lose everything anyway, might as well come out of it smiling on two wheels.
His attitude was like mine, you buy it to keep it and to ride it, not a garage queen, not an overclocked dyno diva, not a supposed “investment”, not a big boys toy, born again mid life crisis, or anything else.
I always had this thing, you know, the guy is there showing off his latest mega super crotch rocket, I’d lean in and ask what was wrong with the rest of the rear tyre, that he was only using the middle bit…. LRFH
Second pic on the right is my rear tyre (first pic is the bike itself, can’t believe I haven’t mentioned this bike before on here — strange shit, you know you have done something, because you “must have” and then you check, and find no, you never did…) so if I can use 95% of the tread width on an old harley y’all got no fucking excuse on your modern jap superbikes.
I just made a coffee, re-read all this, and realised that the point I was trying to make, I have talked around a lot, but haven’t actually touched on once.
The point is that a thing is what it actually is, and indeed what it actually is may vary from one individual to another, and then there is how that thing is perceived, and indeed this too may vary from one individual to another.
Your “awesome harley cruiser” may be a “blinged up garage queen POS” to me, (and vice versa) and really, that’s just a matter of taste, and you are entitled to your own choices and tastes as I am.
However, your “investment” or “asset” may not be mine, and vice versa.
The guys up above who blinged 45k on bikes that they sold within a couple of years for 7.5k could take up yacht ownership for example, it’s a similar financial experience.
The problem starts when someone starts selling yachts and harleys and whatever else, as an “asset” or an “investment”, and when others start buying them as such.
it’s all great stuff until it comes to “mark to market” time, or selling time, and you actually make a sale.
One of those 45k spent but sold for 7.5k bikes had 3.5k of custom paint on it, he’d probably have gotten 8.25k from the dealer if it had had factory stock paint on it… that’s a bitch.
Not as big a bitch as a guy who just got burned to the tune of 37k for 5 years of harley ownership (and 300 miles of “riding” a year) who THEN TURNS AROUND AND USES THE REMAINDER of his mark to market “investment” to buy another brand new harley and start off all over again…
… or a yacht….
…. or stocks and bonds….
So the dealer who started this all off, he got no long term plans, he’d love to keep and grow the business, but he knows it’s moving goalposts as far as the FSA and other things are concerned, and you can only get late model clean as fuck low mileage garage queens as long as the supply stays available, and that is your shop’s USP… so enjoy it while you can, make money while the sun shines, and be prepared to bail when the seasons change.
Me, well I’ll be happy to keep this bike to the day I die, or until I get too old to ride, so it’s pretty much never going to get marked to market (sold), so the longer I keep and ride it and the more miles it does, the better the value from the fiat currency that was exchanged for ownership of it.
It’s like the laser, the residual value is already $0.00, because I got no intentions of selling, ever… it doesn’t cost money in HP or interest, just daily usage and routine maintenance and consumables.
If you buy something with no intention of ever selling it, that thing itself becomes substantially different from buying a thing that you may one day want to or need to sell.
We, as a species, have a VASTLY greater “turnover” in ownership of things than we used to when I was a lad, typically back then people would buy one house, maybe two, in a lifetime.
A car or motorcycle would be bought and kept for ten or more years.
A stereo the same.
Hell, my old man died in the early 90’s with pairs of shoes (that were still good) that were bought new in the very early ’70’s, I’m sitting here in a one year old pair of trainers that are on their last legs and need replacing.
To many people, I’m sitting on an old, thirteen year old, obsolete, out of date harley.
To me, I’m sitting on one that is THIRTY FIVE FUCKING YEARS YOUNGER than my last one. (last pic above)
I don’t *care* what value you place on it, any more than I *care* what value you place on the current / latest squeeze (9 months so far and going strong) because they both give me exactly what I want every single day of ownership, I’m not investing and hoping for some future gains, I’m already getting so much out that every day is another win win day.