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If you’re buying or selling a used motorcycle, the first step you’ll need to take is to determine its value. If you’re the seller, you’ll need to know how much you can charge. If you’re the buyer, you’ll need to know whether or not you’re getting a fair deal.There are also other reasons why you may need to know the value of a motorcycle, such as when you’re putting through an insurance claim or refinancing.Read on to learn how to determine what a bike is worth, including the various factors that can have an impact on value.
Why Is Knowing the Value of a Motorcycle Value Important?
Anyone who is looking to either buy or sell a motorcycle can benefit from knowing a motorcycle's blue book value. However, there are other scenarios where knowing the value of a bike can be important.One is if you’re thinking about refinancing your motorcycle loan. Similar to refinancing a car loan, refinancing a motorcycle loan involves taking out a new loan — ideally one with better terms and/or a lower interest rate — and using it to pay off your old loan. Your loan will be secured by the motorcycle itself, so your lender will need to know its value before offering a loan. Knowing the value of your bike can also be important for insurance purposes. If your motorcycle is damaged in an accident or gets stolen, knowing what its market value was before the incident can help you negotiate with your insurance company, especially if you believe the payout they are offering is low. If your bike is totaled, for example, you can compare what your insurance company claims the market value for your motorcycle is to its blue book value. If the valuation you find is more than what your insurance company is offering you, you can bring this to their attention.
How the Value of Your Motorcycle is Determined
There are a number of factors that affect the value of a motorcycle. These include:
Make and model Some motorcycle makes and models are more valuable than others, due to their reputation for quality, safety, and aesthetics.
Age Just like cars, the value of motorcycles depreciates over time. In just the first year of ownership a motorcycle loses, on average, 12.5% of its value. It continues to depreciate at a relatively fast clip over the next three years. By year five, however, the depreciation rate begins to stabilize, with bikes often losing only $300 to $350 per year from that point on.
Condition A motorcycle that’s in good working order will generally fetch a higher price than one that needs work. For this reason, it can be a good idea to carry out all regular maintenance on the bike to help preserve its value. If you’re thinking about putting your bike up for sale, you may want to consider replacing components, such as worn out brake pads, that are in need of repair.
Mileage The more a motorcycle has been driven, generally the lower its value. However, mileage isn’t as big a factor as it is with cars. Road conditions and an owner’s riding style generally have a larger effect on a bike’s value than the number of miles clocked on the odometer.
Extras Bells and whistles, like cruise control or an engine guard, can raise the value of a motorcycle.
There are several ways you can appraise your motorcycle. One is to hire an independent appraiser who (for a fee) will examine your bike and assess its value based on the criteria above, as well as the local market. Another option is to take your bike to a motorcycle dealership. They’ll appraise it based on trade-in value — or, in other words, how much they’re willing to buy it for. This type of appraisal is likely to be free, but keep in mind that the trade-in value of a motorcycle is generally lower than its fair market value. The reason is that the dealer needs to leave some room for profit when they re-sell the motorcycle to a customer (at market value). Finally, you can also do a self-appraisal. This is free and simply involves looking up the bike’s book value online. Just keep in mind that different sites use different methodologies, which can result in somewhat different book values.
Motorcycle Blue Book Value
A motorcycle's "blue book value" is a generic term for its market value. The term originated from the Kelley Blue Book (KBB), which is one of the most well-known pricing guides not only for cars but also for used motorcycles. A motorcycle's blue book value now simply refers to how much it is worth in the private market, and there are two main sites where you can find this out. Here’s a look at how each one works.
Kelley Blue Book
To get the blue book value of a motorcycle using Kelley Blue Book's site, you simply need to provide the bike’s make, model, and year. You are then asked to select either “Trade-In Value” or “Typical Listing Price.” The former is the amount you might expect to get when trading in a used motorcycle in good condition with all of its original standard equipment. The latter is what a dealer would likely ask you to pay if you were looking to buy a used motorcycle in good or better condition.Additional equipment for a motorcycle, such as an engine guard, may also be included as a separate value.KBB also gives you the option of checking a used motorcycle's accident history by entering its vehicle identification number (VIN) into a box. To come up with its values, KBB uses data from auctions, dealer sales reports, and dealer surveys, as well as motorcycle listings and sales transactions nationwide. They also take into account current market and economic conditions.
NADA
The other major motorcycle pricing resource is the National Automobile Dealers Association, or NADA. Similar to the KBB site, you'll need to choose a year, model, and make. You'll also be asked for your ZIP Code and any special options.The site offers four prices on motorcycles:
The manufacturer's suggested retail price (which includes only standard equipment)
The suggested list price (the manufacturer's highest suggested list price when the motorcycle was new)
The low retail price (for a vehicle that may show extensive wear and tear)
The average retail price (for a vehicle that is clean and without obvious defects and average mileage)
NADA uses data from more than 1.5 million vehicle transactions a month to help determine values, including wholesale, retail, and auction sales. It also considers asking prices posted on classified listing sites and Autotrader.
How Does the Value of Your Motorcycle Impact Your Ability to Refinance?
You may decide that you want to refinance your motorcycle loan if the original financing was at a high interest rate, your credit score has improved since you financed, or you’re looking to make your monthly payments more manageable.The way motorcycle loans work is that a better credit score can translate into a lower interest rate. Another benefit of refinancing is that you may be able to lower your monthly payments by extending your loan term. It’s important to note, however, that a longer loan term may mean you pay more in interest in the long run.Lenders will look at the value of your motorcycle before they offer you a loan to refinance. They’ll want to be sure that, should you default on the loan, they’ll be able to recoup their losses by seizing and selling your vehicle. If your motorcycle is worth less than the value of your previous loan, a situation commonly known as being “underwater” or “upside down” on your loan, you may have trouble finding a lender willing to offer you a refinance. Recommended: How to Refinance an Auto Loan
The Takeaway
Understanding the value of a motorcycle is important if you plan to buy or sell a bike, make an insurance claim, or refinance your motorcycle loan. You can find the fair market value of a bike on your own by looking up the year, make, and model online at Kelley Blue Book or NADA. Or, you can turn to a professional appraiser or dealer.
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Refinancing your auto loan could lead to lower monthly car payments and more money in your budget. Lantern by SoFi can help you find the right auto refi loan for you.
Shortening the term of your auto loan may increase your monthly payments, but you’ll likely pay less in interest over the life of the loan.
Austin Kilham is a writer and journalist based in Los Angeles. He focuses on personal finance, retirement, business, and health care with an eye toward helping others understand complex topics.
