I was recently looking at purchasing a 2015 Indian Scout and was curious about how quickly it would depreciate over the next 5 years. I couldn’t find a concise answer online so I did some research and calculations of my own. Before buying any new or used motorcycle, you should always think about how many years you plan on owning it and look consider how much it will depreciate.
What is motorcycle depreciation? Motorcycle depreciation is the reduction of the value of your motorcycle with the passing of time due to normal wear and tear. Some motorcycles depreciate faster than others due to reliability issues, model discontinuity, and other factors.
I have years of experience with buying and selling motorcycles for a profit and I now work as a mechanical engineer. This research combines my years of experience because I want to give you the best estimate possible of what your motorcycle will be worth in the future.
When Does A Motorcycle Depreciate The Most
A motorcycle depreciates the fastest in the first two years, usually between 19%-27%. A brand new motorcycle right off the show room floor will take an initial 5% hit just from you signing the ownership papers and driving it home. That motorcycle might be new to you, but it is now considered used to everyone else.
The motorcycle takes the biggest hit in the first year, with a slightly smaller hit in year two, and then takes a very linear decrease every year between year 3-10. For specific examples, see the table of motorcycle values below.
Harley Sportster 883’s are one of the most sold motorcycle models in the United States. In year one, a Sportster 883 takes an 18% hit, in year two it drops to 6%, and years 3-10 it drops around 5% per year. 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. So people like you and me can find awesome deals!
What Factors Make Motorcycles Depreciate Faster
The largest factors in whether one motorcycle will depreciate faster than a different model are:
- Production numbers – How many of that model were built and sold. Honda makes large numbers of each model and sells them at lower costs, so this makes them worth less down the road.
- Condition – How well did the previous owners take care of the motorcycle. Things like scratches, dents, oil buildup, routine maintenance, etc.
- Accident History – Was the motorcycle ever in any accidents? An accident automatically decreases your pool of potential buyers regardless if it was a bad accident or not.
- Pop Culture Influence – Was that model in any famous movies, shows, or music videos? Motorcycle models like the Harley Davidson that Captain America rode are going to depreciate slower than usual because of nostalgia.
- Fads – Society will unpredictably appreciate a certain make and/or model of motorcycle because they have become a fad. Once that fad fades, the motorcycle will quickly depreciate.
All of these factors play a large role in how quickly a motorcycle will lose value. Some of these factors are foreseeable, like production numbers and the manufacturer, but some of the other factors are completely up to 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!
When Does Depreciation Level Off
Motorcycle depreciation slows down at year 3 and then again around year 10. As discussed earlier, years 1 and 2 take the biggest hit and then depreciation averages about 5% per year for years 3-10. This is calculated based on the average depreciation of the 30 highest selling motorcycles in the United States over a span of 10 years.
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 the price point where I buy and sell 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. Chances are it already has a few scratches and dings on it anyway from the 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.
So say you have a motorcycle with an MSRP of $20,000. The equation would go something like this: $20,000 x .55 = $11,000 and $20,000 x .46 = $9,200. So the motorcycle will be worth between $9,200 and 11,000 in 10 years from its model year.
What Makes A Motorcycle Gain Value Over Time
These are a few tricks I have learned in order to predict which motorcycle models will go up in value over time.
- Look for motorcycles that were used in famous movies or shows. Like Wolverine’s 1963 Harley Davidson, Captain America’s Harley, or the Ducati Diavel from The Green Arrow.
- Look for makes and models that have very 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. I mean companies like Moto Guzzi who only produce a few of a certain model would be a good bet at an appreciating motorcycle.
- Look for the highest horsepower or fastest motorcycle in a specific class. The fastest motorcycle from 1980 will always hold that title, so buying it would be a safe bet as a good investment.
- Fads are very hard to predict, but this has a huge influence on the appreciation rate 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. Updates may include repainting the gas tank, rebuilding the engine, powder coating the frame, etc.
Every motorcycle will experience depreciation. It usually takes time for a motorcycle to begin to gain value again and for society to appreciate the what a certain motorcycle can contribute to roads.
Which Brands Depreciate The Fastest
The fastest depreciating motorcycle brands are Victory, Hyosung, BMW, Triumph, and Honda.
Victory motorcycles are depreciating very quickly because they were discontinued in 2017 after Polaris purchased the Indian brand and no longer felt that Victory was making enough money.
Hyosung motorcycles are produced in South Korea and are depreciating very quickly in the United States and Europe because people tend not to trust a motorcycle brand until it has 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.
BMW motorcycles depreciate fairly quickly because of the demographic who buys them new. 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. The same is true for their cars. They are quality motorcycles, they just depreciate very quickly.
Triumph has had many struggles over the years and has gone in and out of business several times. Triumph motorcycles of the 60’s and 70’s are great investments, but newer models tend to depreciate fairly quickly. If I were to buy a Triumph I would wait until year 3 to let someone else pay for the depreciation.
Honda makes very reliable motorcycles but they depreciate so fast simply because of production numbers. Honda makes their money from selling in quantity, which floods the market with Hondas and drives down their price.
When is the best time to buy a used motorcycle? The best time to buy a used motorcycle in the United States is during the cooler months of November through February. The cooler weather means less people have the itch to ride and are willing to sell their motorcycles at a decent price. See my article here for more information.