A new year has come, and soon the call for the road will hit bikers everywhere. With gas prices down and employment up, more people will be positioned to buy a new bike, too. Upfront, I will tell you I am the worst customer to ever walk through a showroom door. To buy simple things, I make multiple trips and do exhaustive research before sealing the deal. Even at the cash register or sitting down with the finance guy, my stomach is in knots. Somehow I get through it, but I always worry — did I buy too much of something? Can I afford it?
People often talk about how a motorcycle is going to save them money. It doesn’t, but it is a good pitch to get your significate other or co-signer to go along with it.
Most of us don’t like to talk about the actual cost of things, but here we are, and we are going to get into it. If you already own a bike, the cheapest bike you will ever get is the one you already have.
If you already own a bike and want a new one, it is best to sell the one you have yourself. As spring approaches, your best bet is to start advertising now. Craigslist, Facebook Marketplace and forums are the best ways to get the word out. If you meet someone for the sale process, always meet in a safe place. People will drive states away if you have a bike they want.
Be sure to know the laws for selling a motorcycle, too. Be careful with the title and don’t screw it up or sign it in the wrong place. Each state has different rules and requirements. You can usually find specific information on the state’s DMV website.
If you must, a trade-in is usually a quick way to move up to a new bike. Dealerships are generally picky about trade-ins. They look for maximum returns and the fastest sale.
When it is time to buy a bike, cash is best. If you must finance a bike, think about the 20/4/10 rule. The rule means put 20 percent down, finance for no more than four years of payments, and do not exceed more than 10 percent of your gross income — including principal,interest and insurance.
Let’s do some rough math. If you finance a new bike at $26,000, you should have $5,200 for the down payment. You would finance $20,800. For four years (48 months) at an interest rate of 3.95 percent and a sales tax of 4.75 percent of your payment, that would be $497.04 a month. It would cost $1,822.86 in interest and $1,235 in taxes. Add an additional $60 (estimate) for insurance. You would pay $557 a month. Using the 10 percent rule for not exceeding your income, you should be making more than $66,840 a year.
So here are some stats from a 2015 article on The Motley Fool. Twenty-four percent of motorcycle owner households earned between $50,000 and $74,999 in 2014. The median household income was $62,200. Motorcyclists are pretty educated. Seventy-two percent of motorcycle owners in 2014 had at least some college or post-graduate education, and almost as many (71 percent) were employed. Some 15 percent were retired. The median age of the typical motorcycle owner was 47 in 2014, up from 32 in 1990 and 40 in 2009. Married riders comprised 61 percent of motorcycle owners, up from 57 percent in 1990.
If you are getting your first bike, be sure to budget for safety equipment. Your gear should include a good Department of Transportationapproved helmet, armor jacket and good boots. If you have a friend or loved one who will be riding with you, show them the same respect and love and buy them the same safety gear you wear. As a starter, I would budget at least $1,000 for safety expenses.
Count on spending a few hundred dollars or more each year on tires and maintenance. These are variables that depend on your riding habits and miles.
When you talk to your insurance representative, ask them about additional medical coverage — particularly motorcycle bodily injury liability insurance. Depending on the state in which you are insured, the minimum personal injury medical coverage is not enough for a motorcycle accident. A motorcycle accident can cost anywhere from $2,500 to $1.5 million in hospital bills, lost income and property damage.
These dollars and numbers can be scary, but riding is a fun and liberating experience. Each mile can bring you new friends and adventures.
If there is a topic you would like to discuss, contact me at firstname.lastname@example.org. RIDE SAFE!