The sunny side of the classic world, with the VJMC' s Steve Cooper
Have you bought a bike from a dealer-cum-classic bike specialist? Was it a positive experience or something you’ll not be repeating any time soon? Dealers seem to polarise opinion with many classic enthusiasts simply because they (the buyers) somehow believe dealers shouldn’t be charging the prices they do. And on exactly the same tack many dyed-in-the-wool classic fans perceive dealers as the sole reason why classic machines have spiralled up in price. Is that the case or is there another side to this? Well let’s be perfectly blunt here, dealers are in the game to make money. What they’re not likely to do is sell bikes at below the market rate, subsidise your impending purchase or take a financial hit on every sale. The dealers selling old bikes commercially have to make a living and, despite what some folk would have you believe, it’s not all beer and skittles out there. Here’s one very hard and large fact: dealers sit on dead stock and dead money until a given machine is sold. Until the bike leaves the premises and the dosh changes hands the dealer is effectively losing money. Suppose a dealer buys up a small collection of bikes, perhaps half a dozen, and pays a little below the market rate because he’s taking the lot. He only gets that money back (and any profit) once each of those machines is sold. Some might fly out the door in which case happy days etc. but what about the ones that don’t sell quickly? Let’s assume we have a tidy and early CB500/4 in close to peak condition and our fantasy bike dealer wants £6000 for it despite only buying it in at £4000. So that’s a tidy two grand profit? Well that’s a yes if the bike is sold immediately but a firm no if the bike doesn’t shift. So knock off around 3% per year for inflation and perhaps another 1.5% for lost bank interest off the cost of the bike’s initial purchase price. So that’s the thick end of 5% before anything else happens. Now factor in advertising costs at near on a grand a month if the bikes are flagged up in three or four magazines. Oh and don’t forget all those back office costs such as heating and lighting along with staff wages. It’s all beginning to mount up suddenly isn’t it? This is a large part of what you are paying out for when you buy a bike from a dealer. Still think you’re being taken for ride? Then try this one… take four grand of your own money, stuff it in a sock and leave it on your work bench for two years. Doesn’t make any sense whatsoever does it? Yet that’s what you, me and every potential classic enthusiast is expecting each and every dealer to do. Oh and you expect a warranty as well? Suddenly the maths might just begin to stack up!