BUY NOW & PLAY LATER
Why you should grab a new bike, fast!
Buying a bike is a big financial decision, so it’s easy to understand why many people might be tempted to put it off. But if you’re lucky enough to be able to buy a new machine there may be no better time to do it. A host of external influences have come together to create a market that puts buyers in an unusually strong position, but it’s not going to last forever.
What’s created this situation? There are several separate elements that have come together but the most obvious is the Covid-19 pandemic and economic disruption it caused. The initial ‘three-week’ lockdown that came into force on March 23, forcing non-essential retail outlets such as bike dealers to shut their doors, eventually dragged on for more than two months, ending on June 1.
The timing meant that dealers missed out on the peak sales period for new bikes, just as the latest 2020 models were coming into stock and as the weather improved. Since lockdown ended motorcycle sales have been booming – they were up 42% yearon-year in July – so don’t expect big outright discounts, but even so there are several factors that make it cost-effective to buy a new machine right now.
Factor 1 There’s a serious used bike shortage
With dealers closed during spring there were no trade-ins to supply the machines that make up the backbone of the used bike market. The result? Secondhand motorcycles are unusually expensive at the moment. Those high used prices mean the best deals are for riders with an existing bike to trade-in or sell. Whether you’re chopping it in at a dealer or putting it on the market yourself, you’re likely to get more money for the old model than you might have expected.
‘Cost to change’ – the difference in price between the bike you’re selling and the one you’re buying – is much more important than the outright price of a new bike. Many dealers are offering cash incentives of hundreds of pounds to trade in.
Factor 2 Interest rates are remaining low
In the weeks before the lockdown the Bank of England slashed interest rates from 0.75% to a record low of just 0.1%. Even after the financial crisis of 2008-9 it only dropped to 0.5% - so it’s at a just a fifth of that at the moment. That means if, like most people, you’re buying a new bike through finance, either HP or PCP, you’re in for a good deal. Some manufacturers are offering zero percent on selected models.
Factor 3 High GFVs
The high demand and prices for used bikes give you a doublewhammy if you’re buying via a PCP deal, as it means GFVs (guaranteed future values) are on the rise. The GFV defines the size of the optional final balloon payment at the end of a PCP deal. If it’s bigger, the monthly payments are smaller, and if – like most PCP customers – you trade in instead of making that final payment, the overall cost of ownership during the PCP deal is lower and more attractive.
Factor 4 Euro5 rules are coming in very soon
The new Euro5 emissions limits are due in force from January 1, 2021 for all new machines, and that means a fair number of existing Euro4 models are expected to get tweaked, updated or replaced for the 2021 model year.
As long as you’re not desperate for the latest, 2021-spec bike, that could be a bargaining lever on the old, Euro4 machines. However, be aware that stock levels for many bikes aren’t high because factories closed during the lockdown, so don’t expect big discounts on the most popular models.
● ‘We’re seeing a big growth in commuter bikes’ STEPHEN LATHAM, INDUSTRY INSIDER
● ‘Many dealers are offering incentives worth hundreds’