How to calculate the price of the used bikes?

[Venkatesan Ramachandran]

Hi Friends,

Need some suggestion on selling the used bike. My sister will be relocating to Abroad shortly, and she is planning to sell her 1 year old sparingly used Hercules Act 110 Hybrid bike. Bike is in very good condition, and has been driven around 200KMs only.

Purchase cost - 14K
Colour - Blue
Make - Hercules Act 110
Accessories - Basic lock and helmet
Reason for selling - relocation

Any suggestions on the price that we can quote? I wish we have something like carwale.com to calculate the price of the used bikes :)

Cheers
Venki

[Anil Kadsur]

Venki,

i find this really a difficult task, some experts here can help you.

anil s kadsur

http://kadsur.blogspot.in/

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[Mayank Rungta]

Actually it is difficult as it is subjective. Some people are willing to pay higher for certain brands and particular models than others. What I typically do is look at the condition of the bike currently and estimate what it would take to make the bike good as new. I deduct minimally that much amount from the amount the person paid for the bike. Number of years are accounted for as the price is normalized (this is coz the price has only been increasing but for few minor exceptions).

Hercules Act has seen some issues on this forum with pedals and saddle so that would affect the evaluation of the bike.

I am willing to overlook depreciation due to age for some bikes as I know that some of the older models were better than the newer models. Most companies increase the quality of a bike each year but Merida has been very inconsistent. I like their bikes so make exceptions depending on the condition of the bike! :)

[Shaleen Tongia]

According to me - the price you can part away from the bike is all that matter.

[Mayank Kamthan]

actually bikes are assets now.. 

i bought a Schwinn sporterra sport in Feb 2011 for abt 16k.. now its around 30k.. 

so i think resale price can be higher than the purchase price!!! :D

so, what is needed is just the mutual consent for the price.. 

Mayank Kamthan

[Rajaram]

My thoughts on how a used bike price could be arrived at. There are several factors and therefore a perfect weightage cannot be assigned.

 

1. Brand, make, Year of mfr - this matters a lot as brand/ make translates in quality of the bike. The better the quality the better the resale price. After all the buyer would be keen to see the 'juice left in the fruit'. E.g. 3 yr old Trek/ Canondale vs. 1 yr old Firefox ???

2. Current mkt price - this would make the buyer compare new vs old - however, if the newer models have better build / features, then that needs to be discounted

3. Condition - this is most imp. thats why most of us tend to sell our bikes at higher price if sparingly used / well maintained.

4. X Factor - this is the key thing which makes the buyer and seller converge on the right price. Price at which buyer is ready to buy and seller ready to part with his bike. Desperation to sell urgently, or special discount to special people would fall under this category.

 

Browsing few sites and speaking to friends here would help you with point 1. Rest of the things would be known to you.

 

Hope this helps.

[Murali Krishna]

My suggestion would be to put a percentage value for depreciation like what we do for cars and bikes. So starting with your purchase price of Rs. 14000. The moment bike is out of showroom, it immediately depreciates by 20%. This value remains till the bike finishes its first year(Rs. 11200). Then it depreciates at 15% per year for the second(Rs. 9100) and third year(Rs. 7000). From third year onwards rate of depreciation will increase to 20% per annum due to natural ageing of the materials used. Thats a good yardstick. People may have other thoughts!!

[deepakvrao]

Nope. If price of new bike has gone up, this is meaningless.

[anil s kadsur]

Absolutely...prices of the bikes are only going up!!

very truly,

anil s kadsur
http://kadsur.blogspot.in/

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From: deepakvrao <deepa...@gmail.com>

Sender: bangalor...@googlegroups.com

Date: Sun, 17 Nov 2013 01:02:12 -0800 (PST)

To: <bangalor...@googlegroups.com>

Subject: [BBC] Re: How to calculate the price of the used bikes?

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[anil s kadsur]

Murali Krishna,

On a lighter note...

If this is how you are going to calculate, please do let me know what bike you ride, am buying your bike if your bike is 3 years old and more!!! (New bike 30,000 - 24000 - 20400 - 17340 - 13872)

At the end of 3 years it is 17,340 and by 4 years 13872. The same bike would be easily costing (considering different brands and type of bikes...) >40,000

Wow, I love to have that bike at 13,872. It is ok whether it is 2010 model or 2014.

very truly,
anil s kadsur
http://kadsur.blogspot.in/

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From: Murali Krishna <krim...@gmail.com>

Sender: bangalor...@googlegroups.com

Date: Sat, 16 Nov 2013 09:23:31 -0800 (PST)

To: <bangalor...@googlegroups.com>

Subject: [BBC] Re: How to calculate the price of the used bikes?

--

[krim...@gmail.com]

Okay anil let's have a discussion here. I have been watching the used bike market for quite some time. The calculations I put are from the buyer's point of view since I was in for buying an used bike myself. This is the value I can put. And its not fair for the seller to take advantage of the current price raise of the particular brand or model. Any bike buyer in the used bike section asks for a bill/invoice to know the value of the original procurement. In absence of bill, the valuation can be reduced further.

Also to argue, 20000km can be kept as end of useful service for any international brand bike. For a commuting hybrid bike the annual run will be atleast 3500km. So end of life will be say end of sixth year. Ofcourse the bike will still run after this period, but how reliably. And what about bike that are under-run their years. Buyers cannot go by the mileage said by the seller and they can be false claims.

In order for us to agree may be the depreciation percentage can be relooked.

Out of showroom till end of 1st year: 10%
End of 2nd year: 10%
End of 3rd year: 15%
End of 4th year: 15%
End of 5th year: 15%
End of 6th year: 15%
End of 7th year: 20%

Its free after that or if still the bike has years left, then it can go for a nominal value say 10% of the purchase price.

People having expensive 2-3 year old bike may disagree. Cos they are looking to sell and upgrade, so this valuation is a mild shock for them.

Anyways I am open to hear true feedback on my statements.

Murali

Sent from BlackBerry® on Airtel

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From: "anil s kadsur" <anilk...@gmail.com>

Date: Sun, 17 Nov 2013 09:15:39 +0000

To: Murali Krishna<krim...@gmail.com>; BBC<bangalor...@googlegroups.com>

ReplyTo: anilk...@gmail.com

Subject: Re: [BBC] Re: How to calculate the price of the used bikes?

[deepakvrao]

Not fair to take advantage of current price? Current price is what counts.

Suppose I buy a bike for 20K, and then Decathalon drops the price to 15K. Would you accept your depreciation theory based on my purchase price? It's happened before too.

[Ashok Kumar S]

Also, even for cars the depreciation calculations are only in theory... Go and look for used Swift, which is 5 years old and none of these computations will get you any where near the market price... And go for a Verna petrol or a Palio in the used car market, the selling prices will be much lower than the calculated numbers. Also, for any car in D-segment and above the resale values will be much less.

In short, the resale value depends on a lot of factors, mainly the demand, brand value, reliability, running cost & so and so... :)

regards,
Ashok

--
Thanks and regards, Ashok Kumar S.

[deepakvrao]

Absolutely true. Many factors come into play.

[Vishnu Janardhanan S]

Hi Murali,

These things look good only in theory (and probably only in Utopia).

As Doc said, if the prices come down would you buy it at a higher price if it fits your calculation?

or take an example of a flat, would you sell your flat at a lower price as per your calculation because it also looses its strength over time?

or would you say that in this area new one will cost so much so my price is this?

IMHO in second hand deals its about finding that sweet spot where both buyer and seller gets a good deal.

Thank you,

Regards

Vishnu

On Sunday, 17 November 2013 16:11:17 UTC+5:30, Murali Krishna wrote:

[Mayank Rungta]

I think I know people on this forum where able to sell bikes at a higher price than they bought it for. All rules go out of the window when the buyer and seller both agree on the value of a bike which may be independent of the age. I know people willing to pay a lot of money for older bullets. Same applies too some bikes! :-)

[mkonchady]

Depends... The use of annual depreciation is a common method to evaluate used assets in the industry. Insurance companies still use this method.

You can always use the current price and depreciate using some percentage. This will take into account the higher price due to inflation or exchange rates.

Add or subtract value depending on usage, damage, etc. and you should end up with a reasonable accurate evaluation.

--Manu Konchady    

[vivek]

Exactly. No matter how many theories you come up with to valuate a bike the final decision is that of the buyer and the seller. It doesn't make sense to follow these theories most of the time.

Regards,

Vivek

[Shankar Shastry]

All these theories are fine and dandy when you write it on paper. When you evaluate from a buyer's point of view, its just current market price vs condition/features of the bike being sold vs condition/features of the current model vs quoted price. You can be a paper tiger and argue about pros and cons and by the time you finish your argument, a good bike priced just right will always find a buyer in a day or two maximum.

[Rajaram]

+1 Anil +1 Deepak.

Am happy to buy Treks, Canondales, Scotts, et al at 'Depreciated' prices from the original rate !!!!

Pls drop me a mail at rajaram.b...@gmail.com.

 

(My trader instinct waking up here).

 

FYI - my cousin sold his 7 yr old innnova at 6.5L which he originally bought at 9L !! Why becos the new one costs 15L.

Friend sold 2 yr old Ritz diesel at 5L which he originally bought at 5.7 L (only 70K depreciation), becos new one costs 6.5L.

 

 

 

 

On Sunday, 10 November 2013 20:22:34 UTC+5:30, Venki wrote:

[deepakvrao]

Yeah, insurance companies are the gold standard. LOL.

You can do whatever calculation you want, but the final price is a result of market place dynamics.