Motorcycle Math 101

[Gisser]

Motorcycles have traditionally been the poor man's transportation. A comparatively low purchase price, super fuel economy, and low operating costs make the motorcycle the vehicle of choice for the financially challenged.

Let's take the case of a guy who finally finishes school and starts his first real job. The first thing he does is dump his faithful bike and buy a new car. The median price for new cars is now about $25,000. To that must be added about $2K in sales tax, another $500 or so per year in registration and insurance, $70 a month for gas, and about $30 per month for maintenance. If our young man was naãve enough to take out a loan for his pride and joy, add another $5K or so.

Motor vehicles depreciate faster than almost any other purchase. Our young man can kiss about 30% of his new car's value away after the first year or two. From then on, it loses value at about 10% per year.

Now, let's look at Mr. Cheapskate who continued to ride his beater.

Mr. Cheapskate takes that $25K and invests it in the stock market. Because he is young and doesn't know anything about stocks, he chooses the safe route and puts it into a conservative mutual fund that earns him 8% a year. In ten years, that $25K will grow to about $50K.

In other words, while Mr. New Car is blowing about $25K, Mr. Cheapskate is earning about $25K. That's a difference of $50K. Or, the difference between becoming wealthy and staying poor.

So, what kind of motorcycle is best if want to get rich? Obviously, an inexpensive, simple bike that you can maintain yourself.  It should be air-cooled, have no more than two cylinders, and offer easy valve adjustment.   The lighter the machine is, the better the fuel mileage and the less you'll be spending on tires and chains.

http://superbikeplanet.com/2006/Mar/060320b.htm

That's why my newest bike is 20 yrs old.  Buy what you need and not what you want and this pasttime can last a lifetime (although motorcyclist lifespans may be statistically shorter than average!).   

[My Name Is Dave]

I like the theory behind it, but what year was this written? $500 a year on car insurance would be sweeeeeeeet! Of course I pay much less than that on the GS, but a tad more on the car.

Regardless, that's a cool way of explaining why motorcycles are so damned much better.

[JetSwing]

I like the theory behind it, but what year was this written? $500 a year on car insurance would be sweeeeeeeet! Of course I pay much less than that on the GS, but a tad more on the car.

it was written this week...seems that he knows motorcycle math but not any other math 

[Jeff P]

The problem with this sort of logic is that it only works if you can get along with a bike alone.  I can't.  Motorcycles and cold or wet weather just don't mix very well.  Can't carry passengers, go long distances, bring home things from the store, etc.  For the majority of us who have both a car and a bike, the bike is an unnecessary luxury item.  Even if it's an inexpensive bike like the GS.

jeff

[thedonuk]

The problem with this sort of logic is that it only works if you can get along with a bike alone.  I can't.  Motorcycles and cold or wet weather just don't mix very well.  Can't carry passengers, go long distances, bring home things from the store, etc.  For the majority of us who have both a car and a bike, the bike is an unnecessary luxury item.  Even if it's an inexpensive bike like the GS.

jeff

Maybe you cant, one can do anything in the wet/cold on a bike if you are determined and prepared enough... Just take it very easy with a pillion, Buy some nice thermals and waterproofs and a f%$koff bungee net/ panniers. You CAN do it, and alot of us DO it. I live in London, its way to expensive and impractical for every reason (bar safety) to own a car here.

[werase643]

the math is wrong

how can mr cheapskate have 25k?   he just finished school  he is already 20-80K in debt

[pandy]

the math is wrong how can mr cheapskate have 25k?   he just finished school  he is already 20-80K in debt

That's for DAMNED sure! Having 25K after school! 

[Mandres]

The problem with this sort of logic is that it only works if you can get along with a bike alone.  I can't.  Motorcycles and cold or wet weather just don't mix very well.  Can't carry passengers, go long distances, bring home things from the store, etc.  For the majority of us who have both a car and a bike, the bike is an unnecessary luxury item.  Even if it's an inexpensive bike like the GS.

jeff

Bingo!  I'm married with a young son so there's no way the bike could be my primary transportation method.  It's just a toy.

[Jeff P]

...jeff

Maybe you cant, one can do anything in the wet/cold on a bike if you are determined and prepared enough... Just take it very easy with a pillion, Buy some nice thermals and waterproofs and a f%$koff bungee net/ panniers. You CAN do it, and alot of us DO it. I live in London, its way to expensive and impractical for every reason (bar safety) to own a car here.

More power to you, seriously  , but suffice it to say relying on a motorcycle as a primary means of transportation, year round, is simply not a realistic option for most people.  Or most Americans at least 
jeff

[thedonuk]

I am dreading the day i am forced to buy a cage, no doubt i will because of responsibilities etc... ahh well might as well enjoy the freedom now.

[nemesis109]

25k for a car? Who said you had to go out and spend that much on a car. My last 2 vehicles brand new where around 15k. Also who is gonna have right out of school 25k to throw in the bank? Hell I haven't been in school in years and I still don't have 25k in my account. Nice try for justifying a bike over a car though

[Gisser]

Nice try for justifying a bike over a car though

Actually, what I took from that article was how important it is to preserve your capital starting at a young age.  Not so much bike VS car--cars are way more practical. 

So think twice about moving up to that new Gixxer, new Ninja, new Z750, whatever.  Seven-to-ten thousand dollars is a huge chunka change and it don't come easy.   

[RVertigo]

Well, my GS cost more than twice my first two cars combined...   

I think it's more about thinking about what you spend your money on, rather than "upgrading" to something you may not need.

[nemesis109]

Nice try for justifying a bike over a car though

Actually, what I took from that article was how important it is to preserve your capital starting at a young age.  Not so much bike VS car--cars are way more practical. 

So think twice about moving up to that new Gixxer, new Ninja, new Z750, whatever.  Seven-to-ten thousand dollars is a huge chunka change and it don't come easy.   

True about cars being more practical but I am pretty sure that the majority of us ride for recreation and not so much as an everyday need. I just felt that the author of that article was trying to show how much cheaper it would be to own and ride a bike compared to that of a car, which of course would cost more. I don't plan on staying with the GS forever and when it financially sound for me to move up to a newer bike I eventaully will, but right now I am happy with my good ol' GS 

[vtlion]

I would also love to know the name of that "conservative" fund that is earning 8%.  Maybe in the late 90's... but certainly not today. 

[pantablo]

what isnt factored in is that the graduate actually LEASES a BMW 3 series, which includes all maintenance and only pays for tires for the life of the lease, then buys the car outright after 5 yr lease for less than bluebook. He has a car to take prospective investors around to looka development properties. Then he then marries a hot rich babe working in the investment field, making money from investing the cheapskates mutual fund.

[werase643]

i have never talked to anybody who did a lease/buy that actually got a good deal
last one i heard of(Wif's co-worker) was a 5 year lease with a 8 year pay off after the lease....13 yrs on an Altima

the smart consideration would be to buy a cheap car and keep a cheap bike
cheap cars(hoopty's) do not depreciate
I sold my last cheap truck for 100 more than i paid for it
bought it for 1400 w/ 267k
sold it for 1500 w/ 355k 3 yrs later

the central american dealer was going to install a speedo cluster with about 125k on it

[vtlion]

i have never talked to anybody who did a lease/buy that actually got a good deal

Pleased to meet ya!!! 

My girl's dad has leased 3 different beamers... two 3-series and a 5-series.  He seems to have a knack for it.  In the final analysis, for the term of the lease payments are  less than we would have made to buy a honda accord, and at the end of the term each time we buy the car for less than blue-book and can turn around and trade or resell it.  And the bonus is (as pablo already pointed out) that it is practially maintenance free.

All of that being said... I still like my scoot better   

[pantablo]

thank you, vtlion, but you all also miss one great point...as a business owner I lease as a business expense. I couldnt gain as much overall benefits if I purchased.

having said that, I bought my car outright and own it. BUT, if I were to need to get a new car for whatever reason it would be a lease on a G35.

[RVertigo]

My wife has leased two cars.  And in both cases, she took the option NOT to buy the cars.

She had two brand new cars for three years each...  When all was said and done, she spent less money on the cars that she would have if she financed them from the beginning.  If you think about how much money you lose the second you drive a new car off the lot, leasing becomes more inviting.

Now...  If you're looking to buy a car and keep it for 20 years, then buying new is totally the way to go...  IF you think the car will actually last 20 years.  Maintenance is the killer on 10 year old cars...  Worse than a car payment.

I dunno...  I don't ever want to buy a new car again...  I hate new cars.  I want a car built before I was alive.  I want a car that a backyard mechanic can work on for CHEAP!  I want a 1954-1965 VW Bug...