250Renvy
04-16-2007, 05:32 PM
I thought I'd share my philosophy of ATV pricing and get some opinions/ feedback.
This mostly comes from repeatedly seeing the phrase I have $XX dollars into something...
Being that I am into 250R's and other "RACE" quads, I'll use the example of a person who has spend $20 000 on their race quad be that it's a 250R, 450R or 400ex or Suzuki or anything.
When you choose to race, ride or play you are choosing to put your free money into something. Thus when you spend $15000 on your quad to race that is the "Cost" of racing. If you were to do a budget for the year then that is how much you spent on racing. Should you decide not to race anymore and you want to sell the quad, ANY money you get back out of it should be what I call "bonus money" whether it be $1 or $8000. Sure there is some value to the quad but it is not usually even half what you put into it. You cannot expect a return on investment with these things. It's like trying to sell a car with 200000 miles and saying I put $25000 worth of gas into it. (maybe a bad example)
It's not an investment, it's supposed to be disposeable.
There are many people that finance their quads. That's fine, I have no problem with that, but you should only do so with the notion that you are spending more than the actual price and factor that into it. I laugh and mock people (for their financial stupidity) that finance a quad and pay the minimums and thrash on it, only to sell it a year later for well below what they still owe.
They try to sell a used quad for the same price as a new one because they've only paid the iterest and no principal. Or even worse is when someone (a guy I knew) financed his bike at 23%. Yikes wake up, you can't afford it.
Another 250R example is that of people who have owned one for 10+ years, Paid $2000 for it and see them going for $4000 and try to sell them for $4500. My philosophy is that you got your use out of it and sure $4000 makes it a 'good investment' but somebody would probably really like to ride that and 'refresh' it for $1500 - like I said, it's bonus money.
A friend of mine recently looked at a 1999 400ex with 5 hours on it. The guy wanted $500 less than a new one. Which is probably what he paid for it in 1999. The reality is that these things depreciate and you can't buy something new and not use it and expect it to increase in value. It's still old with no warranty
On a positive note, from experience I know that almost everything will sell, whether it be 2 years or 4 years. So if you want a certain price for something and you don't need to sell, hold out. Eventually it will sell, but keep in mind for things that depreciate, sometimes you hold out for more money on your quad and it takes 2 years to sell, but in those 2 years it's depreciated double what you were holding out for. So you're trying to get $6000, someone offers you $5000 but newer, better stuff comes out and 2 years later it's worth $4000
Happy selling - and if anybody actually read the whole thing I'd be interested to know others philosophies of pricing.
This mostly comes from repeatedly seeing the phrase I have $XX dollars into something...
Being that I am into 250R's and other "RACE" quads, I'll use the example of a person who has spend $20 000 on their race quad be that it's a 250R, 450R or 400ex or Suzuki or anything.
When you choose to race, ride or play you are choosing to put your free money into something. Thus when you spend $15000 on your quad to race that is the "Cost" of racing. If you were to do a budget for the year then that is how much you spent on racing. Should you decide not to race anymore and you want to sell the quad, ANY money you get back out of it should be what I call "bonus money" whether it be $1 or $8000. Sure there is some value to the quad but it is not usually even half what you put into it. You cannot expect a return on investment with these things. It's like trying to sell a car with 200000 miles and saying I put $25000 worth of gas into it. (maybe a bad example)
It's not an investment, it's supposed to be disposeable.
There are many people that finance their quads. That's fine, I have no problem with that, but you should only do so with the notion that you are spending more than the actual price and factor that into it. I laugh and mock people (for their financial stupidity) that finance a quad and pay the minimums and thrash on it, only to sell it a year later for well below what they still owe.
They try to sell a used quad for the same price as a new one because they've only paid the iterest and no principal. Or even worse is when someone (a guy I knew) financed his bike at 23%. Yikes wake up, you can't afford it.
Another 250R example is that of people who have owned one for 10+ years, Paid $2000 for it and see them going for $4000 and try to sell them for $4500. My philosophy is that you got your use out of it and sure $4000 makes it a 'good investment' but somebody would probably really like to ride that and 'refresh' it for $1500 - like I said, it's bonus money.
A friend of mine recently looked at a 1999 400ex with 5 hours on it. The guy wanted $500 less than a new one. Which is probably what he paid for it in 1999. The reality is that these things depreciate and you can't buy something new and not use it and expect it to increase in value. It's still old with no warranty
On a positive note, from experience I know that almost everything will sell, whether it be 2 years or 4 years. So if you want a certain price for something and you don't need to sell, hold out. Eventually it will sell, but keep in mind for things that depreciate, sometimes you hold out for more money on your quad and it takes 2 years to sell, but in those 2 years it's depreciated double what you were holding out for. So you're trying to get $6000, someone offers you $5000 but newer, better stuff comes out and 2 years later it's worth $4000
Happy selling - and if anybody actually read the whole thing I'd be interested to know others philosophies of pricing.