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A recent discussion over at ducatipaso.org has had me thinking about the market value of the inventory in the garage. First, a couple of observations: Many bikes never make the reserve price the seller has set for them on eBay. This means that the seller thinks a local buyer will spend more (true, if they save on shipping) or that the seller more simply has unrealistic expectations about what the market will bear. Several makes of motorcycle appear to be more prone than others to this high reserve phenomenon, including Harley-Davidson and Ducati.
EBay sellers appear to be trying to sell their "old, used" motorcycles as "classics." Alternatively, it may be that sellers have so much invested in their bikes both in terms of initial investment and accessories (chrome for Harleys, carbon for Ducati's) that they have inflated for themselves the worth of the machine to anybody else. As was pointed out on the message board, sellers often find that the value of the parts is greater than the motorcycle they have assembled, and decide to strip off the goodies before selling.
Some motorcycle-wheeler-dealer types watch the eBay auctions with an eye to estimating the present net worth of our fleets. As buyers, we are interested to know when a "bargain"—ie a bike selling for less than similar ones have recently sold for—comes up. From Econ 100 we recall that the value of something is no more or no less than what someone else will pay for it: the supply and demand curves intersect at price.
While motorcycle purchases are seldom rational, they often need to be rationalized. I recall each of the home purchases I have made. In each instance, the house would have been perfect if we could have paid less for it. But each time, the decision was in the final moment an emotional one. We bought because it just seemed right. And while motorcycle purchases are not driven by necessity, the same rule applies. As long the bike is one we really want, we can be fairly sure that we are not overpaying for it (meaning in almost all cases that the seller feels we are underpaying for it), and we have the necessary ducats, we will go forward with the sale.
Posted by Underblog at March 4, 2008 6:00 AM
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