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Many of us make lists of considerations before purchasing a bicycle. Things like comfort, purpose, brand, design standards, durability and maybe even colour might make that list. But one thing that is unlikely to break the top five is the potential resale value of the a bike.
Advertisers and marketers sell these ideals to us. They rely on us having a weakness for stretching the depth of our pockets further than we should. They inject us with streams of positive and happy images of open, sunny trails or fast countryside lanes. Or colourful, clear urban routes.
You may not be OK with that principle but manufacturers have always tended to produce models for each type of buyer. Budget is probably number one on most buyer’s list of considerations.
If you are a short-distance commuter, you may only spend a relatively small amount on your bicycle. Your use for it is spartan, functional. If it is stolen from your place of work or railway station, you shrug your shoulders and replace it. You’ve already forgotten what colour it was. You don’t care about its resale value because you use it like a pair of sneakers.
If you like to push yourself on steep, rugged yet fast terrain, you may go for a niche electric mountain bike with the latest suspension technology and long-life battery. You degrease it, lube it and prep it after each ride. Its cost may make you blush when in polite circles. But you adore it. Your social media is festooned with images of you and it traversing continents, smashing KOMs, living your best life. You don’t care about its resale value because it’s a cherished member of your family. You clean it more often than you clean your dog.
Bicycles are designed in a way which means that components wear out and need replacing. The cost of replacing these moving parts is a consideration when looking at value and will increase depending on the frequency of use.
There are countless other reasons for buying before thinking of resale value. But are you missing out if you ignore it? Can you find room for warranty-transfer opportunity, depreciation, value-in-use, and opportunity costs alongside tyre grip, dealership networks and frame colour? Do you need a degree in economics to invest in a bicycle, or to at least placate others in your circle that you’ve made a sound, if potentially more expensive, investment?
Do Bicycles Hold Their Value?
On the whole, no. Bicycles are not typically manufactured, nor bought and sold, to hold their value. It falls as soon as we first swing our leg over the saddle. We use it, we contribute to wear and tear. Its components are constantly refined and updated which reduces value for soon outdated parts.
It’s important to balance the value lost with how much we have gained over the lifetime of our ownership. That includes the physical and mental health benefits, reduced day-to-day transport and parking costs, and time saved with each commute.
Most manufacturers would like us to buy new bicycles from them every three years or so and build marketing strategies around this. Model updates and the desirability factor of newer machines affect the value of a bicycle.
More expensive bicycles from brand leaders with a reputation for winning professional races with high-quality components attract desirability and some more value. The US company Specialized went one step further when they created S-Works; a premium ‘brand within a brand’, to ramp up the kudos and premium status of ownership. At the time of writing, a 2020 model S-Works Enduro 29 mountain bike is £8,999 / $12,366 online, direct from Specialized. In very good condition, it is estimated that the value one year later would be up to £7,487 / $10,289.
At the less expensive, more functional end of the scale, it could be argued that bicycles hold some of their value too. If the price point is much lower, there is less money to lose from the outset and shallower intake of breath when you receive an offer for it. The market for buying second-hand mass-market bikes is usually on auction sites like eBay or Craigslist. You can ride away a new 2021 model B-Twin Riverside Hybrid Bike for £230 / $316. Within the first year, the model is offered, used, on eBay for £115 / $158.
How Much Value Do Bicycles Lose?
With many influencing factors, called market forces, and more than one way to calculate loss in value, no one can be precise. After the first year, it might be expected that the value of a new bicycle with one year of average use will fall by 50% and then 10% for each year of use after that.
From the earlier example, the Decathlon bought B-Twin Riverside Hybrid Bike above validates this. But the S-Works Enduro 29 mountain bike was estimated to have dropped by just 17% in the first year.
Market forces represent the current philosophy and bias of each of the buyers and sellers of bicycles around the time of sale. As we write in September 2021, some models are in short supply due to delays in producing their components. Global brands still mass-manufacture even at this end of the price range.
This makes market forces for the very good condition 2020 S-Works Enduro 29 tip in favour of the seller. There may be more demand than usual for an older model when the 2021 or upcoming 2022 version has a long or unknown waiting list. More demand and limited supply usually means higher prices. And therefore value is retained. This is just one example.
Bicycle Depreciation Rate
Depreciation is defined as ‘the annual allowance for the wear and tear, deterioration or obsolescence of the property’. Accountants and finance managers employ depreciation rates on company assets such as buildings, production line equipment and office furniture. There is more than one method for calculating this allowance, depending on the asset and how it is used.
The ‘straight line’ depreciation rate reduces the value of your bicycle equally each year over its useful lifetime. A £1,000 / $1,384 bicycle, given a useful lifetime of 5 years, would be said to depreciate by £200 / $277 each year.
The ‘accelerated’ depreciation rate reduces more of the value of the bicycle earlier within the period of its useful lifetime. The depreciation rate reduces towards the end of its useful lifetime. This seems the more appropriate method of calculating a bicycle depreciation rate than the straight line method due to the proportionately high loss in value at the end of the first year of ownership.
Bicycles typically lose 50% of their value in their first year, followed by a 10% depreciation each year after that.
Bicycle Deprecation Formula:
(PURCHASE PRICE ÷ 2) × 0.9ⁿ = CURRENT BICYCLE VALUE
Obviously this is very generalised, as the condition of the bicycle will also be a key consideration, while the popularity of the brand and model will also have a significant impact in the perceived value.
Which Bikes Hold Their Value?
Top-level race success, sponsors and influencers, universal appeal and lack of very specific niche technologies contribute to a slower depreciation in value. Standards in design which may stand the test of time for longer do better. Choosing a timeless frame colour will help.
Key changes in bicycle technology play a part in determining value. Mountain bike designers introduced the 29 inch and 27.5 inch wheel to improve traction, grip and control. This quickly reduced the value of mountain bikes with 26 inch wheels.
Road bike design has crossed a threshold of brake design in the last five years. Traditional rim brake technology is being replaced by disc brakes. Now competing with rim brakes, disc brake road bikes are now the most dominant in the market.
Rim brakes are perceived to suffer from a design redundancy and lose some value as market forces reduce demand. Although rim brake technology suits some road bike users, many manufacturers have ceased production of rim brake bicycles. Their perceived usability is hindered and the universal value falls.
The feeling for the strong brand in the eye of the mainstream helps bikes to hold their value. They review well, usually have a good dealership network or local bike shop support and a track record for quality. This will all help you if you buy new.
Buying direct from the manufacturer might also help when buying new as you avoid contributing to the margins that a dealership or local bike shop collects if you buy from them.
Do Road Bikes Hold Their Value?
Overall, depreciation rates are no different in road bikes from other bicycles you can buy. A titanium frame, universally recognised for durability, allied to high quality components from a strong brand who wins races, will hold value more than a carbon / steel bicycle in similar condition. Damage harms value.
The popularity will influence the number for sale on auction sites or specialised second hand sites. Attracting buyers requires a detailed listing and accurate history of use to achieve the best value.
Do Giant Bicycles Hold Their Value?
Giant Bicycles have a reputation for quality and dependability across their wide range. They are one of the largest frame builders in the world. They have been in business for over 50 years and have a universal appeal. All of these factors help when weighing up long term value.
A 2020 Giant ToughRoad SLR 2 aluminum hybrid bike would cost £759 / $1,050 new. In good condition the value would be up to £605 / $837. This model retains more value than the average.
Do Trek Bikes Hold Their Value?
Trek invests in frame geometry design and is innovative. They have a reputation for quality and comfort. Trusted around the world, they support pro teams to enhance the value of their products and they have a wide support network.This helps build confidence in their offer and supporting value.
A 2019 Trek Domane SL7 Disc Women’s road bike would cost £4,178 / $5,780 new. In good condition, the value would be up to £2,351 / $3,252. This model retains more value than the average.
Bike Brands That Hold Their Value
All of the above brands are oozing with the factors and reputation which make their bicycles desirable and in demand. They have a very loyal fanbase which keeps positive reviews flowing from followers and the media. All very useful in attracting customers and value.
Yeti and Colnago hold iconic status which turn heads on the trails and roads. They have heritage and class. Pinarello and S-Works have modern, race-winning heritage allied to build quality which makes them an alluring package.
Santa Cruz and Canyon produce lower volumes without compromising quality or research and development. Santa Cruz hand-assemble their bicycles under one roof in California. Canyon only sell their bicycles directly to the public which reduces the loss in value to the new owner as it cuts out a retailer margin. Although there is no dealer network the brand is trusted by local bike shops so value is protected.
Which Bike Has the Best Resale Value?
With so many variables and no budget, this feels like an impossible task. We can narrow our search by looking at constant factors like using the same resale websites, only look at mountain bikes and road bikes in good condition from 2020 and from brands with universal appeal.
With this in mind, using exchange rates at the time of writing, we only look at 2020 models of road and mountain bikes, in good condition, from well known brands with universal appeal, it is hard to see past the Specialized S-Works Venge Disc road bike.
It has race-bred credibility and loyal followers flock to the brand. The frame is of a universally-accepted design and components are high quality. The eye-watering price of new models shores up the one-year price for a new model. Then add in some emotional and unproven factors such as kerb-appeal and an expected top-level maintenance programme (S-Works bikes can include 3 months free maintenance from new) from a hopefully careful and trusted owner. After all, they will have paid £9,035 / $12,500 new.
TOOL: Which Bike Should I Buy?