Investment grade classic bikes

Investment grade classic bikes can be a contentious expression. So many people are demanding that we don’t invest in their favourite old motorcycles, but it’s too late. All tangible assets are creating their own markets and there is nothing anyone can do about it, unless they want to come up with a better performing and more fun financial product themselves. The range of buying platforms is fairly obvious there’s the motorcycle shop who need to sell you anything on their showroom floor. The auction house who offer a motorcycle with no guarantee, sold as seen and not running with no come back on the auction house. If something goes wrong you have to sue the seller personally, which is a very costly process. There are auction site which offer nothing more than an auction house along with other internet sites which offer no back up as well. The Motorcycle Broker finds you the motorcycle you want to invest in, not something they have in stock. They deliver a full due diligence report after ensuring it is an investment grade example. However, that is not enough, as investment grade means as good as the day it was delivered new from the factory. With the machines being so old today, this requires extensive days in the workshop and in the paint shop, along with extensive test riding. The Motorcycle Broker delivers all of these with your investment grade classic bikes.

Investment is not what you paid but what you sell it for

A simple question. A 1976 Ducati 900SS bought for £6,000 in 2010 in absolutely correct investment grade condition and set up correctly. At the top price, maybe a bit over, in those easy going days. Sold for £50,000 today and still in perfect condition, some servicing was done, it covered 10,000 miles over that time but wanted for very little. A similar 900SS bought in 2010, but the silencers were a bit corroded, the carbs weren’t quite right and needed replacing, rims were Akront, nice stainless spokes and it did vibrate a bit. Looked tidy enough but bought for £4,500. Which bike would you have bought in 2010? How much would the second 900SS be worth now? Probably around the £25-30,000 mark. Most would have paid £4,500 for the cheaper bike because it was just….cheaper. Why should they have paid 33% more? Because the crank was going, the pipes were rotting from the inside out and the carbs needed replacing and that was just what you could see at face value. Believe me it would be worse the longer it was on the ramp. As for those wheel rims, it would never get another set Borranis again, so it would never be perfect.

Upward line graph

It’s not just about the profit

It’s not just about the profit, it’s about the head ache, heart ache and bad value offered by the cheaper machine. When clients are always looking for the bargain and the cheapest, I never deal with them. Because I don’t want to be in the firing line when it goes wrong. If that motor was too shaky then the crank needs replacing. It could have damaged the cases and a Bevel drive rebuild will certainly cost many, many times more than the £1,500 saving over the £6,000 machine. Then there’s what you can’t see at the appraisal, but you can as you investigate after putting it on the ramp. Motorcycles never have just one thing wrong with them. The one obvious thing that has gone wrong is usually caused by many other things that been neglected. A bike is either neglected or it’s not. The crank didn’t go just because they only neglected the crank. It’s gone because they neglected the entire motorcycle.

piles of money

Where do you buy investment grade classic motorcycles?

Where do you buy investment grade classic motorcycles? Certainly not on eBay or at auction. Mostly not at motorcycle dealers. As only 8% of classic motorcycles are investment grade, the other 92% are certainly not and can’t be made into an investment grade piece most of the time. Auctions off no guarantee and you buy with no due diligence, no come back and you can’t hear the motorcycle running. Auction sites are where people sell their old junk. Have many Picassos been sold on eBay? And why not? Motorcycle dealers cannot function by competing for the top 8% of classic motorcycles that are investment grade. If they did, then you would be paying about five times as much for them as you can acquire them for today. You buy them calmly, in a no pressure environment from a third party who investigates the machine fully from a trusted collector. It requires enormous investigation before any money changes hands with people on the ground where ever the motorcycle is located in the world. the Coronavirus has proved that we don’t need pressurised auctions to buy an investment grade classic motorcycle. Motorcycle brokerage is rapidly becoming the way to truly know that you have bought an investment grade classic motorcycle.

Due diligence is everything

Due diligence is everything and we go to depths that no motorcycle dealer can reach. We go into depths that private buyers can’t We have decades of motorcycle buying experience behind us that no private buyer can have. We don’t just buy the bike, clean it up and deliver it. We put it on the bench, remove all body work and then we investigate it to to put it back to the condition it left the factory in when new. If there’s a problem, then we get a bloody nose, not our buyers. And we fix it. Free. If we remove the bodywork and the paint is chipped and there’s corrosion, then we put the bike in our spray booth and we blow in any paint problems with airbrushes. Unless it is a museum piece that is totally unrestored, in which case we go through everything with the owner before touching anything on the bike. We give video reports and come to decisions together about what to do. The problem is that if there is broken paint on the frame under the body work, or corrosion, it will only deteriorate over time. What is usually prudent (there are exceptions to this) is to repair the damage there and then, invisibly and leaving as much of the original paint in tact as possible.

New Honda CBX1000 front 1

Putting it back to factory spec

We have never yet bought a motorcycle that has been set up correctly. When these machines left the factory they were set up correctly. After forty or fifty years of being laid up, or repaired by people who just shouldn’t have, most machines require an awful lot of fettling to get them right. Once they’re right, they require very little maintenance indeed. Mostly just oil and filters for the most part. But getting them to that condition is often a long and winding road of undoing disgraceful work carried out over the previous four decades. Some of the worse work we’ve encountered has been by official dealers, but more on that soon with an exciting video coming out soon. Classic motorcycle investment is hard work. It’s not just pot luck.

Where are all the bargains then?

There are no bargains when buying investment grade classic motorcycles. Why? Because the investment grade machines are all in very strong hands and they know what they have. If you want a bargain, go into a Ferrari dealer and offer them 60% of their asking price and see how far you get. Investment grade motorcycles cost what they cost because the bargains will always prove not to be bargains. they always cost more. I spoke to a colleague in the market in 2018. He had bought a Sandcast CB750 for 312,000 needing restoring. this colleague is one of the finest restorers I know, and he works fast. He handles most of the work himself and is a very fine engineer. He confided in me that it cost him a total of £45,000 to complete his Sandcast, plus his time. If he can’t get a bargain with the sweat of his brow, then no one can. It’s not about what you paid for it, it’s about how much you sell it for. You have to pay for quality and that is a fact of life.

74 750SS green frame SQUARE WEB

How do I buy an investment grade classic motorcycle

Once you realise that it’s easier to pay people who do this for a living and understand that you want quality classic motorcycles, then come to us. At The Motorcycle Broker we do everything for you and you can rest assured that you are the owner of an investment grade classic motorcycle that will return you the best profit on your investment. It’s a five to ten year investment, you can’t just flip these machines. If you want to flip bikes, go to eBay and car and Classic and see how far you get. You may get lucky once or twice, but it won’t be worth the effort on those few occasions you do. The rest of the time you will loose money, because that is not how the market works. It is a buy and hold market and while you hold these wonderful machines, you can have a great time riding them. If you want to understand more about the classic motorcycle market, call The Motorcycle Broker. If you want to flip motorcycles, then have a go and then come and speak to The Motorcycle Broker by calling 01803 865166.

Paul Jayson

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