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One thing we've learned in the pandemic era is that change can happen fast and trends can turn quicker than a 250-class motocrosser. Now there's evidence that the trend of ever higher prices in the U.S. used motorcycle market has finally reversed course.
Almost two years ago we published an article titled "Where did all the cheap motorcycles go?" that examined the factors that were making it hard to find a bargain on a used bike. A lot of that had to do with shortages of new motorcycles, due to supply chain disruptions, production shutdowns, and related issues. That insufficient supply of new motorcycles drove up prices of used bikes. As recently as this summer, we posted an article offering some tips about how to buy a new motorcycle in an environment in which new-motorcycle inventories were still lower than usual and there was still a lot of competition among buyers for a limited number of models.
Evidence suggests the trend has now shifted in the used motorcycle market, however. National Powersport Auctions sells tens of thousands of pre-owned motorcycles and other powersports vehicles at wholesale every year at live and virtual auctions around the country. All those sales add up to a significant database of price information and NPA puts out a monthly report on the average selling prices at their auctions and the trends they see.
The October report shows lower prices, year over year, in all five categories of motorcycles NPA reports. Plus, in every month from July on, prices have been lower in every category except for a few exceptions. Compare that to a year ago when the PWA monthly reports were showing big year-over-year price increases in every category.
|
October 2022 versus October 2021 Average wholesale price change |
|
|---|---|
| Domestic cruiser | -12% |
| Metric cruiser | -16% |
| Sport | -6% |
| Dual-sport | -9% |
| Motocross | -8 |
Sure, those decreases aren't big, but they caught my interest for two reasons. First, the October report is not a one-off example. In September, all categories were flat or down except dual-sport. In August and July, all categories were negative. Second, it matches other evidence we're seeing. For example, wholesale prices of used cars are falling, even though that effect has not yet trickled down to the retail prices consumers are paying. It also matches the anecdotal evidence from Common Tread's in-house used motorcycle market watcher, Andy Greaser, who buys and sells more used bikes in a good year than I have in the last 10. He notes that some sellers are still asking inflated pandemic-era prices but those bikes are not moving quickly. And it fits into the broader economic picture, with stubborn inflation eroding household budgets, higher interest rates deterring those who need a loan to make a purchase, and concerns about a possible recession leading some consumers to be more cautious about discretionary, big-ticket purchases.
It's going to take time for this change in trend to work its way through the system. As the NPA October report noted, despite the declines in recent months, average wholesale prices are still more than 10% above where they were in 2019. Plus, while inventory of new motorcycles at dealerships is recovering, it is still below historical norms. But despite those caveats, the NPA also believes that the trend is now downward.
"After two-plus years of abnormal market strength driven by high demand and inventory shortages, price trends are falling back into seasonal patterns," the report stated. "Expect this to continue through the end of 2022, with additional price corrections likely."
Maybe by the two-year anniversary of the "Where did all the cheap motorcycles go?" story, we'll be able to write one saying "The cheap motorcycles are back!"
