Do Aftermarket Parts Add Value to a Motorcycle?
It's been said that "The cost of a new motorcycle is only a deposit on the aftermarket parts". A lot of motorcycle owners begin personalizing their new rides at the dealership, before they ever take them home. Customizing their rides can get very expensive and for some motorcycle enthusiasts, despite the cost, it becomes a joyful obsession.
According to Brandon Gaille, host of one of the most downloaded marketing podcasts in the world, "4 in 5 motorcycle owners say they are willing to invest into add-ons, such as a windshield, a saddlebag, or a luggage carrier to enhance their riding experience". And according to the AMA (American Motorcyclist Association) which has over 235,000 members and has been around for 75+ years, "The average member age of a motorcycle owner is 48 and they’ve been riding a motorcycle for more than 25 years". Mr. Gaille also points out that "three out of every four dollars in disposable income that is available in the US for purchasing motorcycles is owned by the 50+ age demographic".
That means Baby Boomers are the majority of the ones riding motorcycles and have the most available disposable income. According to research, in the United States the average household income of a motorcycle owner is above $85,000, about $30,000 higher than the average household income.
Since only 5% of the Boomers who own motorcycles are women, it's the men that are making most of the purchases, but it doesn't stop there. This demographic is also responsible for the lion's share of the aftermarket parts industry's success.
Google released a report in 2015 that motorcycle parts and accessory searches by mobile devices had increased 45%, and even with a 7% drop in desktop searches, total motorcycle parts and accessory searches in 2015 had increased 16%. Smartphone technology has made buying aftermarket motorcycle parts even easier.
Gaille's marketing analysis yielded more predictions-"As motorcycle owners age, they become more likely to spend money on accessories for their bike instead of wanting to purchase a new one. Being innovative in the accessories market can help to push sagging sales that are seen in specific niches, especially with the touring bikes."
What we're seeing is a boom in aftermarket motorcycle parts and accessories sales. A simple Google search will yield hundreds of online stores offering all the popular aftermarket parts at discounted prices. A bike that may cost $12,000 new, could have well over $4,000 dollars in aftermarket parts, making the total investment $16,000. But what if any, is the return on these modifications?
Two popular pricing guides, Kelley Blue Book (KBB) and National Automobile Dealers Association (NADA), both have categories for motorcycle values including OEM (Original Equipment Manufacturer) factory installed upgrades and accessories. NADA even has a disclaimer that reads " Due to custom features such as chrome, paint, engine modifications, and market conditions, some values may increase by as much as 10%-30%."
So what about non-OEM aftermarket accessories, do they increase a motorcycle's value and should they also be figured into the equation?
Up until now, buyers rely on book values put out by the likes of KBB and NADA, and these companies do not have the expertise to estimate aftermarket parts values. OEM factory upgrades are simple to price because they're listed by the manufacturer at the time of sale. All KBB and Nada do is depreciate a motorcycle's value based on age, condition, and mileage. They do not factor in for things like EFI controllers ($450), free-flowing exhausts ($700), performance intakes ($300), and custom wheels ($1,500). There's also custom grips, pegs, mirrors, saddlebags, chrome and powder coated parts and hardware, heated grips, the list of potential aftermarket parts is endless. The aftermarket industry is alive and doing very well indeed!
Most motorcycle insurers use book values to determine replacement cost. Harley-Davidson, who sold 161,658 motorcycles in the U.S. in 2016 and another 100,000 overseas, and is also one of the world's leaders in accessories, includes "$3,000 Accessory Coverage" in their motorcycle insurance policies. Their thinking is "make it insurable and they will buy it"-
GEICO Motorcycle includes "some level of coverage for customized parts or equipment under Physical Damage Coverage for no additional premium". They also offer an option to increase the amount of coverage for custom parts at an additional premium. Custom paint that is completed after the initial build, can also be added to a policy, but is limited to $500 in most states.
With all the aftermarket parts being bolted on, why are potential buyers so unwilling to consider their value? And why hasn't anyone put out a price book that includes aftermarket parts and custom motorcycles? Certainly those in the motorcycle industry could do it and a price book that included non-OEM accessories would further help aftermarket parts sales as a result of the added resale value.
At least for now, a dealer may attempt to minimize any upgrades done to a used motorcycle during trade negotiations, only to advertise and resell the bike and it's upgrades a day later at a much higher price than the trade allowance, cashing in on the accessories. Buyers seem willing to overpay a dealer on a used bike with aftermarket accessories, but tend to negotiate using book value during a private sale.
I believe a customized motorcycle does have considerably more value than one that is completely stock and that aftermarket parts, OEM or otherwise, should be figured into the selling price.
Of course there are motorcycle owners who wouldn't spend seventy-five cents for air if they had two flat tires...