Quick Question

bighairydel

Hi! This is my first post so go easy on me!

Just a quick question really, bit of background first though. I'm now trying to get myself out of debt around 18k ( I'll get round to doing a full breakdown later- not required for this question right now ) after my spending was getting a bit out of control and although making ends meet, there's no savings and with a wedding coming next year I need to get my act together and get this debt paid off.
Last year at the height of my stupidity a purchased a very expensive (£3300) road bike on an interest free loan. Now in my bid to get out of debt I have put this up for sale. It is completely brand new, never been ridden as the weather has been rubbish. Now here is the problem, the only offers i've had have been well below the asking price - highest £2000 - and although I need the money I dont want to lose £1300 as this doesn't make sense to me.
Finally my question! (sorry)
Do I take the hit and let it go well below asking price which will obviously pay my debts off quicker or do I hold onto it and use this as a learning experience?

Fireflyaway

I don't know anything about bikes but as far as I know, most things with a motor in will depreciate! it now has an additional owner and is older than when you purchased it. Have you checked auto trader ( or a bike equivalent) what similar bikes are priced at? If it's fairy similar then take the hit. The longer you keep it the older it gets and the more the price goes down.

bighairydel

Hi, thanks for the reply!
It!!!8217;s actually a bicycle (sorry didn!!!8217;t make that obvious) and yeah it will depreciate more just the amount I stand to lose at the moment is a lot more than I had hoped!

Number75

I don!!!8217;t think anyone can answer your question, but I!!!8217;ll give you my opinion.

The bike is actually WORTHLESS. Because you don!!!8217;t ride it! You got it last year, and you!!!8217;ve never ridden it. Not even a quick spin in the excitement of new bike ownership! It was a shiny toy. I!!!8217;m going to hazard a guess that you!!!8217;re not that into road cycling. No keen cyclist I know would spent £3300 on a bike over 3 months ago and claim there hadn!!!8217;t been good weather. Be honest with yourself - and I!!!8217;m sorry, I don!!!8217;t mean this to sound as unfriendly and harsh as it may come across! - did you really need to spend £3300, or did you just want the toy? You were already is debt, yet you spent far more than you needed to - and brand new!

I think £2000 for a second hand bike (and that!!!8217;s all it is now) is a great offer.

But I don!!!8217;t think you!!!8217;re losing £3300 and gaining £2000. Instead you!!!8217;re losing something that!!!8217;s worthless (let!!!8217;s face, you!!!8217;re never going to ride it, are you?!) and gaining £2000.

Sell it. It instantly is worth £2000 plus any interest saved plus the boost to your motivation!

I!!!8217;m not against £xxxx bikes. But you need to work out the cost per minute. And what you really need for your hobby. The kind of person that doesn!!!8217;t go out on it, has no need of a £3300 bike!

That!!!8217;s a brilliant chunk to get your debts paid - more than 10%!

DrSpendLittle

I know a bit about bikes as I ride both a MTB and a road bike. My view is that £2000 is probably towards the lower end of a reasonable offer but I don't think you'd get anything higher than £2500. Mainly because you bike will actually be a couple of years old by now if you bought it as a new model last year. The new models tend to come out each spring, thus reducing the price of the previous years model (like new reg cars). If you bought it early last year, before the new models came out, or even in the sale last year, its likely to be 2-3 years 'behind' the new 2018/19 model in terms of spec, geometry, wheels etc etc. Thus, even though its not been ridden, its still going to command a lower price. Plus, most older model bikes can be bought fairly cheaply from the likes of chain reaction or wiggle or even Evans, so you might want to check out the current (sale) retail price and knock a few hundred quid off that price. The longer you leave it, the more it will depreciate. I'm not au fait with current tech on road bikes since I ride a 2016 model, but you may want to look out for new groupset launches that will add even more depreciation (if that isn't a contraction in terms!!) to your 'old' model bike. Good luck, whatever you choose!! DSL

DrSpendLittle

Forgot to add, if you keep it, you MUST NOT getting into the trap of buying all the extra stuff that goes along with being a roadie. Like bidons, new pedals, new cleats, new shoes, new summer kit, new summer gloves, a cooler helmet, a track pump, new tyres, a new saddle, a GPS cycling computer, a turbo trainer and so on and so on. It is an expensive sport and there is always something new to buy. Plus you bike will need servicing and maintaining. I assume its carbon at that price, so you will need a fairly decent annual service and I assume the wheels are deep rim. All very expensive to service and replace parts for.

It's also very easy to convince yourself that spending more money is an investment as it will make you enjoy the bike more and ride it more and thus will be better for you health. Trust me, been there, done that. Spend hundreds on being a roadie and whilst I don't regret any penny, it all went on my CC and I'm probably still paying it all off.

Good luck!!

bighairydel

Thanks for the advice above! I!!!8217;m actually a very keen roadie, this was always going to be a good summer bike ( those into road biking know about this phenomenon ) I would doing plenty of miles on it and also have more than enough of all the paraphernalia that goes with it. Hence why I!!!8217;m in debt in the first place.
This is my dream bike and when my debts are gone I!!!8217;d be looking to save up and buy it or similar then outright without loans ( you know, when I can actually afford it for once! )

DrSpendLittle

Hmmm, that's a tough one then as I can feel the pain of having to sell your dream bike, especially as its coming up to roadie season!!!

If you've everything roadie-related already and assuming it's not going to cost you all that much to maintain, and if the loan is 0% (which most tend to be) and if you're willing to cut back in other areas of your life to pay back your other debt, then I'd be tempted to advise you to keep it since its your dream bike and you'd be selling it at a loss anyway.

However, and this is a big however.... Dave Ramsey (search on youtube if you don't know him) would have you sell it straight away, and he would scream at me for suggesting you keep it. But, I haven't sold my bikes to pay back me debt, I've cut out other things in my life to protect them, and I've managed to make some decent inroads into paying mine off. I look at my bikes and 'see' something positive as coming from the debt, if that makes sense. You can too, if you keep it and cut back in other areas. Keep it if you know you can change your money behaviour from this day forward.

fatbelly

If you have as a 'rule of thumb' that any vehicle will depreciate 30% per year you won't go far wrong.

bighairydel

It was actually Dave's book which has spurred me into this. I had three bikes that I put up for sale ( other two not using as much and old ) and have sold one already.
I'm now basically working all the overtime I can get and was looking at getting some form of other income as well as i've pretty much sold all my other stuff that's worth anything and i'm not using.
I do all my own maintenance anyways so wouldn't be huge costs involved there.
I've already changed my money behaviours drastically. Its quite refreshing and i'm actually enjoying the process. (aparts from potentially selling my dream bike that is)

theoretica

If you had the £2000 and someone offered to sell you this bike for that, do you think you would go for it? It is easy to be emotionally affected by the history and what you paid for something, but all that really matters is what the best thing to do now is. Is the price of the bike so low that you will need to pay far more for a similar second hand one later, and is the difference in price more than you would pay in interest on your debts?