Thursday, July 28, 2011

getting good bikes for cheap

There's a popular theory in stock market investing that holds that all stocks are priced fairly. If a stock is inexpensive, it's because there is a fair bit of risk that offsets the potential upside. If a stock is expensive, it's because it has been deemed, by sophisticated analysts and institutional investors who know more than you do, to be a solid, low-risk investment. Obviously, very few stock market investors, even if they outwardly believe the fair-price theory, put it into practice, since almost every investor is endlessly looking for the bargain that nobody else has discovered.

And this is exactly what happens in the used bike market. Like the stock market, the non-expert stands to get burned, again, and again, and again. A well-regarded name-brand means nothing if one or more of the previous owners was a hack mechanic who screwed everything up (not an uncommon situation). As often as not, the used bike was ridden or abused within an inch of its life. If the buyer gets a good deal, but then needs several hundred dollars in new drivetrain parts and labor, it's very quickly not a good deal anymore. Even more problematic is that framesets often sell for more money (or at least more quickly and easily) than a complete bike. A common situation here is that a customer will bring us a used frameset and a hodgepodge of mixed parts, asking us to make it work. In general, the mix of used parts has to be substantially supplemented by NEW parts from our inventory. Again, it ends up costing a lot of money, and it's still a mostly used, half worn-out bike. The little gremlins that make a bargain-priced used bike more trouble than it's worth are not always obvious, even to the trained eye.

There are success stories in used bike shopping, of course. Every so often, one of our very experienced and knowledgeable customers will find something collectible or cool at Goodwill or at a yard sale for a shockingly low price. Or maybe you have a friend who buys really nice new stuff, uses it minimally, changes his mind, and offers his cast-offs to you for a song. To keep with the stock market analogy, this is kinda like being the janitor at Google who received stock options way back when, and is now a billionaire. Most people do not have friends like this.

The most common way that people get used bikes is by finding them on craigslist or eBay. The problem with these is that hundreds of other people also see the ads. If it is truly a bargain, there are people who make it their business to be ready to buy, at the doorstep, cash in hand, before you've even finished reading the ad, If it's not a deal, then you can pat yourself on the back for having the good fortune that nobody else bought it before you did.

I hate to discourage people from trolling the used bike market, because it keeps us busy this time of year making the used bikes ride-able. On the other hand, I also see that used bike shopping is fraught with risk, unexpected costs, and very, very often, is not the best bang for your buck.


SD_pedalpower said...

I have bought used bikes. The ones to for $20 to trash as a winter bike and the ones I fall in love with the look of the frame and end up spending up to many times more than the purchase price to customize it. Both I know what I am getting into and I am ok with it.

Anonymous said...

Jim, that is true what you say. But used bikes still cost less then new ones.

Jim Thill said...

And a 1990 Crown Vic former police car and taxi cab costs less than a new Toyota. The sensible choice is obvious.

jim_h said...

I do (volunteer) mechanic work on donated bicycles, for a local bike lending program. Many of these bikes are seriously messed up - with incompatible components, incorrect installation, cracked frames, rusted cables, stuck freewheels, cracked rims, dried up bearings, loose and beat-up headsets and so forth. Sometimes it's a lot of work to make things right again. So if you're buying used, be cautious and don't expect a 'steal' or that's exactly what you'll get.

tim said...

You can get great bargains on stolen bikes. Some of those are almost like new.