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17th January 2003

Don't believe anyone who tells you to stash your cash in a classic bike. Rowena Hoseason has her doubts about investment bankers...

It's not that Rowena is small, just that the BSA has a seat height of 54 inches...Backfired!

The worldwide stock markets may still be shuddering from the that moment when the hi-tech bubble burst but -- don't worry -- there are still plenty of people prepared to give you bad advice about what to do with your money. Perhaps you didn't lose enough on internet stocks? Great -- we've got a surefire way to devalue your savings. Invest them in old motorcycles!

Yup, that old chestnut has been spotted again, alive and well and galloping around the classic bike press. Drives me mad. Why? Well, let's seriously consider the subject...

The old bike which everyone uses as an example of 'how to make money from motorcycles' is the Brough Superior. Righto; fine. As it happens there's some family history here; Hoseason family history. My grandfather owned, rode and crashed a Brough Sup. Must run in the family (not that I've pranged anything as prestigious as a BS). If Grandpappy had been a touch more careful with his Brough, then perhaps my father could have inherited it, and maybe now I would be its third-generation owner. That's a rather splendid scenario, don't you think? Shame about the dry-stone wall...

But in the comfort of my imaginary world I'm now be owner of an SS100, one of the rarer Matchless-engined machines. It cost 175 in 1939 (Grandpappy was obviously not short of a penny or two dozen). An absolutely mint example of one of these bikes sold at Bonhams in April 2002 for 42,000 (including premiums and VAT and probably window tax too). Cor: so 175 turned into 42,000 in only 63 years. What an investment, eh?

If I were a genius at calculating compound interest and adjusting for inflation, then I could probably demonstrate exactly how awful an investment return that represents. But I'm not, and you'd lose the will to live along the way. I can give you a human illustration however; if my Dad had indeed inherited the Brough then maybe -- by some weird freak of finance -- it was worth 500 in 1963. At the same time as wheeling the BruffSup into the shed, dear old Dad also purchased a new family home -- a four bedroom semi in the suburbs of London. Cost? 500 on the nose. Value of BruffSup today? 42,000. Value of four bedroom semi today? 425,000. Show me the better investment, if you can.

And so far I have only touched upon the rottenness of the 'motorcycles make money' theme. Remember that in order for your 60 year old machine to fetch top dollar at auction then it must be in genuine concours condition. Not a half-hearted mend-and-make-do state, but utterly immaculate and original as sin. Someone will have had to love and cherish and polish and replace and restore and rebuild and remanufacture and look after the dratted thing. Ideally, it should be kept in a dry, heated environment, with a minion at hand to clean it once a week. The cost of all that makes the annual charges of most financial service providers look almost reasonable. Oh, and speaking of charges, don't forget that the vendor of the machine sold last year did not receive 42k. Oh no. He got about 36,500 after fees were paid.

Oh, and of course, if you ride your precious investment then you run the risk of doing exactly what Grandpappy did with my mythical inheritance -- wups, I've just written off the family assets, darling. Oh well, I always fancied giving socialism a try...

Perhaps the situation looks a little different over a shorter term? Most investments carry an optimum term of a decade, after all. So let's see: a Jap-engined SS100 sold in 1989 for 50,000, and in 1990 a Matchless-motored SS100 was valued at 55,000. Remember what they're worth now; about 36,500 to the owner. So in twelve-odd years the things have devalued by 35%! Even my Marks and Spencer shares have performed better than that. But could it be that I've chosen a particular model to illustrate my theme? Well a 'cheap' SS80 was valued at 9000 in 1990, and at Bonhams in April an SS80 failed to sell for its reserve of 10k. That is not what I would describe as 'growth.'

There might be the odd bike which does appreciate in monetary value over time, I'll concede that. But isn't this all missing the point? Motorcycles aren't commodities, made to be hoarded and traded. They are made to be ridden. Don't buy a bike of any age expecting to make money on it. Buy a bike as a different sort of investment. Invest in the times you spend together and the memories you accumulate. Motorcycles can make you rich -- of course they can. But you can't spend those riches: they stay with you for all time.


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