NADA vs. KBB

[bayoubengal]

As much as I'd love a new RT I am just too nervous about the economy to spend 20 grand on a new bike right now. So I've been scouting for a used RT. I have noticed about a 20% difference in the retail value between NADA and Kelly Blue Book retail. I've also noticed many dealers seem to have lost reality about the value of used bikes as compared to what is available out on the open market. I don't have any problem buying from a dealer or a private individual. I'm not trying to steal a bike but in these economic times I'm not likley to pay full retail either. Any recommendations on fair market value determinations? I just don't want to buy a used bike and be immediately upside down in it. I haven't found a source for wholesale or loan values either. NADA prints a trade in value, but that is just a manufactured number, not based on the actual cash value (ACV) of the unit traded. Typically when a unit is traded at a dealer that appraisor assigns an ACV to the bike being traded. The difference in ACV and what is negotiated for (and listed on the buyers order) is called the over-allowance, and is ultimaely deducted from the gross profit on the bike. So I pay no attention to that number. I'm interested in a used RT so this is the numbers I came up with for an '05:

 

 

Kelly BB $14240.00 Retail

NADA $11062.00 Average Retail

$8485.00 Low Retail

Even if I selected saddle bags, full fairing, cruise contreol etc the NADA never went over $12000.00.

 

 

So here are my real questions:

 

Why the huge difference in NADA and KBB and which is more accurate? (Guess that depends on if you are a buyer or a seller!

How do I determine the fair market retail value of a bike?

How do I find the fair market wholesale value of a bike?

How do I find a seller that has reasonable expectations?

How do negotiate with a seller that thinks his farkles are worth retail what he paid for them 4 years ago?

 

I made a near full NADA retail offer on a bike last week and the owner was polite but I could tell he felt I was trying to lowball him.

 

Any advice is appreciated.

 

 

[swfraley]

[bobbybob]

So here are my real questions:

Why the huge difference in NADA and KBB and which is more accurate? (Guess that depends on if you are a buyer or a seller!

How do I determine the fair market retail value of a bike?

How do I find the fair market wholesale value of a bike?

How do I find a seller that has reasonable expectations?

How do negotiate with a seller that thinks his farkles are worth retail what he paid for them 4 years ago?

 

 

Its very simple. If you're a buyer, use the NADA value as a starting point. If you're a seller, use the KBB value as a starting point. You will probably meet somewhere in between.

 

Farkles: take 50% of the new value of the farkles and add that much to your unfarkled offer. If you don't want the farkles, offer to buy it with farkles removed for the unfarkled value so the seller can sell them on Ebay (or here!).

 

Dealers: those unrealistic sell prices for used machines are there because there are actually some folks who will walk in off the street and pay that. Make a reasonable offer to buy used based on the NADA value, even if it's several thousand less than asking price. This will give you a good feel for his pain threshold. If you're waiting on a dealer to list a bike at a "fair & reasonable" price you'll have a long wait--nagonnahappen. Used machines are more profitable to dealers than new ones because they usually take them in on trade and offer very little on the trade-in. They have MUCH more room to deviate on a used bike than on a new one. Be firm--don't try to be friends. Times are tough. It's a buyers market.

 

 

Edit: and excellent advice below from Polo too!

 

Have you looked here? There's an 05 RT w/21K miles for $12,100. Not TOO far away either.

http://www.ibmwr.org/market/

[Polo]

So here are my real questions:

 

Why the huge difference in NADA and KBB and which is more accurate? (Guess that depends on if you are a buyer or a seller!

How do I determine the fair market retail value of a bike?

How do I find the fair market wholesale value of a bike?

How do I find a seller that has reasonable expectations?

How do negotiate with a seller that thinks his farkles are worth retail what he paid for them 4 years ago?

 

Any advice is appreciated.

 

 

I believe I can muddy up the water a bit.

 

The truth is that there's no correlation between KBB and NADA. Pretty much if you're west of the Pecos, KBB is used, here in Texas NADA prevails. Many times, when selling a used car, I used KBB to "show" that we were pricing it below trade-in. Some other times, when I was low-balling their trade, I would use NADA. Often times, when I couldn't get the bank to lend me enough, I would use KBB as basis for the loan amount for some banks based on the west coast.

 

Truth be told it's just good ol' horse trading. At the end of the day it's just what the market will bear.

 

The seller will most often feel that their bike's worth includes the elbow sweat and love and memeories accumulated on it. I would have bought an '04 1150 with 36K miles on it for $9,500, but he wanted $10,500, NADA said it was worth $8,300 trade-in; I didn't have the heart to make an offer - he ended up selling it for $9,500. I ended up buying another '04 with 6,700 miles for $9,250, NADA does not take mileage in consideration when it comes to bikes.

 

Approach the seller with the book on hand, and leave emotion out the door; show him that there's no place to include farkles on teh book's (both) appraisal. Even if you're not financing, ask your bank to pretend that they are, so you'll have a third party limiting you, my bank would lend me a max of 125% of trade, so after TT&L, all I had available was $10,375 with which to buy the bike, jacket, boots, valve cover protectors and TT&L. That'll give the transaction a sense of connection with reality, since we all tend to see banks as authority figures and you can allways make reference to their actuarial basis. Of course a dealer will ignore this and focus on you making up the difference beyond the bank's number, that's when you sit down quiet and don't blink.

 

Good luck.

[bendbill]

Last 2-3 times I've checked over the last 2 years, NADA was aligned with Motorcycle Consumer News prices, at least for beemers, Hondas and some of the other Japanese makers, leaving KBB all by its lofty self

[BeemerLover]

If I remember correctly the KBB site says that this is the average price that a dealer would offer. NADA is the average price paid by the purchaser. Bottom line, Polo is right, the final price will be what the market will bear. With economic conditions as they are I suspect you should negotiate hard.

 

I have bought a number of bikes used, most often from the listings on the BMW MOA site and Cycle trader. I found that there are "players" and then there are those who really do want to sell. "Players" often like the drama of selling the bike and may or may not really want to sell. They often price near the top and won't come off much. One way to reveal a player is to ask the reason why they are selling. My dad told me that, to get a good deal on anything, watch for the "3 D's"; death, debt and divorce. It has worked for me.

 

Also, watch for those who do not have the title in hand. If you must pay off their loan before you get the bike or take title, watch out! I almost had to sue a guy in a deal like that.

 

Buying from a dealer almost assures he has gone over the bike and will at least morally warrant the bike. Or he might actually give you a 30 day one. Buying from an individual is less sure... you don't know for sure if the bike has been maintained properly or abused. I always heve the seller take it by a BMW dealer and I pay to have their 60-70 point inspection done. The results are sent only to me. It costs me an hour of labor but it saved me once when there was a leak between the engine and the tranny.

 

Good luck

 

 

 

 

 

[tallman]

We use NADA as actual guide for trade-ins.

Of course there are exceptions, but it is more accurate than KBB for our area.

The bikes that are traded in are then sold for the same amount that the buyer received in trade allowance.

That's the way we do it.

YMMV.

[bayoubengal]

Thanks for the inputs guys.

 

Before I write off that new '09 RT, what is typical as to what I can expect to pay for a new one? How much of a discout off of published retail? 5, 10, 15, 20%?

 

When I bought my new LT in '03 I had been looking and watching the market for about a year. I basically couldn't get them to discount the bike at all. Apparently inventory stacked up so things changed. I got a $2000.00 discount, plus a $2000.00 rebate, PLUS 0.9% (yes zero point nine) for 60 months thru BMW FS. $4000.00 off retail plus the financing incentives. Most companies offer the rebate OR the low rate, but not both. But they did.

[Paul Mihalka]

Thanks for the inputs guys.

 

Before I write off that new '09 RT, what is typical as to what I can expect to pay for a new one? How much of a discout off of published retail? 5, 10, 15, 20%?

 

When I bought my new LT in '03 I had been looking and watching the market for about a year. I basically couldn't get them to discount the bike at all. Apparently inventory stacked up so things changed. I got a $2000.00 discount, plus a $2000.00 rebate, PLUS 0.9% (yes zero point nine) for 60 months thru BMW FS. $4000.00 off retail plus the financing incentives. Most companies offer the rebate OR the low rate, but not both. But they did.

 

You won't find any BMW incentives on a '09 R1200RT. The BMWNA invoice to the dealer is 13% off MSRP. That is it.

[bayoubengal]

Thanks for the inputs guys.

 

Before I write off that new '09 RT, what is typical as to what I can expect to pay for a new one? How much of a discout off of published retail? 5, 10, 15, 20%?

 

When I bought my new LT in '03 I had been looking and watching the market for about a year. I basically couldn't get them to discount the bike at all. Apparently inventory stacked up so things changed. I got a $2000.00 discount, plus a $2000.00 rebate, PLUS 0.9% (yes zero point nine) for 60 months thru BMW FS. $4000.00 off retail plus the financing incentives. Most companies offer the rebate OR the low rate, but not both. But they did.

 

You won't find any BMW incentives on a '09 R1200RT. The BMWNA invoice to the dealer is 13% off MSRP. That is it.

 

Thanks Paul. So for example a $20K RT has an invoice of approx $17400, or a $2600 gross profit assuming no discount. That's also assuming no "back end" money as most car dealers recieve. I don't want to beat up my dealer. So what is a fair and reasonable gross? I believe in supporting my dealer because I want him to be there when I go back for service. But on the flip side I work in an industry (airline) where a customer will book another carrier for $1 less on the fare... So my income gets squeezed by consumers, thus I have a limit as to how far I can go. I don't think profit is a four letter word, and I understand the dealer is in the retail business and he is in it to make a living. Just looking for the fair and equitable...

[Penforhire]

I'd look for a left-over '08 to try for a discount. I've never gotten less than 10% off list price on new BMW's, closer to 15% (including accessories), but I never bought the new-hotness.

 

On KBB vs NADA (or MCN's guides!), I haven't had any luck getting prices to align with the bikes or cars I sell or trade. For that imaginary used '05 you're thinking about, I'd probably have to pay midway between your high and low.

[SWB]

As much as I'd love a new RT I am just too nervous about the economy to spend 20 grand on a new bike right now. So I've been scouting for a used RT. I have noticed about a 20% difference in the retail value between NADA and Kelly Blue Book retail. I've also noticed many dealers seem to have lost reality about the value of used bikes as compared to what is available out on the open market. I don't have any problem buying from a dealer or a private individual. I'm not trying to steal a bike but in these economic times I'm not likley to pay full retail either. Any recommendations on fair market value determinations? I just don't want to buy a used bike and be immediately upside down in it. I haven't found a source for wholesale or loan values either. NADA prints a trade in value, but that is just a manufactured number, not based on the actual cash value (ACV) of the unit traded. Typically when a unit is traded at a dealer that appraisor assigns an ACV to the bike being traded. The difference in ACV and what is negotiated for (and listed on the buyers order) is called the over-allowance, and is ultimaely deducted from the gross profit on the bike. So I pay no attention to that number. I'm interested in a used RT so this is the numbers I came up with for an '05:

 

 

Kelly BB $14240.00 Retail

NADA $11062.00 Average Retail

$8485.00 Low Retail

Even if I selected saddle bags, full fairing, cruise contreol etc the NADA never went over $12000.00.

 

 

So here are my real questions:

 

Why the huge difference in NADA and KBB and which is more accurate? (Guess that depends on if you are a buyer or a seller!

How do I determine the fair market retail value of a bike?

How do I find the fair market wholesale value of a bike?

How do I find a seller that has reasonable expectations?

How do negotiate with a seller that thinks his farkles are worth retail what he paid for them 4 years ago?

 

I made a near full NADA retail offer on a bike last week and the owner was polite but I could tell he felt I was trying to lowball him.

 

Any advice is appreciated.

 

 

I looked on and off for about six months for an RT1200RT. I didn't expect to be able to "buy" for about 2-3 years (still got to get 2 kids through college, and now one just decided that Law school would be an ideal way to spend the next 3-4 more years ). I had patrolled Cycle Trader, Ebay, IBMWR Marketplace, and BMWST. Occasionally, one of these advertisements would take me to a dealer site with an attractive deal, but alas, still out of my price range. I kept shopping.

 

Yeah, in the eyes of many owners and dealers, I'm just a useless slimy sort of buyer that just wants to "steal" a bike. However, testing the market is the only way to really KNOW the market. NADA and KBB mean nothing, particularly in this economy, because they look backwards not forwards.

 

And the truth is, I'm going to have to take a bath on my RT-P when I get serious about selling it (rebuilt mechanically, $9K into it, and will likely sell for less than half). Moreover, if I have to re-sell that R1200RT I purchase, I'm going to lose 10% immediately to the State of California, plus an average of 20% on the sale of the bike in most cases - much more, of course, if I purchase new. Bottom line: I need to purchase my ride in the real market, not the market of owners who wish the depreciation was less, who "just know" that the "intrinsic value" of their pride and joy is high, but who haven't tried to buy one lately. Or, based on the "gut feeling" of dealers who are struggling surviving in declining markets in a near-crashed economy (it's REAL tough out there folks). I wouldn't take bread off another man's table, but I don't have the right to give him mine and starve my family either.

 

So, no guilty feelings here folks.

 

I eventually found a higher mileage 2005 R1200RT in Orange County on Craig's list for $8000.00 last October. It came with most of the bells and whistles (ESA, BC, Sargent's seats, tank bag, etc.). The gentleman obviously did not want to sell it, but had to. I met his asking price and very much appreciated the sale. I almost rejected the ad out of hand, because this gentleman had contracted with a Nevada third party notorious for dissatisfied clients - I thought it was a scam. However, I went ahead and made the call, had the guy's phone number in 5 minutes, found out it was available, and immediately changed my plans for the next 24 hours. From one perspective, I just lucked into a pretty nice deal. From my perspective, I worked to find that deal, was blessed in my task by the Lord, and took a risk on a bike that could cost me some money down the road. (However, it turned out to have a sterling service history, and looks and runs like new.)

 

It was also no accident that I purchased it when I did, actually, I bought it "early". I have noticed that the best deals seem to pop up from November through February. After that, anyone who needs to sell a $10K to $20K bike can wait a month or so until the spring market heats up with more bike buyers. (That's why I'm hanging on to the RT-P - I'd probably do better scraping it for parts than selling it right now. March - May, there should be more folks looking.)

 

So, to answer your ultimate question about how to determine the market (retail, wholesale, etc.), the answer is spend some time doing specific market research. Create a spreadsheet, and systematically track ads, dates placed, asking price, and the amount of interest those ads generate. How do you track the latter. Not too hard. You see a bike forsale on cycle trader for 30 days, make a call and see if it's still available. If so, he didn't get is price. If the market's hot, call in 15 days. You can ask what it sold for and many owners won't mind telling you. Look at Ebay for "completed ads" (ebay maintains 60 days of history - or used to). Ebay reduces merchandise to a commodity. (If I sell on Ebay, I'll probably get less there than anyplace else, but also have the most certainty of getting it sold quickly. The market doesn't lie.) How many RT's were listed? How many listings expired without being sold? How much bidding activity did the bikes listed generate. Ebay is a fount of marketing info for a buyer or seller, but just remember that ebay is the home of low-ball offers.

 

You can do the same sort of research on Craigslist, but it's tougher, because CL is by design "local". You technically need to log into each locality and search for your bike. However, you can search google for "R1200RT craigslist". You'll get expired listings and listings in a whole lot of places you wouldn't want to buy a bike from. (I.E. I'm reticent to buy what I haven't put my hands on, and nearly as scared to take a cashiers check, cash, or other formerly trustworthy instruments. And, be careful: That "steal" of a bike might have originally been purchased in Louisiana about say, 2005, i.e. a "beautiful, extremely low mileage" Katrina special. KNOW the history of that bike! ). However, again, we're looking for market information, and even expired CL ads tell us something.

 

As you can see, there are multiple sources you can use to identify the status of the "real" market out there. It sounds like it takes a God-awful amount of work, and while it is time consuming, an organized, methodical, persistent search will result in an information base that gives you a good "pulse" on the market pretty quickly. For the past several years, that "pulse" told me that my used R1200RT was coming to my garage in about 2010 to 2012 (maybe graduation date for a couple of kids too! ) Then the market changed, and I knew enough about the market to move quickly.

 

No, I'm not interested in paying $25K for a new Beemer that will be worth $8K 36 months later. I simply cannot pay $12K for a bike that would return perhaps $9K back if I had to sell it in a couple of months (God forbid, because I've been there, done that, in earlier recessions.)

 

One more thing: I never, ever "low ball" an owner on price. If he asks $13K for his 2005 R1200RT with $3K in farkles, and only 4K miles, I wouldn't dare insult him by trying to tell him that he might be overvaluing it a bit. Maybe it's a great value to someone else, and he'll get his price.

 

No, don't accept KBB, NADA, rumors, or what someone (or most owners) wants for their bike. Market's don't lie (which is why I know that I'm going to have to give away MY used bike - ouch! ).

 

Good luck on your search. Have patience, do your homework, and if the current US government wastes about $900BN on a pork-loaded "stimulus package", passes protectionist and GM-like-pro-labor legislation, and generally craters the economy, my "new" 2005 RT will be available for a song pretty soon too.

 

Fair deals are out there. My co-worker just bought a loaded 2007 K1200GT with 6K miles last Friday for $13K, after a local dealer worked hard to sell him a nearly identical 2007 with 25K miles for something like $15K or $16K. It was a lease-repo-auction, which he bought from a private dealer. He's happy, the private dealer is happy, and we're genuinely sorry for the guy who drove it off the lot at full-lease price two years ago, who ran into misfortune. (Yes, I helped my buddy just a little with some market research.)

 

- Scott

[tallman]

Thanks for the inputs guys.

 

Before I write off that new '09 RT, what is typical as to what I can expect to pay for a new one? How much of a discout off of published retail? 5, 10, 15, 20%?

 

When I bought my new LT in '03 I had been looking and watching the market for about a year. I basically couldn't get them to discount the bike at all. Apparently inventory stacked up so things changed. I got a $2000.00 discount, plus a $2000.00 rebate, PLUS 0.9% (yes zero point nine) for 60 months thru BMW FS. $4000.00 off retail plus the financing incentives. Most companies offer the rebate OR the low rate, but not both. But they did.

 

You won't find any BMW incentives on a '09 R1200RT. The BMWNA invoice to the dealer is 13% off MSRP. That is it.

 

Thanks Paul. So for example a $20K RT has an invoice of approx $17400, or a $2600 gross profit assuming no discount. That's also assuming no "back end" money as most car dealers recieve. I don't want to beat up my dealer. So what is a fair and reasonable gross? I believe in supporting my dealer because I want him to be there when I go back for service. But on the flip side I work in an industry (airline) where a customer will book another carrier for $1 less on the fare... So my income gets squeezed by consumers, thus I have a limit as to how far I can go. I don't think profit is a four letter word, and I understand the dealer is in the retail business and he is in it to make a living. Just looking for the fair and equitable...

 

Do not forget the dealership has to unload, store, uncrate, assemble, PDI, fuel, test ride, all before trying to put the bike on the floor.

Some dealerships sell below MSRP, some don't.

I know of one not far from Louisiana that sells below MSRP.

Best wishes.

[SWB]

Do not forget the dealership has to unload, store, uncrate, assemble, PDI, fuel, test ride, all before trying to put the bike on the floor.

Some dealerships sell below MSRP, some don't.

I know of one not far from Louisiana that sells below MSRP.

Best wishes.

 

And add taxes, labor, and other overhead. I seriously wonder how dealers can make a profit at times. Unless a business can net at least 10% or more, they may as well put their money into gold or bonds.

[bobbybob]

And add taxes, labor, and other overhead. I seriously wonder how dealers can make a profit at times. Unless a business can net at least 10% or more, they may as well put their money into gold or bonds.

 

It's called, service work. You know, that little process of taking your bike in for interval services and then crying and moaning on the forum about how the rates are so unfair and "I didn't think it would cost THAT much" etc. Selling bikes is simply the 1st step in the "process".

 

 

 

[codougd]

And add taxes, labor, and other overhead. I seriously wonder how dealers can make a profit at times. Unless a business can net at least 10% or more, they may as well put their money into gold or bonds.

 

It's called, service work. You know, that little process of taking your bike in for interval services and then crying and moaning on the forum about how the rates are so unfair and "I didn't think it would cost THAT much" etc. Selling bikes is simply the 1st step in the "process".

 

 

Based on what I pay for service, they are doing OK.

 

I don't know how motorcycle dealers work, but car dealers borrow the money to buy their inventory. So, if you buy a new car at dealer cost, say $20,000, and that dealer gets a 3% holdback, they are making 3% of the vehicle cost directly back from the manufacturer. Assume that they are paying 5% interest on the money. Assuming the car sits on the lot for a month, the interest on $20,000 is about $83. So, if they sell the vehicle at cost, they just made $600 (3% of $20,000) on an $83 investment. Now, of course, this does not cover their overhead and I have no idea what that might be on a per vehicle basis. However, do not listen to their sad tales about how little money they are making.

 

For the past 20 years or so I've paid cash for my vehicles and have never paid above dealer cost. When I bought my 2007 R12RT (new), it listed for almost $20k. I paid $18k.

[cali_beemer]

I think both nada and KBB have some accurate and some flawed stuff behind it. I also have found location demographics to play a role in price. I live in Claifornia and it always seems that bikes in other states, especially ones where they get snow all winter, have lower prices. I ususlaly find KBB more accurate of what to expect. However, that being said, my 05 RT, books for over 14k on KBB but I paid 10,500 for it. On another note, when selling my suzki madura Nada booked it out for 700 but KBB booked it for 2200 and I ended up selling it a few days for 2k. KBB has always been mroe accurate to what I have sold my bikes for private party. Anytime I sell and someone gives me a Nada price, I tell them, "good, go find one for that price" becasue its usally always lower than reality. The best thing to do is to look at the craigslist ads and see whos selling what for what. Dont be afraid to email someone and see what they actually sold the bike for.

[Boone60]

Check the completed BMW motorcycle auction page out on e-bay. This shows how much buyers are willing to spend for a specific bike.

 

Below is a couple of examples found on e-bay.

 

BMW : R-Series R 1200RT

2005

Sell one like this 2005 19,500 1 BidSold $10,500.00 Jan-22 09:06

 

BMW : R-Series R1200RT

2006 BMW R1200RT(Reserve not met)

Sell one like this 2006 8,076 13 Bids $11,901.00 Jan-21 12:07

[rglassma]

I've read all the responses to your question in this forum and some are very interesting. But, the fact of the matter is, there is NO hard and fast rule pretaining to how to do what you have asked.

 

You have a buyer and a seller. The desire to purchase a particular bike has to match the desire to sell that particular bike no matter whether it is a dealer or a private party. For the most part, it will usually be easier to get a better price from a private seller then a dealer because a dealer has a PROFIT motive. Private sellers are looking to liquidate to reuse the funds for a different purpose.

 

Both KBB and NADA are basically guides. That is it... They are usually more relevent for when bikes are in demand. There are many factors that affect whether or not they will be accurate gauges as to the actual value.

 

Buying a motorcycle is usually a time consuming process. You need to identify the max. you can spend on a model that you want. Then, keep looking until the circumstances meet your criteria.

 

If you can find it, great. If not, you need to readdress your expectations. There will always be a better deal and always be a worse deal.

 

Just that simple.