You might recall I have placed an ad for selling my bike here and elsewhere. Post placing the ad, I have been getting a few requests on the sale and some offers too. I had to reject some of the offers since they were too low.

It made think how I should be pricing my bike and maybe I should have a model with simplistic parameters to price the bike. Of course, the sale will depend on the demand, vintage and condition of the bike. But I suppose these should generally sway the price around some mean and I should have a model to compute the mean.

The model I use is fairly straightforward with simple assumptions:

1. The cost of a bike drops by a factor the moment you ride it out of the shop. I think a 20% drop is a sensible start. It may look steep but then If one can get a brand new bike with warranty from a shop with installment payments, there is very little reason to get a used bike at more than 80% of cost price. Well, it is debatable and I am comfortable with the figure.
2. A Bike, being a mechanical beast, does not completely lose all its value regardless of age. We can still see ‘vintage’ bikes from 60’s and 70’s on sale. Unless totaled, bikes are usually usable with minor repairs. Even if totaled, some bikes can still fetch scrap value or one may salvage components and make some money.
3. I figured a simple depreciation model with an annualized depreciation rate would work fine by not allowing the price to get to 0. The question would then be what rate should be applied. I plotted a few curves at different rates and I think I would settle between 8% to 10%. I suppose the seller would want as low a rate as possible and the buyer would prefer as high as possible. Well, there is no satisfying everyone and I suppose trade can happen only when both parties agree on a reasonable figure to work with.

Given a new bike costs about 2500 and It is about 3years old, I figure a sale price of 1400-1600 to be fair price. I am not even considering some of the upgrades. Well I have to be a reasonable seller too.

Such is the state of cyclist in the US of A. Of course, to begin with, American drivers are known to be highly intolerant of cyclists and the situation does not surprise me.

I suppose it shows that cyclist’s right to the road is contested everywhere and unless active measures are taken to educate the drivers, no amount of infrastructure or legal statutes can keep the cyclist completely safe on the road.

In all honesty, apart from a couple of close brushes, traffic in Singapore is tolerant of cyclists as long as the cyclist behaves in a predictable way.

ref (EcoVelo)