With all the new motorcycles for the 2017 model year debuting right now, it might seem counter-intuitive that this would be the right time to make a trip down to your local motorcycle dealership, but it is. Let me explain.
After seeing a modest rebounding of sales and momentum from the recession, this year has been a stumbling block for the motorcycle industry, with sales at the beginning of the year building slowly, before tapering off later in the summer and early fall.
Economic indicators are up, unemployment is down, but the third quarter results from around the industry are pointing to the US motorcycle market taking a market contraction for 2016. The reason for this is uncertainty.
If you talk to enough people in sales, slowdowns in motorcycle sales around election time are not uncommon, with buyers responding to a change in government by holding back on making large purchases.
Election years at the end of double term of service, or where a new party seems likely to takeover, seem to slow down sales even more so. Mid-term elections less so, which is sort of intuitive, as the uncertainty in those elections is rather stark.
So with the 2016 US election seeing the end of the Obama administration, the possibility of a change in the governing party, and all the turbulence that comes with Donald Trump, it shouldn’t surprise us to see that US motorcycle sales are on the decline.
Essentially, American motorcycle buyers, as with all consumers, are holding their breath to see what happens on November 8th.
What this means for your local motorcycle dealership though is that 2016 bikes are languishing on the showroom floor.
With early 2017 models already starting to show up, and more news models about to debut, dealers will be feeling the pressure to move bikes from this model year.
This means dealerships will be more inclined to make a deal on a new motorcycle sale, with invoice pricing for consumers certainly not off the bargaining table.
The other element here too though is financing.
Interest rates from the Federal Reserve (the rate at which banks are loaned money) have been slotted for an increase in 2016, though The Fed has indicated that it will wait until after the election to make that rate increase, again because of the uncertainty the election creates in the economy.
This means institutional money will become more expensive in December as well, which for consumers means that financing offers right now on new vehicles are the best they are going to be for a long time, considering that they currently are at record lows.
With the American motorcycle market dependent on financing the purchase for consumers, this upcoming rate increase will only make getting sales more difficult for OEMs, which will add further motivation on the side of dealerships to make a sale before the end of the year.
With dealers feeling the pressure to clear out their 2016 inventory, and financing options the best they’re going to be (until the next heavy economic recession), the end of this year is seeing a perfect storm for motorcycle buyers.
If you’re not obsessed with getting the latest and greatest motorcycle, or the bike you’ve had your eye on isn’t expected to receive an update for 2017, then there probably isn’t going to be a better time to buy in the next four to six weeks.