Bike boom - is it over?

[ChrisF]

1 minute ago, _David_ said:

He bought the vehicle through his company and if you brand it "magnetic decals" it becomes tax deductible or that is the story he told us. 

 

And just before provisional tax season .....

 

different strokes for different folks ....

[_David_]

9 minutes ago, throttles said:

The tax benefit would be related to the interest paid on the repayment, and then on the depreciation.

Or thats how i understood it, either i'm wrong or something has changed..

I don't know, I might even have the story totally wrong maybe you have to brand it if you buy it through the company? I'm no financial expert I can only tell you what he told me 🙂

 

Edited July 27, 2022 by _David_

[throttles]

24 minutes ago, BigDL said:

That I'll never understand. Why buy a car outright when finance is (comparatively) cheap. Surely that money would be better being invested somewhere? 

Needed to get the $$$ out the bank before the Zuma's take the Randela's..

[Paul Ruinaard]

1 hour ago, LazyTrailRider said:

Vehicle affordability has always been a fascinating topic for me. As South Africans continue to become gradually poorer in real terms (this is unfortunately the reality) I find myself looking at specifically new vehicles on the roads in and around different neighbourhoods, wondering what the annual income to cost ratio is for each I see. I know it's not as simple as that (there are a million factors which affect each household's affordability besides annual income), but it's a nice starting point for a generalised comparison.

Let's use my baseline: I drive a car which cost roughly 1/4 my annual income. I financed 50% of it at first because I only had about 70% of the cost available in cash I was willing to free up at that stage, but after a year the figures weren't making sense so I paid it off. Regardless, the 25% of annual is a comfortable cost to me.

When I see people in their late 20s driving new Polos (which now cost R300-R400k), my brain by habit converts it to "surely this person can't at their age be earning R1.2m-R1.6m/year?" This habit also kicks in when I see someone I know who is a director of a fellow software dev house in his brand new Disco 5 (which are now R1.5m-R2m): I think "hang on, is he making R6m/year?"

Yes, again I know it's not that simple because base living costs as a percentage reduce as you earn more, but then I'm also thinking "he's not parking that Disco 5 in the garage of house which only costs R4m..."

My wife has said several times I need to start an podcast series where I chat to people (anonymously) about the cars they drive and what their financial situation looks like to be able to afford it, from cheapies to ultra-luxury vehicles. I think it could be a fascinating read/listen!

You are like me. I ask this exact question often and wonder what i am missing in the grand scheme of things. I am moving but in my current housing location in an estate the house prices are in the max R 6m league. However no problems for cars in the R 1,8m to R 3m league to be parked outside. My question is how do astute people who clearly earn a lot of money make th maths work on this. You cant survive - its unsustainable to spend that much on credit.

I have however reliably been informed that most of the folks like this are really not doing anything to get any capital gains or pay down debt, they continually hollow out long terms gains from capital appreciation on fixed assets to finance inflation on lifestyle assets and lifestyles (holidays overseas, cars, luxury goods etc).  So they just service the debt. Same now with bicycles and the ability to finance them - just roll the credit every two years in to a bigger loan and hope something happens to get vast capital appreciation somewhere. Unfortunately my appetite for risk and luxury goods as well as stress is to low to gamble in this sort of game . Never mind the people who are seriously high rollers in gambling dens - which is also quite common.

I have a friend whose capital appreciation on his property took it from R 2m to R 6m in about 12 years. IN my maths he was pretty wealthy. However when he sold he literally got something like R 60k, so was using all that up to finance the lifestyle. He had great credits and went and bought another big place only to draw down the loans to renovate again at a major cost, so now the place is bonded to R 8m and worth R 8m, so he has a big loan he pays (big is understatement) and lives the life of riley...

I keep asking myself what i am missing.

 

[DIPSLICK]

when we start financing our bike repairs over 24 months, we seriously need to speak about the elephant in the room

[LazyTrailRider]

31 minutes ago, BigDL said:

That I'll never understand. Why buy a car outright when finance is (comparatively) cheap. Surely that money would be better being invested somewhere? 

Sounds logical in principle, but over a 5 year period, it's not always that straightforward to beat financing costs with investment. I've tried both sides and have settled on buying cash...

[BigDL]

58 minutes ago, LazyTrailRider said:

Sounds logical in principle, but over a 5 year period, it's not always that straightforward to beat financing costs with investment. I've tried both sides and have settled on buying cash...

Fair enough.

[PhilipV]

5 hours ago, ouzo said:

Yet everysingle person that walks across from them to us will comment on how crap the renault is, but they will still buy the renault over the honda because its cheap.

Do you sell Honda now?

We recently bought a '16 Jazz for my mother in law and we're seriously impressed with the brand. So much so that I think (I can hope) my wife's infatuation with VW is over. 

4 hours ago, _David_ said:

He bought the vehicle through his company and if you brand it "magnetic decals" it becomes tax deductible or that is the story he told us. 

That's a story. SARS doesn't care if it's branded pink, subtly or not at all. 

[BaGearA]

Gentlemen ....this is A Very dark thread to read through 

 

but dayum this is the closest we've had to 'chit chat ' in the last 6 months 

 

 

[MTBRIDER1234]

I agree with everything posted here. I am fortunate that I work in a bike shop, so I can do all the servicing for free and I get discounts on parts, clothing etc. But even so, it is not a cheap sport by any means.

I am seriously considering building a flat bar rigid (think old xtc frame or similar with cheap carbon fork), I am going to put on bulletproof parts (shimano 1x11) and it will be my bike for commuting and riding around. I neither feel safe, nor do I enjoy the added maintenance costs when it comes to using my enduro bike as a mode of transport.

Also the fact that I live 3 minutes ride away from Tokai is a blessing... fuel is so expensive now that I would never be able to bring myself to drive to the trails (this would only make a costly sport more expensive)

[eala]

People forget that cash is king .By having cash on hand i paid for two Europe trips  by using the Rand /euro/dollar exchange difference and timing in the last two years   

[eala]

6 hours ago, DIPSLICK said:

no conversations about new bikes and X amount makes sense anymore IMHO

financed or paid cash, I have some new bikes and a couple of steel frame pimped  Ritcheys and Niners,,,, I use the old steel bikes by far the most, I have said it a few times this time I will stick to it,,,,no more new bikes,,,it makes no sense, 

 

Same here .I have enough cycling gear ,bikes to last the rest of my life .

[Shebeen]

6 hours ago, Headshot said:

A friend of mine showed me his latest jewelry the other day - an XO1 cassette bought on "special" for R7k. Thats half the price of my first dual sus bike that came with XT and Fox. 

I don't see 1x11 as huge upgrade over 2x10.

 

The running costs of the two are markedly different

[Zebra]

7 hours ago, LazyTrailRider said:

Vehicle affordability has always been a fascinating topic for me….

My wife has said several times I need to start an podcast series where I chat to people (anonymously) about the cars they drive and what their financial situation looks like to be able to afford it, from cheapies to ultra-luxury vehicles. I think it could be a fascinating read/listen!

I wold subscribe to this/these podcast series…

please give serious thought to trying this, at least?
GO!
Chris

[daveno7]

26 minutes ago, Shebeen said:

I don't see 1x11 as huge upgrade over 2x10.

 

The running costs of the two are markedly different

brands will tell you its an upgrade....its all about sell sell....thats a great thing about SA cycling...they also want value....

[Hairy]

1 hour ago, PhilipV said:

Do you sell Honda now?

We recently bought a '16 Jazz for my mother in law and we're seriously impressed with the brand. So much so that I think (I can hope) my wife's infatuation with VW is over. 

That's a story. SARS doesn't care if it's branded pink, subtly or not at all. 

Pre Covid I would go to my outlying meetings in town with Ubers.

Of all the Ubers out there, the Honda's and Suzuki's were by far the best build cars (Viewing this after they are well over 100 000 km) .... suspension is good, doors and window still seal well and fell solid.

The drivers also said they would never drive any other brand again.

Both Honda and Suzuki are high on my list of cars when we go shopping again.