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Is Riding A Motorcycle A Bad Financial Decision?

How many millionaires do you see riding around on motorcycles? Outside of movie stars – who don’t count because they’re not exactly known for their financial wisdom – the two are not a common combination and there’s an economic reason for that. So, while you’ll sometimes hear people talk about how affordable a motorcycle is compared to a car, the balance sheet is not always what it appears. Before you buy, it’s important to know what it costs to own a bike.

On The Surface

There are two main arguments that people make when they want to make riding a motorcycle seem more affordable than driving a car. The first is the actual cost of the vehicle. Sure, a motorcycle might be cheaper to buy and maintain than a car, but it has limited potential in terms of what it can do; you can’t expect to transport your whole family with a motorcycle, move furniture, or even pick up a big load of groceries. Very few people can rely exclusively on a motorcycle.

Similarly, the other financial argument typically hinges on gas mileage. Motorcycles typically get excellent gas mileage, especially for highway driving, but that’s because you aren’t hauling an entire family and their stuff. Paying for gas for a car is still going to be financially more practical than renting a vehicle anytime you need to move more than your individual body. Drivers need to get real about these add-on costs.

Insurance Issues

One of the main reasons that riding a motorcycle is more expensive than driving a car is because of insurance coverage. If you only purchase basic motorcycle insurance, know that it will generally only cover you as a rider, even if you typically have a passenger on board. That’s because motorcycles aren’t considered transportation, but rather leisure vehicles. Every rider needs their own insurance policy, so you may find yourself buying multiple layers of coverage. Car insurance is expensive because it bundles coverage for multiple passengers.

Additionally, as with car insurance, the cost of your motorcycle insurance will vary based on accident history, the type of motorcycle, and add-on safety features. A good driver of any age with a cruiser will pay far less than a young rider with a sports bike because of the likelihood of an accident. If motorcycles are implicitly associated with risk, then age and bike type only up the ante.

Make sure to do your research regarding whether your state requires insurers to bundle personal injury protection (PIP) insurance with your motorcycle policy; odds are good if your bike takes a hit, you’ll take one too. Some states don’t require insurers to offer both, and if you need to split your policies between insurers, it will cost even more than two policies would otherwise.

The Accident Factor

If accidents are already factored into your motorcycle insurance, what more is there to say? A lot, as it turns out.

The main issue with motorcycles is that, although they represent a small percentage of total accidents, the vast majority cause injuries and fatalities are much higher than for traditional motor vehicle accidents. In Arizona, for example, only 0.7% of traditional motor vehicle accidents result in fatalities, but fatalities occur in 4.7% of motorcycle accidents.

With all this in mind, then, it’s important for those considering investing in a motorcycle to consider that you may lose earning power or be permanently disabled by an accident. While this is true for any vehicle, it’s far more likely for motorcyclists. As such, the cost of riding a motorcycle should include medical expenses, lost earnings, and impact on quality of life. You can’t predict an accident-related injury but you can account for one in your calculations.

If you want to make a smart financial choice when it comes to transportation, opt for something sturdy and long lasting that ranks well on both highway mileage and accident ratings. It might not seem as wallet-friendly when you’re at the dealership (and it definitely won’t seem as cool), but you need to play the long game. Warren Buffet owns a motorcycle company, but you won’t catch him on the back of one.