Originally Posted by
Bikedued
The same pawn shop offered me $50 for a 4 year old $700 bike, so I can only imagine what they gave for the Klein. Probably $25? As for the rest of the post, and the "Billy Ray" reference, I have no earthly idea what you're talking about. It came off as more than a little odd.,,,,BD
Bike values bottom out in the 20-30% of MSRP for almost anything more than 4 or 5 years old. Bikes also have a profit margin of ~35% so knock that off MSRP for immediate depreciation.
A $3000 bike is only worth ~$1,000 after 5 years. That's a fair market value of $1000. If your a Pawn Store and buying you need to make money on your purchase, a purchase that may sit around for a long time. Factor in your profit margin and it's easy to understand why a Pawn Store may not pay a lot for a bike.
Lets say a Pawn store needs to make a profit margin of 20% and fair market value is $1,000. Who pays fair market value at a pawn store? Nobody. So maybe the store anticipates selling it for $800. 20% margin on $800 is $160 the may they could pay is $640.
If I owned a Pawn Store there's no way I'd pay $640 (~20% of MSRP) for a 5 year old $3,000 bike.