STM: A Little Knowledge is a Dangerous Thing

January 29, 2014
Frank Melling
Frank Melling
Contributing Editor| Articles|RSS

Our Memorable Motorcycles expert, Frank Melling also is the organizer of the British vintage motorcycle extravaganza known as Thundersprint. Melling began riding five decades ago and remains as much in love with motorcycles as when he drove his first bike into a cow shed wall aged ten. In the last 50 years, Melling has competed in every form of motorcycle sport and now declares himself to be too old to grow up and be sensible.

There is an interesting vogue currently apparent amongst journalists not only in the biking press but also the general media – and even the serious financial magazines. It is this: buy a classic bike and have a guaranteed profit.

The adage which I learned very early on in my business life, and has served me well ever since, still holds true: If a deal looks too good to be true it always is.

This golden rule of business still remains. Yes, you can drop lucky occasionally. I once bought 5400 helmets at a ludicrously cheap price because I happened to be leaning on the counter of a wholesaler as the bank took the keys off the owner and closed him down – but situations like that happen only rarely.

A clear statement that you can’t lose money on a classic bike is very different – especially when that advice is being offered not only to members of the motorcycling fraternity who really know little about classics, but also to the wider public who truly wouldn’t know the difference between a Narwhal and a Norton.

There are a number of reasons for classic bikes coming under the financial spotlight and, unless a little bit of thought is applied, they can easily lead to the wrong conclusions.

At the bottom of the financial pyramid is the cost of labor – not to say the actual difficulties of getting jobs done on a classic machine. If you find someone who can, or for that matter will, work on a classic, then British labor prices will run close to $60 an hour – and often more than this.

Unlike modern motorcycles, classics are often messy to work on. They might be mechanically simple but there is endless trouble in getting things to fit, modifying parts and repairing very basic things like worn-out threads with helicoils. So, take your pride and joy into the workshop for something very simple like new brake shoes and the bill can be quite shocking.

Repairing or restoring a classic can be a real eye-watering experience. I am regularly approached by individuals who have had classics restored professionally but then want to sell their pride and joy. The first question these amateur speculators ask is if I can put them in touch with a potential purchaser.

The Honda CB72 is a beautiful bike but not worth spending a fortune on restoration.
The Honda CB72 is a beautiful bike to be sure but not worth spending a fortune on restoration.

Just recently a really nice gentleman from the next town phoned me with just such a question. He had been sold a guaranteed no-loss Honda CB72 – the iconic 250cc Honda Twin from the 1960s – which had struck a chord with him because this was his first ever new bike purchase. He happily stumped up the $4500 asking price and should have ridden off into the sunset singing Beatles songs and remembering the time when he had long hair and no wrinkles.

Unfortunately, he got into the investment frame of mind and was advised – I do love that verb – that the way to make money was to have a full restoration done on the bike.

This is where things went wrong. Professional restorers are neither cheap nor fast and so the bike disappeared for two years and arrived back home with a bill for $10,000. Now, he owns a $15,000 machine which is worth around $5000. This is not exactly my idea of a guaranteed profit.

The next problem is the message which speculators read into the headline money which is made, and regularly too, by the very, very, very best bikes at auction. A few bikes have nudged the half-million price tag and there are plenty of $150,000 machines being sold.

So what makes an expensive motorcycle? A few years ago, I was asked to provide expert opinion on a race motorcycle which was being bought. I was offered a substantial fee for my services but backed off because, to be wholly honest, everything was getting too tense for my gentle, not to say cowardly, sensibilities. The bike was being brokered – sold on behalf of the owner – in Geneva for a shade under $400,000. So far, so good.

The crux of the matter was that the purchaser wanted originality. Now here was the sticking point. The bike looked absolutely original and just as you would have seen it on the grid of a 1960s GP, but I knew for a fact that the crankshaft and four of the gear pinions had been produced recently in England – because I had seen the engine in bits on a workshop bench.

Frank Melling - 500 Works BSA.
Frank Mellings Works BSA - But at what point
Frank Melling – 500 Works BSA.

The frame had also been repaired because I saw this at another artisan’s workshop – and there really are some clever craftsmen, if you know where to look, in England.

The tachometer was correct for the factory and model but was from another bike. Yes, I saw this in transit too.

As for the rest of the bike, I couldn’t be sure. The purchaser was demanding absolute originality so I stayed well away from the sale.

Does any of this matter? It was a works bike and with the bits made in England was capable of being run so why shouldn’t it have replacement parts?

This is as much a philosophical issue as a practical one and the isosceles triangle which it forms is a very steep one indeed. As a baby journalist, I was privileged to be loaned, and then finally given, a works BSA. In some respects it was a full-on factory machine so it had the trick “speedway” cam and a Reynolds 531 front frame diamond. However, by the time the bike came into my possession racing had stopped at BSA, and the competition shop had closed, so there was no 531 swinging arm. Instead, my bike had a lightened unit from a production motocross machine. Despite leaving the factory in this state, was my bike a true factory machine or not? The National Motorcycle Museum in Birmingham seems to think it is because the machine is on display but would a hard core, ultra serious collector?

A further issue was that every time the bike went back to the factory for a re-build it returned with different parts. The front forks were changed, the shocks, the cylinder head and barrel as the fitters in BSA’s experimental department found bits and pieces from the old competition department and slipped them on to my bike under the management’s radar. So, the final bike which is now on show isn’t the first bike I received. What then is the “real” bike provided to Frank Melling?
In practical terms, the machines which make a lot of money are original, rare motorcycles with documented history.


The legendary Brough Superior “Old Bill” met these criteria perfectly and so the price of $468,963 was understandable, if incredible. There was only one “Old Bill.” It was unrestored and had a history so complete that it made the Mona Lisa look like a Wal-Mart print.

As an aside, I personally can’t see the value in the bike. I actually sat on it when the machine was on show at Donington and, other than knowing that I had just lost my house if I fell over and broke it, it was desperately unspecial.

The standard and original criteria drive prices all the way down the price graduations, too. Ben Walker, International Head of Collectors’ Motorcycles at Bonhams auction house, explains: “If you take something desirable, but not especially rare, like a Rocket Gold Star (BSA’s beautiful 650cc Twin super sports bike) an absolutely standard machine, with matching engine and frame numbers, might make $18,000 because mainly a collector will want a bike like this.

“However, the same bike, in the same condition, but perhaps with a replacement engine might well be worth $7000 or $8000 less – even though it will ride the same.

Old Bill Brough Superior.
1923 Indian Big Chief with Princess sidecar.
1955 Vincent Series D Black Shadow.
(Top) Old Bill Brough Superior. (Middle) 1923 Indian Big Chief with Princess sidecar. (Below) 1955 Vincent Series D Black Shadow.

“I think that this is a good thing. I have just as much time for the grass roots enthusiast as I have for the serious collector and I am really pleased if I see a bike which is basically right, but which the enthusiast can improve and make his own, sold at an affordable price as I am seeing a 100-point perfect machine making top money.”

I have a lot of time for Ben not only because he consistently beats me in terms of valuing motorcycles but also because he is a real enthusiast – as well as being one of the smartest men in the motorcycling industry.

So this brings us to crunch time. Why are classic bikes being recommended as an investment? The short answer is that, worldwide, interest rates are at historical lows. If you had $10,000 in your hand in 2003 you would now need $12,660 to have the same purchasing power. No safe bank will pay interest at this level.

Also, don’t forget that you are taxed so what little the bank does pay doesn’t all come to you.

The situation is even worse in Britain – and far more severe in Europe. $10,000 in 2003 would need to be replaced by $14,120 last year.

During the last 10 years the stock market has suffered horrendous losses – as well as some gains – so stocks and shares haven’t been much of an option either.

This is why classic bikes look like close siblings of gold – with the chance of not only beating inflation but also making a profit. Bikes are small, easy to keep and you can easily tuck away $100,000 of investment at the back of your six car garage.

But are they as good as they seem? I have a lot admiration for Bonhams as auctioneers because they have nice machines, promote their sales well and the bikes are described honestly. Therefore, their January sale at Las Vegas was a very interesting barometer as to what is really happening in the classic bike market.

The headline acts were almost too obvious. A 1923 Indian Big Chief with original Indian Princess sidecar sold for $126,000. This is a lot of money even for a mint Big Chief but this was no ordinary outfit. It was owned by Steve McQueen and restored by the legendary Ken Howard and therefore the price was predictable.

A stunning Series D Vincent Black Shadow – the ultimate Vincent hyper sports bike – made $103,500: again, a certain bet.

So, if you had been really smart 40 years ago and bought a shed load of Vincents when they were available for $1000 – I had several and they are rubbish – you would have done really well. However, if you were trying to make a profit selling a lesser classic bike the story was not nearly as rosy.

Take the beautiful BMW R90S which sold for $15,525. This bike had done a genuine 9056 miles and then had been subject to a meticulous restoration to bring it back to zero-miles condition. As a bike, the 90S is classic perfection with a superb turn of speed, excellent handling and beautiful lines.

Bonhams charge the vendor 10% of the hammer price to sell their bike which is very fair for the service they provide. They also levy a 15% purchaser’s fee. This means that the actual value of the bike to the vendor is not $15,525 but $11,878. In reality, it is a bit less than this because there are some ancillary charges, too.

Inflation figures lag behind so we can only calculate backwards from 2012, rather than 2013. This means that a bike costing $11,878 ten years ago should now be worth $15,033 when corrected for inflation.

So over a ten year ownership – I have no idea how long the vendor did own the bike – the BMW not only failed to make a profit but, in real terms, generated a substantial loss on a like-for-like basis.

Anecdotally, this is about right. Ten years ago, a pristine R90S was worth about $10,000. Now, it’s worth $10,000 corrected for inflation – i.e. $15,000 – at auction and if sold privately maybe $12,000. This is exactly what the bike actually made in real terms.

Of course, the vendor could have bought it for two balloons and a goldfish originally and so would have made a substantial profit – but not nearly as much as he would have done by moving it on the following day. For sure, as a long term investment the R90 didn’t work.

The wholesale was peppered with bikes like this which were being sold at much lower prices than they were making ten years ago – when prices were corrected for inflation.

As a motorcycle to own, cherish and enjoy riding, the BMW was one of the stars of Bonhams’ sale. As a hedge against inflation, or even a profit generator – forget it.

My advice, if you want to buy a classic, is to get something which excites you day and night and which you can afford. Ride it, break it, mend it and then ride it again. If you happen to make a profit then lucky you. If you don’t, then so what? For under $10,000 nothing in the world will buy you as much pleasure.

I want to conclude with a classic bike story of my own. The tale is not so much about the bike but more that in this world of mass murders in schools, politicians who spy on us, multi-nationals who cheat us and a myriad of other horrible things, kindness and honesty still exists.

Team Mellings CBX 6.
Team Melling’s CBX 6.

A long time ago, when Carol and I were first boyfriend and girlfriend, I had a lovely CBX. Carol was a biking neophyte and so I took her to the TT on our beautiful, six-cylinder Honda dream bike and we had one of those weeks which made me certain I needed her for my wife. Fortunately, she felt the same about me.

We started a new life together and inevitably ran short of money so the wonderful CBX went – and we both immediately regretted it. Note the word both.

Just before Christmas our very good friend Peter Kent phoned and said that he had just bought some race spares from an enthusiast in Wales and at the back of the workshop there was a CBX. Now, Peter could have taken the bike for himself but he knew how we felt about another Honda Six so he told us about the bike. That was selfless behavior and kindness personified.

The vendor was an absolute gentleman. He did mis-describe the bike but only in that it was far better than he told us over the phone.

The following day, we returned to pay for the bike and we took our daughter’s dog with us since she was on holiday. The “Six” was as beautiful as we remembered our first CBX from all those decades ago and both Carol and I simply choked up like a pair of winning contestants at a talent show.

Ian, the vendor, refused to let us take the bike home in our trailer for fear of getting salt on it and also flatly refused to accept payment until his brother had delivered the CBX in his van. This meant that a brown envelope containing a very considerable sum of money was jammed inside my paddock jacket. Of this, more later.

Just we were preparing to leave, a filling decided to fall out of my tooth. It must have been the excitement! So there I was, digging around inside my mouth with my tongue, wondering whether my dentist would be able fix it just two days before Christmas.

The little dog was going crazy with excitement too – so much so that he threw up in the back of our car. Now we have the situation where I am groping around for my missing bit of tooth, the dog is going bonkers with excitement and I’m wiping up vomit. Bring on the clowns.

Clearly, the smart thing to do is to put my paddock jacket on Ian’s car to avoid the dog puke and also so that the brown envelope, containing the money, falls out of my pocket.

Five miles later, on the way home, Carol and I simultaneously come to the same realization that only a couple in a truly symbiotic relationship can: where’s the envelope? Panic. Fluttering in every bit of the body which will flutter – and some that won’t! The money isn’t here. Houston, we have a problem…

Phone Ian. Have you seen a brown envelope containing a large sum of money? Now, how easy would it have been to say no? How easy would it have been to let greed or dishonesty take over, as so often happens in this world? The money could have been anywhere and no one would have been the wiser but there was no hesitation in telling us that the cash was safe and sound. Tears came to Carol’s eyes again.

The CBX came home and on Christmas Day, we pulled it out of our workshop and just sat on it and thanked every God in the universe for kindness, honesty, motorcycles, CBXs – and each other.

There is a postscript. Despite the fact that our CBX, I do love that pronoun, has covered just over 800 miles since 1978, the original owner’s manual and toolkit have disappeared. If you happen to know where I might find either of these items please send me an e-mail to