Market value?

[pete376403]

I don't think you can use "insurance companies" and "moral obligation" in the same statement.

[swbarnett]

I don't think you can use "insurance companies" and "moral obligation" in the same statement.

Agreed. I think this sums the whole issue - corporate greed.

[quickbuck]

You should run an engine in reasonably hard, not nanna it around.

A bit of a moot point now.....
But yeah, thrash it in and it makes more power earlier in it's life, but won't last as long....

[Mike.Gayner]

The correct way to run in a bike is exactly as laid out in the owners manual. The engineers the designed and built the bike have a lot more useful wisdom than random internet people who read something somewhere that one time.

[russd7]

but 1500kms in four months of owning a new bike, shit when i bought my bike new it was over due for first service after first trip, he shoulda been riding the damned thing

[ldcroberts]

but 1500kms in four months of owning a new bike, shit when i bought my bike new it was over due for first service after first trip, he shoulda been riding the damned thing

absolutely, if I was to buy it again, I'd get one already run-in even if it was the same price as brand new or not much more (as long as it was genuinely run in correctly). 60kph top speed keeps you fairly close to home really

[russd7]

i do agree, if the insurance company can find another bike of similar age and kms for the price they are offering then get them to purchase it otherwise they have no idea on the fair market value and should replace with new. and don't forget to hit them for your gear as well, a helmet should never be worn again after a crash regardless of whether you think it is ok, they are a one crash item and it has done its job, there may be hairline cracks that you cannot see which will compromise its ability to correctly do its job a second time

[pzkpfw]

their policy wording actually states they will replace with brand new if less than 12 months old. This is what they give the guy that hit me - he gets a replacement car. As the victim I'm not their client so it instead falls back on international law where they pay actual value (up to $2million) of damages on behalf of their client for whatever damage he causes.

As to the people that state it's not what I would be willing to sell for and everyone knows bikes lose value - that's not true - show me an average person with a new bike that "willingly" sells for a big loss (i.e. no pressure to sell) and I'll take your point, if you can't show me that you have to concede my point. It doesn't lose value to the owner, it's only when forced to sell that you can't get a price you quite want for it so you lose money.

You can argue all you like that when forced to sell you can accept that 9k is fair as in all you'll get, but thats a different scenario. If you imagine a market where people willingly sell near new bikes to buyers who will meet their expectation then what is the price then? higher I'm sure, and that's what the damages are supposed to be based on. The way they are currently basing it on imagined forced sales is a distortion that favours the insurance companies - just like my example where you are forced to sell a beer you started drinking on the 2nd hand market - the value is arbitrarily less rather than pro-rata based on fair usage.

So should he say he'd have been "willing" to sell for $2 million?

The law/policy/common-sense is based on both the buyer and the seller, agreeing on a sale. I can see your point, that he'd have not sold his bike (unless under duress) for $9k, but in the end some kind of outcome is needed, so someone has to decide what's reasonable, for reasonable people to reasonably agree on. Not what one person claims. (Or should the insurance company claim that they'd found a buyer who'd have been willing to pay a buck-fifty for the bike?).


Insurance sucks. My own bike is not far from new condition, and flip all kilometers, relative to its age. But because it's a 2006 the insurance company has it valued at $4,000 or so. No way I'd be able to buy a bike in as good condition as it, for that money. I'm at the stage where I'm wondering if paying for full insurance is even worth it. Still, there's no way I'd be without insurance of some kind.

Crap happens. Insurance just doesn't take all the stink off.

[swbarnett]

Insurance sucks. My own bike is not far from new condition, and flip all kilometers, relative to its age. But because it's a 2006 the insurance company has it valued at $4,000 or so. No way I'd be able to buy a bike in as good condition as it, for that money.

Then you need to get your evidence together and challenge the valuation. Don't just bend over.

[ldcroberts]

i do agree, if the insurance company can find another bike of similar age and kms for the price they are offering then get them to purchase it otherwise they have no idea on the fair market value and should replace with new. and don't forget to hit them for your gear as well, a helmet should never be worn again after a crash regardless of whether you think it is ok, they are a one crash item and it has done its job, there may be hairline cracks that you cannot see which will compromise its ability to correctly do its job a second time

Well with the helmet, they are refunding in full (it was only 1 week old at time of accident - I shudder to think what they would pay for it if it was 4 months old as well - they would probably say it had a market value of $0 to a potential buyer and pay nothing if they used the same logic)

[Gremlin]

Then you need to get your evidence together and challenge the valuation. Don't just bend over.

Get a shop to provide a written evaluation, ask insurance to raise the value, provide valuation. Doubt they'd have a problem with it, as they'd charge you more for the higher value anyway.

Easy enough... then the shit fight comes if you need to claim

[James Deuce]

At least 2k less than you think it is worth. Shop valuations for 2nd hand bikes are valueless. They're the sort of people who expect $6k for 20 year-old bikes with square wheel bearings, rotted exhaust systems and "lubrication required" surfaces with a faint film of the original factory grease. They have a conflict of interest when providing valuations because they are the ones trying to keep the price of 2nd bikes phenomenally high and will trade in something that would comfortably sell privately for $8k for $2k and then resell for $10k without providing any extra value whatsoever.

[ldcroberts]

Ok I've sent them a letter (removed companies name for privacy reasons), will see how it goes:

Hi,

I'm concerned that my vehicle valuation wasn't done fairly as the amount is lower than I consider a reasonable person would sell an equivalent bike for if they had no pressure to sell.

I have researched and under international law the amount is supposed to reflect the highest price that a willing seller could sell to a willing buyer for given that both parties know everything about the bike.

I have spoken to [Registered Valuer] and they have said their process is to look at what similar bikes get sold for historically on the 2nd hand market and base their valuation on that.

I have spoken to Motor Vehicle dealers who use the same process, and they have said that the the only people who sell bikes after 4 months are people that knowingly accept a loss as they have to go overseas or otherwise are pushed into selling.

So my concern is that the dollar value they are coming up with is based on "unwilling" sellers and buyers who have limited information about the history of the bike (how it was run in, etc) - so the sellers are pushed into accepting less and the buyers are reluctant to offer more due to the uncertainties (has it been thrashed, etc). This dollar value is "lower" than a "willing" seller would sell for and also lower than a willing buyer would pay if he knew more about the bike.

To test this theory I contacted other bike owners and asked them how much they would be willing to sell a bike for after 4 months of low use, and everyone said the original purchase price - nobody was willing to sell for $1500 less than they had invested in the bike after such a short period of time had elapsed.

Looking at the insurance market this is also backed up as these days people place a value on having a policy that replaces a less than 12 month old vehicle with brand new - this is because the owners consider it new for the first year and expect a replacement, so they insist on insurance cover that meets this (reasonable) expectation.

So let me get to the point, if the valuation wasn't done fairly, who is at fault? [Registered Valuer] says that his process is transparent - you ask for market value, he works out resale value which in his eyes is the same thing, and you and him are happy and the consumer loses out.
My concern is that as this is a lower value than fair market value (as explained above), it favours your business to go along with it - so you may not be willing to correct his understanding that he should be looking at a "willing seller matched to a willing fully educated buyer" amounts. In fact you may not even ask him to provide this directly.

So I have a question - do you require [Registered Valuer] to provide you with fair market value as a "willing" seller would agree with a "willing" and clued-in buyer? What does the wording in your contract with them state?

I would like to know as this issue affects not just me, but numerous people involved in similar accidents, and I'd like to seek some discussion so that I can work towards correcting this system to make it fair for everyone.

I would appreciate it if a team leader at [Insurance Company] could please call me and discuss this.

For further reference, I would consider that seeing as I spent around $10,500 on purchasing the bike and getting it on the road and servicing it, that after 4 months I would expect a fair price that I would agree to sell it at to be around $10,000 allowing for wear and tear and usage of the ORC. In support of this I would like to add the additional information that I rode the bike in carefully as per manufacturers instructions - and that this was a difficult task that most reasonable people would consider added value to the bike - and in fact may have made the bike worth even more than the brand new 0km price to some people who would not have the time to devote to running it in and if presented with the option of a carefully run in bike for the same price as brand new would opt for that (I can supply references from other people who agree this point). So my belief is that a buyer who knew all of this about the bike would consider $10k to be a bargain for the bike in question. Certainly I've made enquiries about purchasing a pre-run in bike and I've been quoted $11k or more for this for exactly the same make and model as mine, with exactly the same kms etc.

[ldcroberts]

On a related note, are there any licensed motorvehicle dealers out there who would be prepared to estimate the highest "fair" market value - i.e. in the scenario where the seller is willing and happy and the buyer is fully informed - for the Burnt Orange Ninja 300 SE ABS 2014 with 1700kms on the clock and a late Nov 2013 first registration - that most reasonable owners would agree was fair for selling if they didn't have to sell. (i.e. not what will it fetch on the market if you must sell, what would you realistically agree to sell it for if everything was fair - assuming the bike is in perfect condition and used carefully - i.e. just driven between dealerships still for sale brand new).

[Mike.Gayner]

If you want to sound more informed you should stop making references to international law. You don't seem to understand what international law is, and you seem to think there's some sort of international book of statutes and an overriding global court. International law is a nebulous web of ratified and unratified treaties and agreements that generally deals with national interests and agreements. No insurance company and certainly no NZ court gives a shit what "international law" you claim to have researched.

edit: To be clear, you appear to be under the impression that "international law" is somehow supreme to our domestic legal framework. The opposite is true - "international law" is subordinate to the statutes and case law of sovereign nations.

On a related note, are there any licensed motorvehicle dealers out there who would be prepared to estimate the highest "fair" market value - i.e. in the scenario where the seller is willing and happy and the buyer is fully informed - for the Burnt Orange Ninja 300 SE ABS 2014 with 1700kms on the clock and a late Nov 2013 first registration - that most reasonable owners would agree was fair for selling if they didn't have to sell. (i.e. not what will it fetch on the market if you must sell, what would you realistically agree to sell it for if everything was fair - assuming the bike is in perfect condition and used carefully - i.e. just driven between dealerships still for sale brand new).

No dealer in their right mind is going to tell you your used vehicle is worth the same as a new one they're trying to sell. BTW your concept of a "fair" sale seems to be one where the seller dictates a price and some fictional buyer accepts it (a buyer who, mysteriously, doesn't give any credence to the fact that it's second hand).