What’s the price-quality correlation for bicycles?
Although I’m generally a fan of credit unions, and I’m certainly a fan of bicycling, I’m not at all a fan of this new bike-loan product:
* Rates as low as 7.50% APR*
* 12-month term
* Borrow up to $2,500
* 100% financing of bike plus accessories
One of the best things about bikes is that they’re cheap. Yes, it’s easy to spend $2,500 on a bike if you put your mind to it — or much more even than that. But the only people buying $2,500 bikes should be people who can easily afford to pay cash for them: no one should be taking out a loan for that kind of luxury.
With any luck Eric Matthies will weigh in on this question on his blog — he knows much more about biking than I do. But my gut feeling is that the price-quality correlation when it comes to bicycles is pretty low, and that much of the time it’s actually negative. (What you gain in terms of lower weight — which is generally what you’re paying the big bucks for — you often more than lose on the functionality front.) If Portland credit unions want to encourage daily bicycling, I don’t think that a $2,500 racing bike is exactly what the doctor ordered.
I’ve spent the past day in San Diego (that’s why blogging’s been light) and my mode of transport while I was here was a rented Bianchi Cortina — a very nice bike which retails at $429. My feeling is that $400 is pretty much the maximum sensible price for a new bike for anybody who needs to borrow money to buy one. Maybe make it $500 with the accessories (helmet, lock, lights) included. But $2,500 is just silly.
Update: Eric Dewey from the credit union offering the loan pops up in the comments to say that the high limit was put in place as a sign of support for Portland’s custom bike builders. Which is nice. But I still like to think that we’re moving towards a world where people only buy a custom bike after they have the money to do so.