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Originally Posted by Water Warrior
The loaner is also a demo bike plain and simple. So the company accountant will just keep writing it off one month at a time until it sells. A good acct will make sure they never just break even on a bike.
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I'm just a simple business guy, but a writeoff is a cost, in real money, that comes right off your bottom line. It is not a magical profit fairy. The loaner idea may be a good one, and it may even contribute to profitable sales, but the implication that transforming a brand new bike into a demo and then selling it at a reduced price is an automatic moneymaker (because you "wrote it off") is magical thinking. More than likely, the inventory at the dealership is "Floor-planned" and, in addition to losses associated with depreciation, mileage and maintenance, there are probably also carrying costs associated with unsold product, although, given the ridiculous interest rates of late, they probably aren't much.
Also, having sold vehicles (both new and demo's) it's been my experience that it's the sales manager and the trade-in appraiser that make good (or bad) deals. Accountants can tell you how bad or good after the fact, and provide cost info prior, but they typically have nothing to do with sales negotiations.
One thing is true: dealers are not in business to "break even." But it does happen sometimes, as do outright losses, typically when a trade is overvalued or a bike/car sits on the floor past its birthday.