How to calculate (and ignore) The Friend Price
If you are like most car people, you probably buy and sell a fair amount of stuff. Vehicles, memorabilia, and general junk all come home with us from swap meets, garage sales, or random houses. Occasionally the other party is close to home. Friends, family, close acquaintances with good sob stories. Theirs is the right home for a thing you own, and you want them to buy it—but there is a hitch in the negotiations . . .
Enter the “Friend Price.”
This is defined as the deal that friends get and give to one another when exchanging goods and services. A case of beer can ring up at just $16, yet some of us accept it as sole payment for a two- or three-hour project. That’s for a friend; the public pays by the hour.
Who gets the friend price, and most importantly when they get it, is a highly personal decision. Feel free to use my personal “Friend Price Formula” that has been developed, refined, and occasionally blatantly ignored over the last few decades:
The Friend Price: The value of the base product, accepted in exchange for the premium version of that product.
An example from personal and recent history: The real nice, sorted XR200 motorcycle that had been sitting in the corner of my garage for a few weeks too long. Let’s say it’s worth $X, and a scruffy but solid version of the same bike is $Y. I’d sell a friend my bike, worth $X, for $Y. Usually, the friend price carries a significant discount, but the math is not standardized. In fact, this formula is more fluid than any I have ever encountered. Other variables can weigh into it: my current investment in the machine; the length of my relationship with the friend; their age; their proximity to me; and what they plan to do with that machine if they buy it.
By the time you are reading this, I will be on a plane bound for the East Coast. I’ll be picking up a motorcycle—a KTM 950 Adventure S—that I could only afford because one man’s personal Friend Price formula weighs the value of an adventure quite highly. This friend had once hinted at selling the KTM, and when we were both drinking whiskey at a racetrack—the racing was done, mind you—I took the opportunity to hint at my buying the bike.
I didn’t offer a price. I only told him what I wanted to do with the bike, and he negotiated with himself before arriving at an exact dollar amount: How much he would effectively short-change himself in exchange for being a part of a ridiculous idea.
In our state of endless optimism, a promise was made: If he sold the motorcycle to me, I would book a one-way ticket and ride it home. I’d plan the trip so he could ride a chunk of it with me.
Before we could uncork the bottle for a nightcap, I had cracked open my checkbook.
The convenience of not fielding a flurry of tire kickers and “is this available” messages is powerful. Are you really going to say no and sell your machine to the highest bidder? They will likely require some time and effort to find, and will likely subject your beloved machine to untold horrors, like spoke covers and duct-tape seat patches. No, you let the known overrule the unknown.
Though this person gave me the friend price, it’s inaccurate to say that the transaction put a price on our friendship. Rather, he put a price on how much money he would give in exchange for time. Specifically, time together, doing something we both enjoy. A rare, big adventure, full of stories that will more than likely be trotted out for years.
We gave ourselves just six weeks to pick a date. We didn’t plan so much as throw darts at a calendar, but we have finally managed to snatch a break from it all and escape. The trip is happening.
How extremely rare it is that schedules lined up, and we are both the kind of people whose closets hold a pile of gear marked “motorcycle trip.”
My “new” KTM 950 Adventure S is sitting in a storage unit. Once I arrive, I’ll throw all my gear in the bike’s luggage and head west. My friend will be joining me for a day or two on his KTM 1090 Adventure, when we’ll navigate a handful of sections of the North East Back Country Discovery Route before he heads back home. Then, I hope to navigate back to Michigan across Pennsylvania on as much dirt and trail as possible. Even before putting on my helmet, I already know both of us have forgotten the financial aspect and are instead reveling in the prospect of time together. There might be a way to calculate that time’s value to both of us, but that is math we’ll never do.
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“Friend Price” in my mind is the price that acknowledges all of the flaws in the item and deducts the ‘talk-down markup’ premium. If you know your car needs $500 in work, and your friend either knows this or will find out in fairly short order, you lower your asking price by $500 and of course tell them why. This is generally a no-haggle price
I’ve had the benefit of a lot of folks’ friend price. Or even the friend of a friend price. I’m a bottom feeder usually of anything old and trucks of any year, and the people in my circle know that if it’s cheap enough I’ll come pick it up with little to no questions. And they’ll never hear a word from me about the vehicle after that, which is another big thing that people want.
Yesterday I had my car at a small local show, held in a roped-off section of a grocery store parking lot. A younger couple, doing some shopping, came over and the man claimed that the Pontiac has always been his “dream car”. As we talked about it, the lady looked inside and remarked about certain things, asking questions and generally being interested. This was certainly not abnormal, and is one of the things I tend to enjoy about show ‘n’ shine events. Some time after they left, she came back alone, and stated that she had come to “buy that car for her man to drive her around in”, and that she wasn’t going to leave until we made a deal. She was very polite and nice, but quite incessant. She went through a lot of her life story, and pleaded quite well her case for why the guy she is wanting to marry deserves to have his dream car. I admit that I told her a little white lie: that if and when I ever sell it, she’d be first in line for negotiating, and she finally left, promising to “stalk that car” at every car show in the area.
So here’s the deal: this is not exactly in keeping with the theme of the article – she is not my friend (nor is her beau), but in keeping with Kyle’s tenant to consider” what a potential buyer would do with your beloved vehicle”, her compelling story of making this some sort of wedding present for her guy is sort of sweet. I’ve posited on these pages before how “what to eventually do with this car” has been a big quandary for me that is only set back by enjoying it for the time-being. But – just how far am I willing to wander into the concept of selling this young lady a car that would presumably make a nice couple happy? Might not it end up being just as sentimental to them as it is to me, long after I’m gone to dust?
Potential Spoiler: readers of this site might know some history of the car with me, and that it was built for and with my daughter as her “dream car”, that it made her extremely happy, but that she is no longer with us to inherit it. It obviously has a immense sentimental value for me, but realistically, I know I can’t keep driving it forever. The idea that it might serve a purpose to “someone else’s daughter” is slightly intriguing…
Unfortunately I know people who have had that line run on them and then saw the car flipped shortly thereafter
Relevant point, thanks.
That does happen, but personally I am pretty tight with who gets my friend price these days. And if someone does take advantage, they aren’t just burning buying from me, but a handful or other folks too. Friend price can be reciprocal across a friend group.
The caption of the top photo above reads “I’ve never met someone that simply let anyone with a checkbook adopt a pet. Why would I be any more cavalier with my beloved machines?”
It sounds to me like you have a lot of research on this couple to do before you actually consider selling this car to them.
Another valid point, thanks!
I totally agree with with George. Since the car has sentimental value to you and in order for you to part with it, you want to make sure it has a good home to go to, therefore I would be doing some research on them to make sure they have a place to store the car and can afford to take care of it. You definitely need to explain to her/them the importance of this car to you.
My wife bought my brother’s 1942 Ford truck and presented me the Title on our wedding day.
(How often does a bride introduce her husband to “the other woman” on their wedding day?) 😉
Then there is also “family price” : I had a good running SUV with cosmetic damage to the seats that I planned to sell at a discount, but my son needed dependable transportation, so I told him about the flaws & just gave it to him. Two years later he’s still driving it, & I don’t have a neighbor complaining about every little flaw that might have “turned-up” after I sold it to them cheap! (Don’t you just hate when that happens?)
Oh, the family price is even more dangerous!
Selling a car to a friend can end a friendship. If something goes wrong with the car and they blame you or they flip it right away for a nice profit, problems can arise. It all depends on how good of a friend they were in the first place. I try not to sell a car to a friend or even locally as I do not want to see it either getting worse or looking better than when I sold it.
I’ve considered the “I don’t wanna see it after I sell it” aspect plenty of times, and it does really make a lot of sense to me.
A few years back a close friend of mine sold me a mint low mile NA Miata at the friend price. Fast forward to last year when these had sky rocketed in value and I wasn’t driving the car because of all the reasons that you might be hesitant to drive a vehicle in that condition. I knew that i could easily double the price I paid if not more so I put it up for auction. It brought exactly 2 1/2 times what I paid for it. I promptly contacted my friend and informed him that he was getting half the amount over what I paid him. He was quite surprised and told me that I didn’t have to do that but I insisted that was what I was doing. This in my mind is how you keep friends and friend prices.
You are a good friend
Back in 1992 a friend had a super clean early 80’s Monte Carlo for sale. I had no room for another car, so I arranged for the car to be sold at the “friend” price to my coworker. My coworker ended up with a great deal, but rather than changing the title to his name, he got drunk and crashed into a ditch and abandoned the car. The police found the car, traced it back to the legal owner (my friend), and knocked on their door at 2:00 am. Needless to say, I lost a friend in that deal.
Go Kyle! Does us public peeps get a look see when you are back here in Michigan? 😁
What’s a KTM?
A KTM is a machine that turns full bank accounts into empty ones in exchange for the ability to out and explore the countryside as fast as you want to ride.
I’m sure photos and tales from the trip will spool into something to be shared here. Not to worry!
My neighbor had a 2003 BMW 1150RT that hadn’t been ridden if 15 years sitting in his garage. He said I could have it for $1000. My local BMW mechanic said it would cost between $2000 to $3000 to get it up to spec and running. So we came to an gentleman’s agreement that if it costs the amount the mechanic said I didn’t need to pay him the $1000. So with my Clymer manual and my mechanic friend talking me through some tough parts I got it started and running for around $400 in parts and another $500 for tires. Being a man of my word I paid my neighbor the $1000. Nice to have friends!
What I’m taking away from Kyle’s article, these comments and my own personal experiences is that friend (or family) pricing comes down to truly understanding what you’re giving or getting, in both the merchandise and the personal relationship. Of utmost importance is whatever happens after the transaction you’ve got each other’s back.
Enjoy that KTM 950 ADV, have a great time on the trip, safe travels to you; I’m sure there will be some great stories to follow, perhaps some updates along the way. I think I’ve just been inspired to go out and practice my adventure riding skills.
My brother asked me if I wanted to buy his Kawasaki that he no longer rode.
When I suggested he find another relative that might be interested, he said that he’d be afraid to sell it to someone with less riding experience. I’m still thinking about it…
I’m 61 now and as I’ve gotten older the desire to fix things for my friends for a 12 pack, lunch, or bottle of bourbon has really waned. I enjoy my time with great friends, and still work on friends’ stuff occasionally, but my time is valuable. A thanks and a sandwich after I’ve spent hours saving my friend $1,000+ just doesn’t cut it anymore. I don’t have time to even work on the various projects in my own garage. Man do I sound like a grumpy old man or what?
Grumpy, not really. I’d say you sound like someone who knows their value and aren’t comfortable compromising that value. Not a thing wrong with it. I think anyone who turns wrenches has a breaking point on what they are willing to do for others and there that should not be frowned upon.
I totally agree. Just turned 60 and have too many projects of my own. Just standard maintenance and repairs keep me busy. Then there are some who will never hear no. They are the few that would do anything for me no questions asked.
Dang if you didn’t hit the nail on the head Mr.Park!
Ditto!
6 years ago a friend who was the 4th owner was on a turboBuick forum and asking subscribers what his 1987 Buick Grand National might be worth. They low balled him, saying: $14K with low miles, $12K with more than 30,000 miles… I knew the car well – pretty good body. Had a non-original engine and about $3000 of aftermarket performance mods which I liked. But some dragstrip mods had to be reversed. I revised the fuel system, added some gauges and bought new tires and wheels for street use. Discovered a bent axle flange that nobody knew about. Easily replaced and not expensive ($124).
As-it-was, a quick flip sale price would have been $20K with longer term sale potential to $24K. My friend texted me: “Bob, the car is yours for $18,000”. I replied: “I can’t pay you that. I’m paying you $18,500!”
I put another $3500 and some work into it. Inflation happened that wasn’t necessarily predictable. Probably not worth $40,000, but it’s well into the 30s now. And it’s a blast to drive.
Enjoy the “new” bike.
I tracked down a Military Jeep that belonged to a college friend’s Dad for many, many years. I offered to become the caretaker of the Jeep and favor shined upon me and it is now retired with my Dad’s military Jeep. Hopefully I will get the courage to submit the story about it all some day so you can all read the history. Many people ask me what I would sell them for and I tell them that money cannot buy everything; my daughters will become caretakers when I can no longer perform the tasks. To some, it’s just something in the way but to some there is a story and sentimental attachment, when you hold the same steering wheel that the legends of your heart once held. I say prayerfully consider who you bestow your treasures upon – stories are cheap, legacies are forever.