When I turn the handlebars a lot of friction can be felt. This can be solved by loosening the huge bolt inside the headset that you can adjust when the handlebars are folded down. However, when this bolt is loosened, the handlebars can be turned out of their proper alignment with the wheel. How do I change this?
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There is a long bolt at the top of the neck which is used to pull a tapered nut into the bottom of neck.
Loosen this bolt by 3-4 turns and tap it down to release the taper. Secure the wheel from turning while turning the handlebars and the handlebars can then be raised or lowered as required. Straighten the handlebars in relation to the wheel and retighten the neck bolt and you are done.
To raise or lower the handlebars, first loosen the hex screw on the top of the stem. One or two turns is all that will be necessary. Next, you will need to stand in front of the bike with the front wheel between your legs to brace it, and give the handlebars a forceful twist to the left or right. This action will break the friction of the handlebar stem and the headtube (the headtube is part of the frame where the front forks and the handlebar stem meet...). With the handlebars loosened you can adjust the handlbars up or down. Keep in mind that the stem has only a specific amount of adjustment available...there is a limit to how far it can be extended up, as indicated by a line marked on the stem shaft. Once adjusted to the desired height, check that the handlebars and front fork and wheel are aligned. Tighten the screw in the top of the stem and you're done!
I think that bike has a v-brake on the front. You probably need to loosen the spring tension adjustment screws. On each brake, near the pivot, there is a small screw - turn them counterclockwise until you see a gap between the pad and the rim. If you don't have enough play, you may need to loosen the screw on the top of the right (i think) brake to give you some slack. Try the tension screws first.
Usually there is a hex bolt or some kind of bolt in the handlebar stem. Loosen the bolt 4-5-6 turns. Bolt will move upward. Then hit bolt down with wrench. Handlebars should be loose. Raise handlebars to position. Hold bolt upward with fingers while tightening.
Loosen the two bolts that holds the front brake master cylinder on to the handlebars and slide the front brake master cylinder down as close to the right handlebar switch housing as possible. If this does not solve the problem, I'd guess that the front brake light switch was bad and needs replacing. It's inside the right handlebar swich housing.
Construct shims from aluminum (soda / cola) cans with scissors. Be careful not to cut yourself, sheared aluminum is very sharp. After you have cut a wide strip of aluminum, wrap it around the handlebar and put it between the handlebar and the clamps. This will increase the diameter of the handlebar and allow your clips to exert more pressure on the handlebars making them tighter. Try not to leave any aluminum exposed after fixing it; it's sharp.
If it is a conventional handlebar stem, loosen the bolt on the top of the handlebar stem a couple of turns, tap the bolt with a hammer.
The bolt should drop down, at this point the bars should be loose.
Do not raise the handle bars above the safe limit line as the stem could break of come out .
Once you have them where you need them, re-tighten the bolt.