Forum Discussion

MilesandSmiles's avatar
Sep 05, 2015

Depreciation Guidelines?

I've got a couple of questions about depreciation for a Class A Diesel RV. I frequently read that a new RV looses 30% of it's value the moment you drive it off the lot. I've also heard that you should expect to pay about 30% below MSRP on a new RV.

Now, I'm actually shopping used, which leads to some questions:

1) If a new RV is purchased at 30% off MSRP, and then loses 30% of value, does that mean that the resale value after a year is approximately 60% less than MSRP? (For example, MSRP $200,000 - 30% -> sale price of $140,000. Drive off the lot less 30% -> $98,000 resale value?)

2) Is there a simple rule-of-thumb based on MSRP of how much the resale value of a well maintained, quality diesel Class A should be depreciated over the first ten years? Meaning, just to get into the ballpark for negotiations?
  • Depends on YOU as a negotiator, the MOTIVATION of the seller and many other factors, such as time of year, condition of the coach etc. etc. To try and use a mathematical formula is time consuming and foolish. You think mfg/dealers/sellers don't all these threads anyway. That's why these prices are out of whack. MFG/ well if they're gonna knock off 30% lets raise the MSRP by 35%..:S.

    The MSRP on MY coach was $600,000. No way was that a realistic price. I.E. In Motion DSS system = $3400; Euro recliner = $1500; Power Cord Reel = $938; Sanicon system =$616...you get the idea. Inflate the price then negotiate it down and make the buyer feel like they're getting a good deal.

    Out west we do the same with real estate. Dumb!..Funny how we don't consider MSRP when buying a gallon of milk or a good pot roast...:S....Dennis
  • My rule of thumb is that you would pay about 20 to 30% of the original MSRP for a 10 yo coach that is in excellent condition.

    That is buying it at a reputable dealer that has completely gone thought the coach and assures that everything is functioning correctly at time of delivery. Private sales would be less but the buyer is left to correct all the deficiencies so the end costs are about the same.
  • The initial "drive it off the lot" huge hit you take is usually a one-time thing. From then on, it's not necessarily x% per year, generally. If you're looking at a 10-year old coach, you better off going by what they've sold for in reality than going by a mathematical formula.

    You didn't mention what brand you're looking at, but whatever it is, there is likely an owner's group that can give you more/better specifics. Depreciation can be quite different between models even within a brand.
  • One way to tell is to look at the COMPLETED auctions on eBay to see what a unit actually sold for. This is the real value, not the asking price.
    If you find a newer coach that had sold on eBay it is not that difficult to work backwards and find the MSRP of that unit which should allow you to compute the sales price vrs the MSRP.