Depreciation

Anyone have a view on whether the NADA price guide is anywhere close to the actual value/purchase prices paid for used motorhomes? They seem somewhat high to me, but just starting to look at moving from our current 5th Wheel to a 26-28 foot Class C.

A great question and some great responses.

From my view there are a couple more issues that effect the depreciation, the first is the original selling price. Many of the new prices are way out to lunch. I looked at a couple units recently and one was listed for $168,000, I pulled some ads from a couple years ago and that same unit was $80,000 so in two years it doubled in price but the chassis that it was on only went up by $5000. Used units were being listed for $120 to $140 and they were NOT selling because people were realizing that the prices were insane. In actual fact that new $168,000 unit was worth closed to $80,000 or less. When I talked to a dealer they told me that they are selling for market value but almost 100% of the inflated units were being financed so really the buyer was falling for the "Only $250 a month" sales pitch and not looking at the true selling price.

Second is the financing. There is NO reason that an RV should be financed for 25 or 30 years with zero or next to zero down but many dealers are playing with the terms in such a way that they are getting 30 years and in some cases more. One local dealer even runs ads "Are your payments on your RV too high? If so come in and we will adjust them"! The way they are adjusting is they are adding big time years on the loans to save the borrower $50 or $100 a month but in the end they are paying tens of thousands more in interest and are facing huge buyouts at the end. Then when the borrower wants to sell they find they owe more than what it is worth. Saw a 5 year old unit that was for sale for close to new price, I knew the seller and he said "I cannot afford to sell for what it is worth".


If you are buying buy what you can afford, sure you may get an older unit or one with less features but if you pay cash or the majority cash then you will not get stuck owing so much if you want or need to sell.

I never gave depreciation much thought when purchasing my used Cambria. I purchased from a private seller in Mn. and I live in Ca. Exactly what I wanted and his out of pocket upgrades sweetened the deal.
I don't trade off my vehicles very often so depreciation wasn't a consideration nor did I look at my rig as an investment. I give all my vehicles top of the line maintenance and when the time comes I get what it's value is. Even considering the fuel mileage. At 8.5MPG after 30K miles it's still better than any hotel i ever stayed in. I know when the linens were changed, the food is good and it's just plain fun being in it on trips.
I would purchase used. Many of the warranty bugs have been repaired, the value is there because of the depreciation hit the original owners took.
I would not purchase a warranty. A Ford chassis and the V-10 will run 300K miles easy with proper maintenance. Save the money and use it on a reputable mobile RV mechanic. I am a mechanic by trade and use mobil mechanics on some of my projects .
Hope this helps.

I think that selling prices from private parties drop quite a bit more if rig is 10 years old vs 2 years old. Online asking prices for 10 year olds seem optimistic, online dealers will probably dicker. In any event, you need to make sure that everything works and get a written estimate for any repairs/replacements needed to make rig fully functional BEFORE you sign. If repairs/replacements are to be done by dealers, have all promises written into the sales contract with a time limit including legal phrase " Time is of the essence."

When researching values of used RVs, especially ones that are only a year or two old, you have to somehow figure out what they actually sell for, not what some dreamer wants to get in their advertisement. Even if you can somehow find a "selling price" you would have to determine if it was artificially inflated to complete a sale. Examples would be a rig worth 50 thousand being "sold" for $70K so the selling dealer can show paperwork giving the buyer $30K (the amount of their payoff) for their trade in worth only $10K. Also, there are "sales" where people with bad credit take over payments on a rig. Often these "sales" are done without the approval of the original lender and 6 months or so down the road the original owner has a huge mess to contend with, but at the time of "sale" they can say they sold it for what they owe on the rig.
Since new vehicles generally qualify for better financing, have an intrinsic value by being new (no one has slept in the bed, pooped in the toilet or farted on the sofa) and can be configured to exactly meet the wants and needs of the buyer, they have much more value than even a one month old used rig. Obviously there is no exact formula to determine depreciation, but an expectation of depreciation exceeding 30% of the new vehicle's actual true purchase price on a one year old rig wouldn't be too far off, and similar to an automobile, three year depreciation in the amount of 50 to 60 percent should be close to accurate. As you get older, condition comes more into play and a well maintained rig has the depreciation curve flattening over the next several years.
Like others have said, you don't buy a RV (or boat, plane, car, truck, motorcycle, bicycle or pair of walking shoes) with the expectation you won't lose big time on the purchase.

We looked at a couple of rigs last September at the Pomona fiasco and the rigs we almost bought was about $80K at the show. We could get a few extras thrown in just to buy now. Decided at 77YO, it was to big a debt. Looked for one and two year old models on line, they were at or above the everyday published prices from dealers including CW for a new rig. I showed one seller an ad for a 2018 model and his ad for a 2016 model, I suggested maybe $10 or $15K less than he was asking. He just shrugged and said, "I owe way more than that".

How come with a very high credit score a down of 15 to 20 percent is suggested and yet folks still owe more than the used vehicle sales prices after two years. I am thinking I should make at least 25 to 50 percent down not 3 percent like guys have said they were allowed to put down.

So it's just like pre-housing bust, no down for folks with really bad credit and then they find out they can't continue to pay and want a prospective buyer to bail them out.

It appears many owners are upside down financially so are trying to get all they can. I am old school and would never think of financing an RV. Is there a worse investment on the planet? Anyway if you find a rig you like and it checks out shoot them a low ball price. Nothing lost. What price is asked is only asked. Let someone else pay initial depreciation. Shop wisely. The ball is in your court

I did a lot of research before buying our 2012 Nexus that was 18 months old with just 6,205 miles on it. It was identical to the new coach I was a heartbeat from ordering from the factory but $15,000 {and two trips from Tucson to Elkhart} less than new or roughly 25 percent+ savings.

Whatever little bugs that all coaches come with had been addressed with one exception that the factory remedied for free on a subsequent visit to Elkhart. Even got lucky and picked up a set of brand new Michelins thanks to the recall. The rig is now going on 6 years old with 48,000+ trouble free miles and would appear to be holding its value quite well.

:C

Every used unit I have bought has had its share of issues to be remedied. My new unit had some as well, just more frustrating trying to get them fixed under warranty.

OP I have ask myself this same question, many times. I look at what 2005. 2008 or 2010 units are selling for/asking price now and what they currently would sell for new. I see some units new now would sell for $75K while they are asking $30K for a 2010 for example. That tells me they depreciated roughly $5-6K per year. Although that is a lot, there is also the issue of what a luxury car sells for now and what it would sell for if it were a 2010 model. I know it costs a lot to RV but I do not see the depreciation cost to be that great if you want to have your own bed and control of your environment. Bottom line is if you want the answer to your question, look used prices and compare them to new ones. Sure the depreciation is horrendous if you are only going to own it a year or two.
I also have looked at the 1-2 yr old units versus new. From reading this forum, it seems to me that the common thread is the used units should have most of the "bugs" fixed where the new unit will not. I personally like new for cars as I know every thing about them from day one and drive them until they are pretty well worn out. Rvs may be somewhat different.