Motorhome Depreciation

Ivylog wrote:
Harry, I've read most of your posts over the last two months and I get mixed messages. You would consider a used Prevost but you are concerned in this post about depreciation??? Over 40' DP's are not a cheap sport BUT they are the nicest way to go down the road and make great boondocking machines BUT most owners do not want less than 50 amp FHU's every night. While I highly recommend getting "educated" It's hard to make the number's work for owning an expensive DP especially if you are on a budget. Some days I do not think you are and others I do???
Some brands have been around longer than others (including bankruptcies) and as such have more clubs that you can belong to. We are currently on a Monaco in Motion caravan in the Canadian Rockies led by a fellow member for VERY LITTLE COMPENSATION. 20 days of letting someone else plan what we will do and while this is NOT the norm for us... we are doing many things we would not normally do. Next month we are going to a pre rally to the FMCA western rally in Redmond OR and at it the "bankrupt" Monaco will fix two items for free plus parts. Fortunately I'm having a hard time coming up with two items.
My point is there is more to this than depreciation, interest rates, Montana LLC, or Fair Market valus. At some point you have to decide to "JUST DO IT" but if you spent a lot of money and find it's not for the DW (or you) then you are going to have a big money hit. Rarely are we lucky enough to buy our last coach first so my suggestion is to buy something used in the $100K to $150K range and see how it goes. While hopefully it will not be your last coach, you will not be hurt too much if this adventure does not work out. Good luck in your search.

Why don't you go visit motorhome dealers, units for sale by owner, actually shop for the unit you might buy. By looking at your posts, you are looking for friendship, not the camping experience.

Foodsman wrote:
I have seen it said that you can pretty much plan on taking 35% off of the MSRP when purchasing a new Class A motorhome Gas or DP. I have also seen a good number of dealer prices to support that, especially when new models are about to arrive.

I’ve also seen a depreciation schedules looking something like this...

Year 1 18%
Year 2 10%
Year 3 7%
Year 4 6%
Year 5 6%
Year 6 5%
Year 7 5%
Year 8 4%
Year 9 4%
Year 10 3%

My question is two fold;
1. The 18% that comes off the 1st year, is it based on what you paid for the motorhome (after taking off the 35%) or is the amount of deprecation based on the MSRP?
2. Does the depreciation schedule hold by brand or do some brands hold up better than others? (Lets exclude buses like Prevost)

Thanks,

Harry

And if you believe what you read here...I have swampland in Arizona for sale cheap!

A coach listing for $350,000 you can buy for $227,500...? You keep beliveing that!! (35% of 350,000 is 122500)

Harry, I've read most of your posts over the last two months and I get mixed messages. You would consider a used Prevost but you are concerned in this post about depreciation??? Over 40' DP's are not a cheap sport BUT they are the nicest way to go down the road and make great boondocking machines BUT most owners do not want less than 50 amp FHU's every night. While I highly recommend getting "educated" It's hard to make the number's work for owning an expensive DP especially if you are on a budget. Some days I do not think you are and others I do???
Some brands have been around longer than others (including bankruptcies) and as such have more clubs that you can belong to. We are currently on a Monaco in Motion caravan in the Canadian Rockies led by a fellow member for VERY LITTLE COMPENSATION. 20 days of letting someone else plan what we will do and while this is NOT the norm for us... we are doing many things we would not normally do. Next month we are going to a pre rally to the FMCA western rally in Redmond OR and at it the "bankrupt" Monaco will fix two items for free plus parts. Fortunately I'm having a hard time coming up with two items.
My point is there is more to this than depreciation, interest rates, Montana LLC, or Fair Market valus. At some point you have to decide to "JUST DO IT" but if you spent a lot of money and find it's not for the DW (or you) then you are going to have a big money hit. Rarely are we lucky enough to buy our last coach first so my suggestion is to buy something used in the $100K to $150K range and see how it goes. While hopefully it will not be your last coach, you will not be hurt too much if this adventure does not work out. Good luck in your search.

I don't know where that scale came from, but my experience is 50% depreciation in 3 years. A bit less if the unit is in A1 cosmetic condition, a bit more if it's in rough shape or has mechanical issues.

MSRP is a fantasy and everyone knows it. Base your calculation on at least 27% off MSRP as the transaction price.

IMO I suggest if you are worried about depreciation for any RV, Boat, Airplane, etc. I suggest you do not buy one as all toys depreciate some more than other.

rgatijnet1 wrote:
Harry,
I tend to look at the value of an RV at zero and my cost to buy it is an expense, sort of like going on a cruise or buying airline tickets. The money spent is for enjoyment and no return is expected. If the coach has any value when I sell it, or trade it in, that is just icing on the cake.

I look at it the same way. An RV is a toy, much like a set of golf clubs, or a baseball bat, not an investment. On my personal financial statement, I would expense an RV and not capitalize it. What I recover, if anything, upon sale is found money. Not unlike a lottery ticket.

People tend to get into trouble when they buy a toy, put a minimum amount down then finance the balance for the longest possible time.

It's mostly based on what you paid, depending on what you paid. If you paid MSRP, then take the 35% off and another 18% the day you drive it off the lot.

It's the same with anything (although maybe not as steep.) If I buy a $30,000 car and drive it for one week and decide I don't like it, nobody is going to give me $30,000 for it since it would be better for them to go buy it from the dealer. It's a used car so unless you're a cash buyer you won't get as good of terms for financing so at the most it's worth maybe $25,000 as a one week old used car. Just the way the market works.

The depreciation comes off the price you paid. If you over paid then the depreciation is more, if you get a screaming deal, it still depreciates after you drive off the lot.

Harry,
Think about your first question.......1. The 18% that comes off the 1st year, is it based on what you paid for the motorhome (after taking off the 35%) or is the amount of deprecation based on the MSRP?

If it were 18% off of the MSRP, the vehicle would be worth more than you paid for it after year one. The 18% is a GUESS as to the amount of depreciation below the sales price that you paid for the coach. Personally, I think the 18% figure is low. I tend to look at the value of an RV at zero and my cost to buy it is an expense, sort of like going on a cruise or buying airline tickets. The money spent is for enjoyment and no return is expected. If the coach has any value when I sell it, or trade it in, that is just icing on the cake.

Depreciation is based in areas of country as well, your chart seems about right.

The depreciation starts the moment you sign the papers, 18 percent 1st year seems about right, maybe more is some cases..