Depreciation Guidelines?

[MilesandSmiles]

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?

[Blackdiamond]

bluwtr49 wrote:
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.

I think your rule of thumb is way off. I bought a 1 year old used coach that had an MSRP of $228K for $135K from a dealer, there is no way I would have bought it 10 years old for the same price, or anywhere near.

[Two_Jayhawks]

Effy wrote:

John&Joey wrote:
My fast rule of thumb has always been 50% every five years. Not very scientific, but as a general rule it has served me well.

So a 10 yr old MH is worth nothing?? :h

Nah a 10 year old unit would be worth 25% of when it was new.

[Jayco-noslide]

No matter what I'm selling on my own I try to not think to much about the amount because I usually think the item "should be worth" more than I'm getting. Useless thinking. It brings what it brings. Expecting too much starting out probably cost me on the last truck I sold. Never thought I would have such trouble selling a nice Chevy truck. Eventually sold it to a dealer. Booo.

[Effy]

John&Joey wrote:
My fast rule of thumb has always been 50% every five years. Not very scientific, but as a general rule it has served me well.

So a 10 yr old MH is worth nothing?? :h

[John_Joey]

My fast rule of thumb has always been 50% every five years. Not very scientific, but as a general rule it has served me well.

[muskrat49]

DSDP Don wrote:
"DunellenGuy".....

Within a few days of searching and looking at adds, you'll know exactly what a clean one and a beat up one is worth.

No you won't. You'll know what people are asking for them. Not what they ultimately sell for.

[DSDP_Don]

"DunellenGuy".....When it comes to RV's you can do mathematical equations until you're too old to drive an RV. It's pretty simple to figure out what a selling price should be. Find the year, brand and model you like and then do a search nationwide for a price.

As an example, if you're looking at a 2007 Fleetwood Terra, search everything that is close. Fleetwood made a similar unit called the Fiesta. Any coach within two model years will give you a good base price. Once you know that a 2007 Fleetwood Terra should sell in the $40K - $45K range, you can start narrowing down your search.

Within a few days of searching and looking at adds, you'll know exactly what a clean one and a beat up one is worth.

[Fiesta]

If worrying about depreciation in a recreation vehicle (all kinds) is a major concern, stay home. You will never get your money out of them. Just go have fun. Isn't this why many Americans have disposable income?

[Mr_Mark1]

Kayteg1 wrote:

Mr.Mark wrote:

You do realize that the Federal Reserve kept the interest rates at zero or near for a very long time, just now thinking about raising them. Home interest rates at less than 4-5%.

MM.

Yeah, that will go far away on sidetrack, but even with all that Fed's strugling, Las Vegas still has about 1000 listed foreclosures and probably twice that much unlisted.
In the mean time onion in California sells for $1.70/lb while I remember paying like 28 cents two years ago.
Far cry for $2.99 steaks 5 years ago
On positive side, I just bought new commercial range for my new home.
Retail $10.5k can be bought on the net for $4500.
I found closing warehouse 200 miles away that sold it to me for $1900. Few scratches on floor models, but DW will catch up with that in no time.
I wonder how far away deals on luxury DP are from that?

Kayteg1, looks like you are doing OK!

MM.

[Kayteg1]

Mr.Mark wrote:

You do realize that the Federal Reserve kept the interest rates at zero or near for a very long time, just now thinking about raising them. Home interest rates at less than 4-5%.

MM.

Yeah, that will go far away on sidetrack, but even with all that Fed's strugling, Las Vegas still has about 1000 listed foreclosures and probably twice that much unlisted.
In the mean time onion in California sells for $1.70/lb while I remember paying like 28 cents two years ago.
Far cry for $2.99 steaks 5 years ago
On positive side, I just bought new commercial range for my new home.
Retail $10.5k can be bought on the net for $4500.
I found closing warehouse 200 miles away that sold it to me for $1900. Few scratches on floor models, but DW will catch up with that in no time.
I wonder how far away deals on luxury DP are from that?

[Bill_Satellite]

DunellenGuy wrote:
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?

No, but 50% is pretty dang close (higher end manufacturers will be less and entry level could be more). I would never buy a new coach considering the value available in the used market.

[Mr_Mark1]

Kayteg1 wrote:

Mr.Mark wrote:
Like many of you said, it 'depends'.

We sold our 2008 Monaco Dynasty last summer (2014). We drove it 7.5 yrs. and put almost 70,000 miles on it. We bought it new.

We sold it and received 49.3% of what we actually paid for it in April of 2007 (not counting taxes). After paying the consignment fee, our percentage was 45.3%.

I thought the return was not too bad for 7.5 yrs. of enjoyment.

MM.

You don't count inflation in this explanation.
I bought several toys in last decade and after using them for several years I sold them for more than purchase price.
The deal was for example that I bought 4 years old boat for $11k when new one cost $25k
6 or 7 years later I sold the boat for $12k, but at the time new models were $50k.
We live in strange times. Due the fact that not too many people do have disposable cash, lot of new things can be bought for 40 cents on a dollar.

There was no inflation in those years. Ask people who tried to sell their homes, if they could.

You do realize that the Federal Reserve kept the interest rates at zero or near for a very long time, just now thinking about raising them. Home interest rates at less than 4-5%.

MM.

[Kayteg1]

Mr.Mark wrote:
Like many of you said, it 'depends'.

We sold our 2008 Monaco Dynasty last summer (2014). We drove it 7.5 yrs. and put almost 70,000 miles on it. We bought it new.

We sold it and received 49.3% of what we actually paid for it in April of 2007 (not counting taxes). After paying the consignment fee, our percentage was 45.3%.

I thought the return was not too bad for 7.5 yrs. of enjoyment.

MM.

You don't count inflation in this explanation.
I bought several toys in last decade and after using them for several years I sold them for more than purchase price.
The deal was for example that I bought 4 years old boat for $11k when new one cost $25k
6 or 7 years later I sold the boat for $12k, but at the time new models were $50k.
We live in strange times. Due the fact that not too many people do have disposable cash, lot of new things can be bought for 40 cents on a dollar.

[Mr_Mark1]

Like many of you said, it 'depends'.

We sold our 2008 Monaco Dynasty last summer (2014). We drove it 7.5 yrs. and put almost 70,000 miles on it. We bought it new.

We sold it and received 49.3% of what we actually paid for it in April of 2007 (not counting taxes). After paying the consignment fee, our percentage was 45.3%.

I thought the return was not too bad for 7.5 yrs. of enjoyment.

MM.

[Jayco-noslide]

I don't know but I think it's pretty difficult to estimate the amount of depreciation very accurately. To go from $200,000 to $98,000 seems pretty extreme to me but not impossible. An RV is only worth what a buyer will pay at any point in time so it could vary a huge amount. For example, if you try to sell a year after purchase, how long are you willing to hold out for a higher price. Or you might get lucky and find that 1 buyer in the area right away that really wants the unit. You might not find a buyer at any price. It's not like a reasonably priced house or car in that there just aren't that many buyers for such a specialized item. The only thing I know for sure is that RV's depreciate a lot and that's the single most expensive part of RVing. If you have to worry about it too much maybe you can't afford it.