Depreciation

[rseymour21]

I’ve been doing a lot of research on Class C’s and been thinking about how much a unit depreciations over time. Example, If you purchased and brand new Class C in 2016 for $80K: What would it be worth 12 months later in 2017, and how much in 2018?

Perhaps this question doesn’t really have an answer, or maybe the answer is in what Make & Model?

I’ve been looking at used units that are 1 to 2 years old and sometimes it just doesn’t seem like enough difference between these and a new unit.

Looking to see what Y'all think! Thanks in advance! Ru

[hoosiermark]

good point western park owner! Reminds me on when I was a banker. Guy borrowed money on a well drilling rig, it broke, he told us to come get it and we did after suing him. We sold it for 20% of what he owed. We then filed to have the judgement enforced. Next thing the guy new his free and clear house was going to be auctioned to pay the loan. He learned real quick that the obligation does not stop with the initial collateral. He somehow found the money. Our depositors were pleased we could give them their money back since that is where loan money comes from.

[westernrvparkow]

maillemaker wrote:

Not paying debts because you do not have the money is one thing, not paying them because you don't want to part with the money is far different.

Meh. The contract goes both ways for both parties. I pay, I keep the RV. I don't pay, they take the RV. Everyone is expected to uphold their end of the agreement - both sides. Businesses strategically cut losses all the time. People should, too.

That is no where close to "the deal" . Should you get repossessed, they lender will sue you for any deficiency and even if they write that off, they will send you a 1099 for the amount written off so the IRS can get their pound of flesh. You agreed to pay the money back, end of story.

[docsouce]

As stated here, there will be nothing left but dust on a frame when We're done with ours. We bought new so we would be protected with warranties on the big items. Maintenance and upkeep are my responsibility and I try to be meticulous. New gave us peace of mind. If I buy used, from a private party, pay big bucks, and the transmission falls out of it as I leave the sellers yard,the depreciation cost I saved goes to a new trans... That is just one thought.
As an aside... This was a banner year for RV sales. I wonder too how it will effect prices when these (and I believe there will be a lot of them) RV's are parked in the yard then dumped on the market "For the best reasonable offer".....after only having been used a few times.

[toedtoes]

maillemaker wrote:
There is something to be said for buying a 20-year-old RV for $7500. There is no depreciation at that point. 🙂

Steve

Yep! My clipper will not lose value unless I destroy it. It's worth the same as the clippers 5 years newer.

[maillemaker]

There is something to be said for buying a 20-year-old RV for $7500. There is no depreciation at that point. 🙂

Steve

[maillemaker]

Not paying debts because you do not have the money is one thing, not paying them because you don't want to part with the money is far different.

Meh. The contract goes both ways for both parties. I pay, I keep the RV. I don't pay, they take the RV. Everyone is expected to uphold their end of the agreement - both sides. Businesses strategically cut losses all the time. People should, too.

[maillemaker]

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.

I suspect this is precisely why commercial RV sellers sell RVs with low down payments and long payment terms. It keeps the resale value of used RVs high because owners can't afford to sell them. This makes the price delta between a 5 year-old RV and a new RV low so people just buy new ones.

Most people have zero savings at all let alone enough to pay cash for an RV. So they finance.

[johnwalkerpa1]

rseymour21 wrote:
Whew! Lots of great responses! Thanks Guys! I'll continue my research! Digging digging digging!

PS - I was looking at NADA recently and thought the same thing, seems high! Finding out actual sales is probably key!

Yes, they are always high. As an example, I recently looked mine up on NADA. It is 2015 model year 30' Class C and retail is currently showing MORE than what I paid for it in 2014. Not taking into account my down payment, just what the actual sale price was at the time.

There is no way on earth I could sell it for anything close to what NADA says. I'd guess I could realistically sell it for about $15K less than NADA now. But, I'm not selling 🙂

[IAMICHABOD]

whizbang wrote:

A lot of folks are poor shoppers and/or negotiators who pay too much for their rigs. Throw in some lousy financing and MOST Rv's less than seven years old are upside down.

This inflates the asking prices. Folks can't sell them for what they have into them.

Whatever you decide to get, there is no substitute for impeccable maintenance.

This is what I found when I was looking for my next RV,at about 5 years they were all upside down and wanted to much for them,just to get out of the payments.

Also as whizbang stated there is no substitute for impeccable maintenance. Those factors led me to a Former Rental.

I am happy with this decision as are 95 others that have responded to the Rental Thread.

[whizbang]

We either buy new, or darn old (fully depreciated).

A lot of folks are poor shoppers and/or negotiators who pay too much for their rigs. Throw in some lousy financing and MOST Rv's less than seven years old are upside down.

This inflates the asking prices. Folks can't sell them for what they have into them.

Whatever you decide to get, there is no substitute for impeccable maintenance.

[klutchdust]

Lumpty wrote:
It really is very simple math if some realism is applied, and ownership planned on long-term and not trading every few years for shiny-new-thing-i-tis.

I bought my small Class C new for $55k in cash back in 2011; it had a sticker of $78k. I expect to keep it for 12 years and somewhere between 90k and 100k miles. I'm halfway there now at 6+ years and 47k. Since I maintain it well, everything should work at that point, and I expect to be able to sell it for about $15k then. Basic math: $40k/12 = $3300 annual depreciation costs.

We think along the same lines. It is so very important to stay on top of maintenance and repair broken items. Like I have posted before, there isn't a trip that once I get home there isn't something that needs tightening, gluing or inspecting. I keep on top of it, keep a list going of supplies needed and repairs needed.

[Lumpty]

It really is very simple math if some realism is applied, and ownership planned on long-term and not trading every few years for shiny-new-thing-i-tis.

I bought my small Class C new for $55k in cash back in 2011; it had a sticker of $78k. I expect to keep it for 12 years and somewhere between 90k and 100k miles. I'm halfway there now at 6+ years and 47k. Since I maintain it well, everything should work at that point, and I expect to be able to sell it for about $15k then. Basic math: $40k/12 = $3300 annual depreciation costs.

[ppine]

thanks to T18skyguy for a very interesting post.

[westernrvparkow]

Savary Phil wrote:
It makes sense that the NADA values would be based on industry depreciation schedules, not actual sales. So...does anyone know how/where one could get info on actual sales?

Thanks all for the responses to my last post. I'm still digging as well!

That information does not exist in any practical form. Even if you found a sale of XYZ brand model ABC you would have no information on the terms of the sale or the options on the rig or the condition of that rig.