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Author Topic: Diesel Pusher Depreciation  (Read 714 times)

dgreene62

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Diesel Pusher Depreciation
« on: June 25, 2017, 01:17:24 PM »
Looking to purchase another DP in the next year. Trying to take my time, look at what's out there. I purchased a new lower end Coachmen Cross Country DP in 2002 then life with kids prevented us from going as much so I sold it. I fixed it it up with all the bells and whistles, like outdoor tv, motion satellite, ect... that I could and really had a great time. Now some 15 years later I'm pondering an early retirement and I'm feeling the itch again. Sometime in 2018 I think I'll be making the purchase unless I run across a deal I can't refuse. ;D   

I'm looking in the $100k-150k range. I can go higher to get the right thing, but definitely not over $200k because we will only be taking weekend trips with a few long trips per year to see our great country. My wife likes new and I'm again questioning NEW vs USED. I know the fact is that a 1-2 year old pre-owned coach will have had some of the kinks worked out and could really be a great deal.

This leads me to my question:
It seems every dealership will gladly discount the MSRP by 25-30%. In reading lots of these threads on the forums I see a lot of folks claiming that buying used is better because the buyer takes the hit on depreciation by another 25-40% after that 1st year. Really??? Is this 25-40% typically off the true selling price they paid for the new coach or is this 25-40% depreciation off the original MSRP???

Case in point: I've been looking at some 2016 Fleetwood Excursion 35B (love that floorplan). The MSRP was around $200-220k, putting most selling NEW around $150-165k. So looking at that coach now a year or more later considering further depreciation shouldn't this coach be in the $110-125k range, give or take a few$$$. I'm not seeing that rate of depreciation when looking online. Maybe it's the time of year - summer, but I'm seeing 2016 models still in the $140-150k range. I'm not sold on this make/model mind you, but it's one I've got my eye on. I'm seeing similar lacks of depreciation in other models as well. Someone please help me with my thinking on this.

If the DP are holding value that well then the case could be made that buying new may be better, right? Just would like some input from you guys.

Thanks in advance for the guidance and wisdom. 
« Last Edit: June 25, 2017, 04:56:59 PM by dgreene62 »

taoshum

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Re: Diesel Pusher Depreciation
« Reply #1 on: June 25, 2017, 06:45:01 PM »
You can check the Blue Book prices to see what prices are doing.  also pplmotohomes posts their prices for consignment rv's.
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docj

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Re: Diesel Pusher Depreciation
« Reply #2 on: June 25, 2017, 07:47:49 PM »
You can check the Blue Book prices to see what prices are doing.  also pplmotohomes posts their prices for consignment rv's.

PPL also posts their SOLD prices which may be more relevant than the advertised asking prices.
Sandie & Joel

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RedandSilver

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Re: Diesel Pusher Depreciation
« Reply #3 on: June 25, 2017, 08:58:51 PM »
Quote
If the DP are holding value that well then the case could be made that buying new may be better, right? Just would like some input from you guys.

Just remember that a MH is NOT like buying a car.  The quality control is so lacking in MH building compared to car building.
Many used MH's may have many of the problems already addressed compared to a new owner having to deal with them.

If money is the issue are you willing to look at a year or two older models to reduce the cost some.
Also then you might be able to find a private seller - which most of the time will be less money as they don't have to pay salesmen etc.
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grooving grandpa

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Re: Diesel Pusher Depreciation
« Reply #4 on: June 25, 2017, 09:29:45 PM »
I would personally buy used.  I bought a 2004 Winnebago Journey 36G in 2010 from a Dealer and feel I got a good deal. Very happy with it and do my preventive maintaince. Biggest thing I learned is to pay the 3500 or 4000 for a one year extended warranty. The previous owner may have turned it in because of a problems which he and nor the dealer did not disclose. The extended warranty would have been paid twice fold if I had it for one year. If nothing major goes wrong the 1st year you are should be clear of any problems that may have existed. It had a fuel injector "O" ring leaking oil into the gas. All 6 injector had to be replaced. That would have paid my extended warranty twice fold.

dgreene62

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Re: Diesel Pusher Depreciation
« Reply #5 on: June 26, 2017, 06:48:31 AM »
You can check the Blue Book prices to see what prices are doing.  also pplmotohomes posts their prices for consignment rv's.

PPL also posts their SOLD prices which may be more relevant than the advertised asking prices.

Good advice on pplmotorhomes. The "SOLD" prices seem to be more in line with the depreciation stated on the forum. I guess it comes down to what the seller will take rather than what they are asking.

Gary RV_Wizard

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Re: Diesel Pusher Depreciation
« Reply #6 on: June 26, 2017, 09:05:46 AM »
The discount and depreciation percentages you see bandied around the internet have no consistency. Some are rigorous enough to stipulate MSRP, while others may be vs advertised pricing (either above or below MSRP).  I've even seen some that included trade-in value as part of the "discount" price. That's not as off-the-wall as it sounds because dealers often quote a discount selling price but give a further discount in the form of an inflated trade-in value.

That said, I do not believe that there is anything like an additional 25%-40% after the first year depreciation from MSRP. At worst, the total depreciation at year two is maybe 40%, first & second tear combined.

One rule of thumb I've seen says that after the initial purchase, depreciation runs around 6%/year as an average for all RVs. That's 6% of the previous year market value, not 6% of MSRP each year.  I've not tried to verify that, but it seems like the right ball park. However, used RV values are a lot less consistent than the car market. Rvs can and do have a lot of price variation for local market conditions, popular models, condition, and seasonal demand.

I recently sold a 12 year old high end coach in excellent condition for about 33% of the original MSRP. If the original owner (not me) paid 80% of the MSRP, then depreciation took another 47% (aggregate). There are depreciation and amortization calculators on the internet if you want to reduce that to an average annual depreciation, but I don't think the number has much practical meaning.

Remind your wife that you are buying a house that happens to have wheels, not a car. Most people have a much different mind-set on houses, and rightly so. What is her position on buying new vs used houses? 
« Last Edit: June 26, 2017, 09:10:14 AM by Gary RV_Wizard »
Gary
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dgreene62

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Re: Diesel Pusher Depreciation
« Reply #7 on: June 26, 2017, 03:10:51 PM »
That said, I do not believe that there is anything like an additional 25%-40% after the first year depreciation from MSRP. At worst, the total depreciation at year two is maybe 40%, first & second tear combined.

One rule of thumb I've seen says that after the initial purchase, depreciation runs around 6%/year as an average for all RVs. That's 6% of the previous year market value, not 6% of MSRP each year. 

This is good input. To answer your question we have always built or purchased new houses. However, we are not full-timing so it truly will be "recreational" so I'm of the opinion this coach would sit in an enclosed storage facility 75% of the time. This is what has me thinking that used is the better route. We've done this on boats, motorcycles and golf carts simply because we aren't using them every day.

However, considering your 40% depreciation after 2 years scenario, if I can find a dealer discounting a new coach by 30% range of MSRP then taking a 10% depreciation in 2 years doesn't seem so nearly as bad. I still think the smart money is on used, I'm just not much of a handyman and don't want to spend all my time attempting to fix things or driving and leaving the coach to get it fixed. So I will need to really do my due diligence when it comes to purchasing.
« Last Edit: June 26, 2017, 04:45:30 PM by dgreene62 »

jackiemac

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Re: Diesel Pusher Depreciation
« Reply #8 on: June 26, 2017, 10:48:05 PM »
Also registration fees seem to be based on the msrp not what you paid for it. Just thought I'd mention it.
« Last Edit: June 26, 2017, 10:50:00 PM by jackiemac »
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dgreene62

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Re: Diesel Pusher Depreciation
« Reply #9 on: June 27, 2017, 06:10:27 AM »
Also registration fees seem to be based on the msrp not what you paid for it. Just thought I'd mention it.

Please explain what registration fees are. I'm not understanding.

docj

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Re: Diesel Pusher Depreciation
« Reply #10 on: June 27, 2017, 08:59:54 AM »
Please explain what registration fees are. I'm not understanding.

I think the term is intended to mean the fees paid at purchase in order to title it in a state.  But I'm not aware of ANY jurisdiction that basis its fees on MSRP and not the actual sales price.
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yolo

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Re: Diesel Pusher Depreciation
« Reply #11 on: June 27, 2017, 09:50:13 AM »
Oct 2012 bought a 40' Thor Tuscany MSRP ~250,000
Paid ~185,000 74% of MSRP
Sold March 2016 for 152,000 61% of MSRP or 82% of Paid price.


Probably typical numbers for most transactions.  The coach was in top condition when I sold it.  I had offers of 125,000 and 135,000 that I turned down.
Bill Bell -- SW Florida

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RedandSilver

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Re: Diesel Pusher Depreciation
« Reply #12 on: June 27, 2017, 09:54:53 AM »
Please explain what registration fees are. I'm not understanding.

In MI they did lookup the MSRP on my used coach and used that as a basis to calculate the registration fee which is
the piece of paper you have to show an officer if ever stopped - along with proof of insurance.  The registration in MI also
has the sticker tag that you put on the license plate to show you are current for that year.  It's a fee that is levied every year and
pro-rated some each year to a certain point and then levels out and goes no lower - about 10 years or so, I think.

Remember the less you spend - the less the sales tax will be too.  But registration fees are not effected by the sale price like sales tax is.
2002 Rexhall Rose Air  Cummins 8.3  350hp

UTTransplant

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Re: Diesel Pusher Depreciation
« Reply #13 on: June 27, 2017, 10:55:49 AM »
But registration fees are not effected by the sale price like sales tax is.
This may be true in Michigan, but it is not a universal truism. In Utah, for example, motorhome registration fee is 1% of the "fair market value of vehicles as established by the Tax Commission." I have no idea how the state determines the value, but I guess a standard depreciation table is applied since they probably want to go to the trouble of figuring it out for each model. This is the equivalent of a property tax, as they say on the UDOT website.

All this really goes to show your state of residence/domicile can make a big difference in the fees you pay.
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dgreene62

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Re: Diesel Pusher Depreciation
« Reply #14 on: June 27, 2017, 11:29:41 AM »
Aaah OK. I wasn't thinking DMV registration. lol  I'm in SC and DMV RV registration is only $24. Even sales tax in SC on any vehicle is only $300 no matter the price. Tags are like $30. What is a big hit year after year on everything in SC is property taxes. My county is appx .632% so on $150k (for example) the annual property tax would be $948. This goes down over time, but coupled with insurance premiums and typical DP maintenance it can get a little pricey each year. But it's a way of life here and it's on everything. So it's normal for us. 

Gary RV_Wizard

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Re: Diesel Pusher Depreciation
« Reply #15 on: June 27, 2017, 02:26:12 PM »
Quote
In Utah, for example, motorhome registration fee is 1% of the "fair market value of vehicles as established by the Tax Commission." I have no idea how the state determines the value, but I guess a standard depreciation table is applied since they probably want to go to the trouble of figuring it out for each model.

Right, and that's where the MSRP may come into play. Some states estimate FMV as a fixed depreciation from the MSRP, while some others just use a declining percentage of the MSRP as the basis for a property tax.   The tax basis varioes by state, so there is no single answer.  And of course, many states don't have a property tax on vehicles at all, so the question becomes moot.
Gary
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Gary RV_Wizard

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Re: Diesel Pusher Depreciation
« Reply #16 on: June 27, 2017, 02:37:57 PM »
Quote
I'm just not much of a handyman and don't want to spend all my time attempting to fix things or driving and leaving the coach to get it fixed.

We get that, but you are assuming "new" equates to "trouble-free' and nothing could be further from the truth with new RVs.  Long "hit lists" of repairs after delivery are all too common, whereas late model used rigs typically have had all the kinks resolved. Buying new gets you a warranty to pay for most of the repairs, but does nothing to relive you of the hassle.  Don't take these numbers as gospel, but something like 15% of new RVs will have numerous defects (like 25 or more), while another 15% will be mostly trouble-free. The rest are somewhere in the middle. Problems range anywhere from nuisance to cataclysmic.  It's not unusual to see reports that a new RV has spent a dozen or more weeks in the shop during its first year. A few spend much of their first year in shops, simple because RV dealer service is typically slow and low quality (not fixed right the first time).

That said, I think it makes sense to evaluate new vs used from a financial standpoint of your max horizon on "used" is only 2 years old. The dollar cost may indeed by close IF you can indeed get as much as 30% off on the models you like. That's not a given unless you are willing to travel the country to find the best price. Even then it may be hard to achieve with certain models.
Gary
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dgreene62

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Re: Diesel Pusher Depreciation
« Reply #17 on: June 27, 2017, 03:15:19 PM »
Good word, Gary. Definitely an exploration. I told my wife I'm not so sure I don't like researching and the art of the "hunt" for the right one (including organizing my storage compartments) almost as much as getting the RV and going. lol

jackiemac

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Re: Diesel Pusher Depreciation
« Reply #18 on: June 29, 2017, 05:24:09 PM »
Aaah OK. I wasn't thinking DMV registration. lol  I'm in SC and DMV RV registration is only $24. Even sales tax in SC on any vehicle is only $300 no matter the price. Tags are like $30. What is a big hit year after year on everything in SC is property taxes. My county is appx .632% so on $150k (for example) the annual property tax would be $948. This goes down over time, but coupled with insurance premiums and typical DP maintenance it can get a little pricey each year. But it's a way of life here and it's on everything. So it's normal for us.

Sorry been offline. Yes DMV registration fees we paid percentage of MSRP. Sorry for  confusion.
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RedandSilver

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Re: Diesel Pusher Depreciation
« Reply #19 on: June 29, 2017, 07:18:12 PM »
Aaah OK. I wasn't thinking DMV registration. lol  I'm in SC and DMV RV registration is only $24. Even sales tax in SC on any vehicle is only $300 no matter the price. Tags are like $30. What is a big hit year after year on everything in SC is property taxes. My county is appx .632% so on $150k (for example) the annual property tax would be $948. This goes down over time, but coupled with insurance premiums and typical DP maintenance it can get a little pricey each year. But it's a way of life here and it's on everything. So it's normal for us.
Man have you got it good.  If I moved to SC it would cut my tax bill nearly by of what I paid and still pay compared to the numbers
you listed above.   :o  Even your property taxes are way way less than what I pay.
2002 Rexhall Rose Air  Cummins 8.3  350hp

Gary RV_Wizard

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Re: Diesel Pusher Depreciation
« Reply #20 on: June 30, 2017, 10:41:43 AM »
Move to Florida. Tag fees well under $100 for most any coach and no property tax on vehicles.
Gary
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Kevin Means

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Re: Diesel Pusher Depreciation
« Reply #21 on: June 30, 2017, 11:30:09 AM »
OMG! Sales tax on our used diesel pusher here in California was just over $25,000.00 (sales tax is 8.75%)... Registration each year is about $1300.00... and San Diego regularly has some of the highest fuel prices in the country. But to quote dgreene62... "coupled with insurance premiums and typical DP maintenance it can get a little pricey each year. But it's a way of life here and it's on everything. So it's normal for us."

Kev
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