Flawed logic?

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short order cook

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We can afford motorhome priced up to $2500,000. We are looking for 2014 to 2019 build Tiffin. If we were to purchase one for $150,000 I figure that 5 years later it would lose about $35,000 in value. If we were to splurge and buy one for $250,000 I figure the same $35,000 loss in value. So, with this logic why not buy nicer one?
 
short order cook said:
We can afford motorhome priced up to $2500,000. We are looking for 2014 to 2019 build Tiffin. If we were to purchase one for $150,000 I figure that 5 years later it would lose about $35,000 in value. If we were to splurge and buy one for $250,000 I figure the same $35,000 loss in value. So, with this logic why not buy nicer one?
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RVs are not investments. No one, not even you can predict the future.
 
I would generally agree with your line of thinking that, assuming the same make/model, two motorhomes of different years will roughly lose a similar value over time. That said, I think the loss over five years will be much greater than $35,000. For example, RV Trader currently shows 2019 Phaetons (42') with asking prices around $269,000. A 2014 Phaeton (also 42') is around $175,000. As of today's date for the same motorhomes, NADA shows the 2019 "Average Retail" at $227,950 and the 2014 at $178,850. Of course, these are just rough numbers as there are many variables (condition, mileage, current market price, etc.) to consider. A rough number I use for class-A motorhomes is a value reduction of $15,000 per year. So in five years, I would expect the value to be reduced by $75,000. It must be stated that this is just my opinion and, as they say, your mileage will vary.
 
Likely the more expensive, newer one will lose more value over 5 years. Assuming this is an elective purchase for travel and leisure and the more expensive rig is within budget, you may want to assign a heavy weight to preference and comfort in your decision making. Also, make sure to factor in any deferred or time-based maintenance on the older rig.
 
In my experience it seems the depreciation curve on used motorhomes flattens out considerably when they hit the 13 to 14 year age mark, this is likely due to the fact that few lenders will finance a motorhome over 12 years of age, this therefore greatly reduces the pool of potential buyers. There also tends to be a significant price drop between the 12 year mark and the 13-14 year mark, due to this same factor.
 
SRSnure said:
I would generally agree with your line of thinking that, assuming the same make/model, two motorhomes of different years will roughly lose a similar value over time. That said, I think the loss over five years will be much greater than $35,000. For example, RV Trader currently shows 2019 Phaetons (42') with asking prices around $269,000. A 2014 Phaeton (also 42') is around $175,000. As of today's date for the same motorhomes, NADA shows the 2019 "Average Retail" at $227,950 and the 2014 at $178,850. Of course, these are just rough numbers as there are many variables (condition, mileage, current market price, etc.) to consider. A rough number I use for class-A motorhomes is a value reduction of $15,000 per year. So in five years, I would expect the value to be reduced by $75,000. It must be stated that this is just my opinion and, as they say, your mileage will vary.
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That’s more realistic.
 
Typical depreciation for motorhomes tends to be between 10% and 15% of the retail value each year. The first year could be either more or less than that depending on the price paid as compared to the average retail value. Since each buyer must negotiate the price of their purchase, actual prices paid vary greatly and the first year depreciation will be from the actual purchase price to the average retail price for it one year later. To estimate yours, take the current retail price and multiply by .9 for each year. Keep in mind that if you pay $150k the fires year depreciation will be about $15k and the second year would be $$13.5k of depreciation, $12,150 and so on. As value declines so too does the annual depreciation. Of course all of that is only an estimate as many factors can change things.
 
I think $35k over 5 years is very optimistic estimate. But I do kinda agree that you may as well buy a more upscale model if the budget permits. In other words, buy the Allegro Bus rather than the Phaeton. It's not just fancier - it also is built with better materials and often more capable components. Assuming you maintain it well, you should get good value when you sell or trade. But if you don't, you have more to lose.
 
You don't buy an RV of any vintage for the resale value,,or to wear it on your sleeve,,you buy for the satisfaction it will bring over time,, the time decided by you and the use decided by you.. If the unit is poorly made,, or poorly maintained,, that "time" frame will be shortened and disappointing and probably leave a bad taste in your mouth for a much longer time..>>>Dan ( 50 years and still doing it)
 
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I agree, it is not about how much money you paid, instead it is about which one will do the job. I only paid $22,500 for my 2002 Safari Trek 28 ft coach back in 2016, and have put maybe $2,000-$2,500 per year into it in maintenance, repair and upgrades, so have perhaps $40,000 sank into it now, thanks to inflation, etc. I could probably sell it for around the $22,500 I paid, maybe even a bit more, as the same model with similar mileage was selling for over $34,000 during covid. I could sell some stock, reduce my retirement savings and go out and buy a $500,000 diesel pusher with cash, but I have yet to see one that I would get more satisfaction from than I do with my Trek, of course if I did I might also be paying for a divorce attorney.
 
I've never worried about resale value of any kind of vehicle. Buy em used (I like 5 or 6 yrs old), maintain and keep them until the repair costs outweigh their value/usefulness (I like 20-30 yrs old), and sell for whatever you can get.
 
short order cook said:
with this logic why not buy nicer one?
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Lost opportunity. What could the additional $100K go to/be doing for you? RV's are strictly entertainment, even those that full time and account for the cost as their primary residence are losing their arses on them. Unless the model you pick based on the back end miraculously coincides with the very unit that has the amenities/features you want I guess that can be a winner. In my view the one you pick and have to live with for some period of years had better be the one you really like, irrespective of potential residual value.

Mark B.
Albuquerque, NM
 
I agree with your logic. Like Gary said, the costlier one will be better built and will have more features (Think stacked washer/drier vs none or a combo unit, dishwasher, bath and a half, etc.) Assuming same vintage and assuming you take care of it, the two will likely depreciate about the same.
 
If you are buying for investment, you are buying the wrong item. Purchase the RV that YOU like, that makes YOU happy, and that fits YOUR lifestyle. Use it, enjoy it, get your money's worth out of it.

Assume, when you part with the camper, it has no value at all any more. The VALUE was your usage of it!

There is no guarantee what the future will hold. It's all a matter of what people are willing to pay at the time.

If electric vehicle continue to gain popularity, who knows??? gas stations as we know them today might be non-existent 5 years from now. You'll never sell the motor home then.

So, if purchasing an RV, you purchase it for your present use, your present enjoyment, and your present pleasure, building memories, and using it as transportation and lodging to explore as you travel. THAT should be your primary focus. Not what are you going to get out of it when you sell it.


Which do you like better if the money is no object, .... the $125,000 model or the $225,000 model? Which fits YOUR camping - lifestyle the best..... that's the one you purchase .... forget about the next guy! Use the camper for YOU!
 
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