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Old 10-19-2015, 08:55 PM   #1
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Default Class B RV Depreciation Perspective

I have owned my share of cars over the years and have never owned a pre-owned vehicle. I have usually rationalized in my mind if I get 10 years of use out of a car, I feel I got my monies worth.

I've seen many owners on this site upgrade / trade their RVs pretty 'fluidly'. Many Class A RVers I have spoke to have said they have to hold on to what they have because the depreciation hit is so great.

Others have said "Buy your last RV first" and they purchase a $250K+ diesel pusher and intend to get 200K miles out of it and hold onto it for a while.

Based on the 2016 Winnebago ERA refresh, a 4x4 ERA 70 X with all the options will be about $150K out the door. This is starting to approach starting Class A money.

Does the Class B resale market work under a different set of rules? Is depreciation less and demand greater?
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Old 10-19-2015, 10:01 PM   #2
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How do you figure? The Era starts at $120k plus the 4x4 option of around $8k. There are a few options you could get that might add another $2k. So $130k tops MSRP.

The actual trading prices are 75-80%. So you are looking at $97,500-104,000. Granted, it's still not cheap, and there are Class A's out there for that kind of money.

But to answer your question, depending on which model you get, time of year, etc., they do have their own set of rules. I've found the depreciation to be minimal. Also, you can probably get more for a newish B selling it yourself than trading it off, but it takes time and patience, and some luck.
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Old 10-19-2015, 10:16 PM   #3
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I have motorcycles- it is amazing how owners often refer to their stuff as an "investment- or a new part or chrome geegaw as an investment.

it is an expenditure.

and the money goes away and never comes back


i think that some owners consider their B worth gold and wonderful- but my experience last year showed that a B sitting on the market for months- and displaying to the seller what the insurance value is- lead to a reasonable exchange.

because the B is an RV and not a daily driver ( for most) it will not suffer the daily wear and tear and dings- so a 10 year old B is probably in better shape than a car.

so it may not depreciate as quickly but it will.

and I would expect more efficient vehicles will hasten the decline of less efficient- both in use of space, energy and features.

buy the best you can, don;t go into debt.



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Old 10-19-2015, 11:47 PM   #4
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How do you figure? The Era starts at $120k plus the 4x4 option of around $8k. There are a few options you could get that might add another $2k. So $130k tops MSRP.
Maybe I should have been more clear - Out the Door usually includes everything - including taxes

Options from WGO Build Sheet
  • 4x4 Option - $11116
  • Better Inverter - 2000 watt $700
  • Additional Solar Panel - $400
  • Blindsight Detection / collision Avoidance Option - $1000
  • Alcoa Wheels - $2149
  • Optional Cabinet (70X) -$400
  • Infotainment - $1600
  • Dealer Prep - $1000

$138365

CA Bay Area Tax Rate 10%

$152201

I'm hoping to get between 10-15% factory order discount - not sure if a new product will result in a nice discount.
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Old 10-20-2015, 12:45 AM   #5
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Holy crap! 10%? Where I live the tax is 6% up to a cap of $300. Yes, $300!

Interesting those prices. You may be paying more because of your dealer/where you live.
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Old 10-20-2015, 03:40 AM   #6
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Holy crap! 10%?....

Most of Arizona is about 9.25%.

state tax and municipal taxes are collected...the "cool" part is that many of these dealers do not have to pay all those taxes to the kitty, but may keep a portion as an incentive to be on one side or the other of a boundary line.

AZ doesn;t collect taxes on private party sales on used vehicles ...so a "saving" to the buyer there.

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Old 10-23-2015, 02:07 AM   #7
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Here in TX, they want their 6.25% cut, so that $110,000 ERA is going to be about 120k for me. For 4WD... I'd say it is worth it, just because of the added ground clearance.
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Old 10-23-2015, 12:30 PM   #8
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Kiss 13% tax on the purchase price goodbye here. Yup, 13% on any vehicle you register in your name.

Depreciation is very real. You can minimize it by not overpaying for the RV in the first place. Some models seem to escape the worst of it. I think early Travato owners will be in that group. Price inflation on the new and improved Travatos would go a long way in offsetting depreciation on the old units is what I'm thinking. That's what happened with the early Views & Navions from what I observed.

People tend to forget the value of the lost opportunity on the money expended. $120,000 earning a 4% dividend would pay you $400 per month. The new $120,000 RV in the driveway might depreciate at the rate of $1,000 per month initially. Factor in the cost of interest if you don't pay cash.

Sprinter Class B's in general have fared well if asking prices on used units are accurate. I do see some units listed and relisted more than once in used RV ads though. Owners appear to be more interested in getting their price than selling the unit.

I look at what the same model asking price is when it is two or three years older. On one 7 year old unit I was interested in (several listed at similar price) the 10 year old units asking prices (again, several examples) indicated that the depreciation hit was still going to be $7,000 per year until year 10. Too much for me to consider.
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Old 10-23-2015, 01:14 PM   #9
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Yep. Everything has a price. There are upsides to have a new unit that can offset the depreciation costs, as well as downsides.

Sometimes buying an older unit is just cost shifting, not cost savings. Trading upfront cost for repairs and modernization/upgrade costs later.

So you have to assess your appetite for risk, as well as peace of mind. So far I've had very good fortune on the cost front.

It will be interesting to see if these Etreks and Eco Treks are going to suffer depreciation above or below the norm. Not sure the market has had enough time to digest the info yet.
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Old 10-23-2015, 02:04 PM   #10
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Sometimes buying an older unit is just cost shifting, not cost savings. Trading upfront cost for repairs and modernization/upgrade costs later.
I honestly don't think that that statement is true. As a statistical statement, it is ALWAYS cheaper to buy used. The "drive it off the lot" depreciation is just so high that no amount of repair cost will ever cancel it out. Of course, it is only a statistical statement, so any individual can get lucky. Don't count on it, though.

"Upgrades" are perhaps an exception. But, that isn't really the same thing, since you are ADDING to the vehicle, not simply maintaining it. There can be no general statement about this, since there is no limit on how much one can spend on upgrades.

I am not arguing against buying new--that is what we do. But the arguments for doing so are not economic.
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Old 10-23-2015, 04:17 PM   #11
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...with an older vehicle there is the benefit of hindsight.

with the newer models mentioned above- there are a lot of "what-ifs"...

what if the entire line is recalled by the manufacturer because they cheated on certification.
what if they don;t hold up to the weight of the conversion
what if they are full of new technology which hasn;t been fully bug-proofed.
what if the coach builder closes, making them orphans.


so we each try to do the best we can given our circumstances.

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Old 10-23-2015, 07:47 PM   #12
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On my first two Bs both bought new with about 126,000 miles driving over 9 years my depreciation averaged out at about $2,700 per year. Buying new gives you greater choice and flexibility to get what you really want unless you have a specific used model you want and have the time to wait for one to come along.
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Old 10-23-2015, 08:10 PM   #13
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Most large RV manufacturers have around a 25% margin not taking into account dealer incentives. The best time to buy is when the new model years begin showing up on lots and the dealers are itching to get rid of the now "old" units. Then you can purchase at 25% and even more off of MSRP. Drive it for a year and list it for sale. Then go back to the dealers and use the same strategy.
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Old 10-23-2015, 08:10 PM   #14
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Opportunity cost applies to time, health, and relationships as well. As a Boglehead, sometimes that’s difficult for me to remember. If we avoid leverage in favor of paying cash or maxing out our retirement accounts, we’d be trading years of travel adventures with our young family. So go ahead and take the depreciation hit if it makes sense to you. Only you can weigh the tradeoffs.
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Old 10-23-2015, 08:44 PM   #15
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On my first two Bs both bought new with about 126,000 miles driving over 9 years my depreciation averaged out at about $2,700 per year. Buying new gives you greater choice and flexibility to get what you really want unless you have a specific used model you want and have the time to wait for one to come along.
That's pretty amazing given that you sold the GWV to dealer.

The 23% you got off the Pleasure-Way price was a great start. http://www.classbforum.com/forums/f5...html#post10884

You probably got a great deal on the GWV also because it was nearly a factory direct sale.

I did OK on RV's #1 & #3 but took a beating on #2. I had 2 RV's in the driveway and no one seemed to want it. I way overpaid for it and got a bit less for it than it was probably worth. Lesson learned.
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Old 10-23-2015, 09:01 PM   #16
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My Great West Van was not factory direct. It was on order from the dealer and I went to the factory to confirm whether I wanted it and circumvent someone else beating me out. I negotiated only with the dealer. I sold it last year back to the dealer. It is still for sale so in hindsight I am glad I took what I thought was a loss for convenience. Maybe Great West Vans demise was not good for business.
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Old 10-24-2015, 01:52 PM   #17
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For units on the lot there is always a minimum of 20% room in the price and the ordered units can be purchased for the same. Dealers want to sell whats on the lot because flooring costs cut into their profits, so they nail the people who order with higher profit markup because they can, and the fallacy of ordered units cost more is just that, a fallacy, they cost less because there is no flooring. Depending on the volume of the dealer, current cash flow, availability of the specific unit, time of year, time on lot (flooring) and the intensity of the waging tail of the customer determines the selling price of the unit. I sold RV's for a few years. My advice is to play local competitors against each other or take a trip for the best price. There are nice honest dealers out there, just like politicians, you have to really search for them.
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Old 10-24-2015, 03:23 PM   #18
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For units on the lot there is always a minimum of 20% room in the price and the ordered units can be purchased for the same. Dealers want to sell whats on the lot because flooring costs cut into their profits, so they nail the people who order with higher profit markup because they can, and the fallacy of ordered units cost more is just that, a fallacy, they cost less because there is no flooring. Depending on the volume of the dealer, current cash flow, availability of the specific unit, time of year, time on lot (flooring) and the intensity of the waging tail of the customer determines the selling price of the unit. I sold RV's for a few years. My advice is to play local competitors against each other or take a trip for the best price. There are nice honest dealers out there, just like politicians, you have to really search for them.
I was with you until you said that.
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Old 10-24-2015, 04:36 PM   #19
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Honest politicians and virgin prostitutes, you just have to search for them...
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