Understanding RV Depreciation…
No matter what kind of an RV you talk about, they depreciate. Quite a lot actually. RVs with engines depreciate quicker because of the wear and tear of their motors. There are advantages to buying new – you get to pick out the features you want right up-front, no one else has lived in the RV, you get a manufacturer warranty and of course – it’s NEW! Used RV buyers can take advantage of depreciation on the unit, selecting from a wider variety of models covering a several years, lower cost of add-on options if they are already installed and often used RVs have very low mileage on them.
Whether buying new or used – depreciation is something you need to understand. The National Automotive Dealer Association (NADA) publishes the Manufacturer Suggested Retail Price (MSRP), Low resale and Average resale prices each year for almost all RVs. This gives us a quick gauge of the current value for a specific year and model of an RV. It is important when considering depreciation over time, that it is based off of MSRP. For example if average depreciation for a 5 year old RV is 3% that originally cost $100,000 then the depreciation for year 5 is $3,000 even though you may have purchased that RV used for $50,000 ( that makes it 6% depreciation on your used purchase price).
If you are buying new or used, depreciation is a real cost of ownership, just like buying gas and paying campground fees. When you sell or trade in your RV, depreciation becomes very real – especially if you are financing your purchase. Fortunately, very few purchase RVs at MSRP. Discounts from 20% to 30% (depending on the value of the motorhome) are common – check out some of the larger RV dealerships. Regardless, you can expect your RV to be worth about 50% of MSRP within 6 or 7 years. While that may frighten some, you have to remember that there are many other ways to keep your overall living costs at a reasonable level compared to a brick and stick home. This is a lifestyle choice that can provide exciting opportunities, and many want to understand what it takes to live this lifestyle. Depreciation is only one factor – but one that can’t be ignored. If you are looking at spending a couple of years or more touring the country RV full timing can be very attractive.
RVersOnline.Org has an article about general depreciation schedules for RVs in their Archives. It makes for good reading for those wishing to further understand the impact of depreciation.
More about RV Cost of Ownership – what we have found out – to be posted soon