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Buying Your First RV, RV buying tips, RV Camping Tips, RV Cost, RV Depreciation, RV Tips, Save Money
The process of purchasing a new RV can be extremely exciting, except when it comes time to sign the financing papers. However, it is important to realize that the minute we drive our new ride off the sales lot, it has already depreciated. In this article, I will discuss depreciation and some of the things you should be aware of, and some possible ways to mitigate the amount of depreciation.
The first staggering fact is that a new RV depreciates an average of 30% immediately upon being sold. Therefore, if you spend $100,000 on a new RV and decide to sell it privately immediately, it may only be worth $70,000, truly a sobering fact! Also on average, a new RV will have lost half of its value after 6 years of ownership. Bear in mind that both these figures include all types and sizes of RV, from pop-up trailer to Class A diesel. So, while buying a new RV allows the purchaser to seek out the latest in offerings, floor plans, and technology for those who can afford it, one must also consider the financial impact.
The best way to avoid the impact of depreciation is to let somebody else deal with it. In other words, buy your RV used. Based on the averages above, if you purchase an RV that is at least five years old, the depreciation has slowed considerably. In this case, you will never end up owing more than the unit is worth, providing you pay fair market value (FMV) for the coach.
The trade-off in buying used is likely to be more value for the money vs. new, as well as better return on investment. While purchasing new may give you the ability to factory order certain options, floor plans, colors, etc., there is a good chance you will find a used RV that suits you if you have the patience to look at several units, both at dealerships and through private sales, before you make your decision. Our current RV is almost 15 years old, and we like it more than many of the brand-new units we see. As a matter of fact, I like it better than any of the new Class A diesel pushers we sell at our dealership.
Maintenance is also a factor in depreciation, so make sure to perform all recommended maintenance on your RV. Maintenance is always important, as it keeps your coach in good shape and free of things like water intrusion. Once your RV has suffered water damage, not only is it very difficult to sell, especially at FMV, but it is also extremely expensive to fix. Failure to fix issues like this just propagates the deterioration of the coach, and eventually not only is it not worth anything but also it can be almost impossible to live in it and may even be dangerous.
Regular wear and tear is already factored into depreciation, as it is a “fact of life” for any vehicle. Contrary to what you might think though, a well-used RV is likely to be worth one that just sits around, assuming the overall condition is comparable. Idle RVs have the potential for higher failure rates of things like hoses, mechanical components, and the like.
There is a possible financial upside to older RVs as well. In certain cases, an old RV may actually appreciate in value. For instance, I once parked beside a beautifully restored GMC motorhome, which would have been 1970’s or 1980’s vintage. The red exterior shone in the sun and there was not a scratch on it. In speaking to the owner, he told me that the unit used to belong to actor Paul Newman. The fact that the coach was an in-demand brand (GMC), was in immaculate condition (at least on the outside), and belonged to a celebrity is likely to have boosted the resale value of the unit significantly, even over time!
So if you find yourself in a position of purchasing a new or new-to-you RV, it is important to consider the financial implications beyond the sticker price.
About the author: Steve Froese
Steve Froese, an avid RV owner, traveler, and Coach-Net member since 2013, is the principal of “A Word to the Wise Technical Communications”, a published RV author, certified RV technician, and licensed Professional Engineer. He frequently collaborates with the “RV Doctor”, Gary Bunzer, and has worked with the RVIA/RVDA as a technical and training writer and consultant. Professionally, he works as a quality engineer and musician. Watch for more of Steve’s work in upcoming Coach-Net publications.
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Whether you are contemplating purchasing your first RV or are in the midst of upgrading, it is helpful to go through the process of evaluating which is the right RV for you. This is especially true given the large number of choices available. In this two-part article, I will provide some advice for those wanting to make more educated choices.
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