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Old 01-29-2014, 04:59 PM   #15
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You've talked yourself into it! If you have the money to afford a new Essex, you obviously are better with money than I. One thing we can agree on, Newmar.
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Old 01-29-2014, 05:04 PM   #16
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I never came into the large sum of money she promised. Still waiting though.

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If you want to work more with depreciation estimates try these spreadsheets. http://www.myrv.us/pgs/rv/depreciation.htm

Or PM me for Madame LaRues phone number.
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Old 01-29-2014, 09:25 PM   #17
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Quote:
Originally Posted by UKGuy View Post
As long as you can afford to buy new, according to my math, despite the commonly held assumption, the depreciation on a new coach could be less than for a used one. How so? Admittedly, my sample size is very small and may not necessarily apply to other manufacturers and years. Anyway, here's what is found.

I used a Newmar Essex as my example (as that is what I am interested in) over a period of five years and NADA low retail less 10% for pricing.

Example One: A new coach
Current SRP $682k, possible dealer discount 25-30%, giving an actual cost of $477k-$511k. According to NADA, the low retail (-10%) after five years is $281K which is 47% of the SRP in 2009. So, assuming a value of 47% of todays SRP in 5 years time, that gives a value of $361K (still following me?) A depreciation in actual terms of $115k-$150k.

Example Two: A six year old Essex (2008)
NADA low retail (-10%) is $255k. So for the same five year period of ownership, the value of an eleven year old coach (2003) is $87k, again low NADA -10%. A depreciation of $168k.

In conclusion (for this example) it would appear that it is a myth that a new coach loses the most when it comes to depreciation. The true mathematicians and statisticians out there will no doubt drive a bus (no pun intended!) through my calculations, but I was surprised at the numbers. Anyone care to offer their opinion or even experience?

Andy.

In your scenario of new vs. used you have not accounted for the loss of use for 5 years of $222-256k($477-511k minus $255k). If that $222-256k had been invested in an S&P 500 index fund for the past 5 years, it would have doubled in value. So with the used purchase you could still be living large and have a quarter million in your pocket! Arguably, either one may well be difficult to sell by owner, but I'd much rather be trying to sell an $87k coach than a $361k coach. Good mental exercise for all of us!!
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Old 01-30-2014, 07:06 AM   #18
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Unfortunately you're whole logic is flawed because you are using NADAGuide for your residual value after 5 years but you are using MSRP - 25% as a purchase price. NADAGuide values are not based on actual sales; they are based on MSRP - yearly depreciation.

Using your logic, you could buy a brand new coach at the discounted price and then sell it 1 year later at the NADAGuides value for a profit! Unfortunately real life isn't like that and NADAGuides values are just not that accurate.
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Old 01-30-2014, 07:35 AM   #19
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Unfortunately you're whole logic is flawed because you are using NADAGuide for your residual value after 5 years but you are using MSRP - 25% as a purchase price. NADAGuide values are not based on actual sales; they are based on MSRP - yearly depreciation.

Using your logic, you could buy a brand new coach at the discounted price and then sell it 1 year later at the NADAGuides value for a profit! Unfortunately real life isn't like that and NADAGuides values are just not that accurate.
I will second this. Have been following and looking at the eBay sale prices and NADA guides and it seems as though they very weakly correlate.

2003 for $89k? Seriously?

You can lie with math when you pick the wrong numbers make it look legit. You can only fool yourself in the end.

I thought winter was buyers market.
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Old 01-30-2014, 07:58 AM   #20
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If I've got it right you're using the 2014 MSRP to compare against the NADA price for one that is 5 years old, instead of the MSRP of the 2009?
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Old 01-30-2014, 09:24 AM   #21
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Rule of thumb from a former RV sales guy - subtract $10K per year on average coaches - Fleetwood line for example. My coach at 5 years old = $125K-$50K= $75K
I hope at some point those numbers change because with your calculations my 2003 @ $89000 Retail -$110,000 for 11 years old = me paying someone $21,000
to take it home!!!!
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Old 01-30-2014, 09:58 AM   #22
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Here's our situation for our 09 Phaeton:

MSRP new $279k
Paid new $207k
current base low retail $144k
current total low retail $173k

So... $144k is 70% of $207k... meaning in 5 years we lost 30%. Yes, all RV's take a loss, but when I look back at the last 5 years it was well worth every penny!
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Old 01-30-2014, 11:26 AM   #23
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I would sure love to buy a couple dozen 2009 newell's for $199,000! lol

Jim
I'm with you, I'll take as many as possible. The ROI will be terrific!!
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Old 01-30-2014, 12:06 PM   #24
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I doubt NADA knows what the current market value of an Essex or a Revolution is.....

They do not track actual prices of sold units (like they do for autos), but instead just estimate a depreciation schedule, or so I understand.

However, they gain validity because many folks use their constructed values.
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Old 01-30-2014, 12:19 PM   #25
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Thumbs up

Thanks to everyone who has chipped in, the spreadsheet/calculator is especially useful. I am prepared to admit that I was wrong! The reason my logic was flawed appears as many have said, NADA pricing. It is just not reliable. I thought taking 10% of the low retail would be a reasonable assumption of a coaches saleable value. It just isn't has those who have bought (and unfortunately had to sell) have found out. What I take from all this is yes, you do take a larger hit when buying new rather than used, but as long as you negotiate a hefty discount, the actual hit can be minimised. However, you do get a new coach in exactly the spec you want AND a new bed! And finally, ignore NADA. A used coach is worth what you think it is and someone somewhere will sell at or near your price rather than the price in their head. By the way, I can't justify a new Essex as used in the example, it will more likely be a few years old. How old depends on my bartering skills and the desperation of the seller!

Thanks again for contributing, I for one found the discussion both informative and useful. Andy.
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Old 01-30-2014, 12:41 PM   #26
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the problem I thought I saw with a quick look but not detailed at your math. You appear to use MSRP - discount to come up with a fairly realistic purchase price when you purchased new. The rest of your calculations seemed to involve MSRP prices which at the beginning of your post you pointed out was not the realistic selling price. It appears you based your initial purchase price on a discount and then used that discount to make the depreciation appear smaller.
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Old 01-30-2014, 12:41 PM   #27
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I think it's safe to say that everyone that owns one has engaged in the exercise. Some have beaten it to death, and others not so much. It can get to the point that there is a continuing loop running in your head - make, model, year, floor plan, price, discount, deprecation past and future, and 100 other things. Where you arrive is at the place where you are comfortable with your wherewithal to purchase and what that will get you. This is the focus and place from which a real search for "the one" can begin. The thing to remember is that you did not go trough the objective reasoning and all that effort to be overcome by emotion. Stick with the objective, well reasoned conclusions, even if you have to let a few go by. Another one will be along shortly. And as a last resort, I can always put ya in touch with Madame LaRue.
Steve
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Old 01-30-2014, 12:48 PM   #28
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The more you use it the less the depreciation hurts. If it just sits around unused, you would be as well off if you had just fed those dollars to the birds.

Good luck and enjoy your rig when you get it!!
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