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Old 09-27-2017, 11:00 AM   #1
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Newbie shopping questions - depreciation, dealers, some models

We're still shopping and looking at floorplans. We're looking at traveling 50%+ of the time. These are my latest questions:

1. Depreciation of a new MH has been mentioned everywhere. What is the depreciation based on, the MRSP? I'm asking because there's really no reason to buy at MSRP. The heavily advertised dealer in TX is what.... 20% off? Our local dealer has many that are 30% off MSRP on a new MH. These are MH in the $130k-$290k MSRP range.

2. Is it wise to buy from a dealer not near your home base? There's the talk about that first year being a shake-down for little things. Is that something any dealer will handle? Asking because we know we will move across the country right after buying. We don't plan to return to current location...ever.

3. I will look in the mfg-specific forums for info, but so far we are looking at Georgetown XLs, Palazzos, and Sportcoach. The Palazzo and Sportscoach get me diesel (340 &360) for towing. After reading about the 5-Star Tune experiences, gas is considered.

4. As for considering used, I don't know yet. I looked at one DP with only 6k on it at the dealer. Great condition, but I got the feeling it was rented out or something. I definitely want something with a warranty. Used-car warranty is fine. I know I can get oil samples, inspections, etc. That stuff helps, but isn't a warranty from the seller. At a certain age, there's just too many things I don't want to mess with. Just like buying an old house.....might be taken care of, but the updating and big items are due. Don't want to schedule our first few years of traveling around re-roofing, re-paint, remodel, etc.

Please let me know what you think.
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Old 09-27-2017, 11:28 AM   #2
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I'll give you my 2 cents worth on #2. Whatever dealer you choose to buy from is your first source for warranty work. Right or wrong, the local dealer will work with his customers. You live 25 miles away, bought the coach 1500 miles away, you're going to end up last in line. That said, I wouldn't buy from a dealer with a bad reputation just because they're close. Shop wisely, if you go bottom dollar exclusively do it with your eyes open.
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Old 09-28-2017, 12:20 AM   #3
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Depreciation

We just went through the exercise/ordeal of buying a motorhome. In my research, I looked at the depreciated value over 5 years of several brands of coaches in the $350-500K range (MSRP new). The average depreciation (off MSRP) was 35% in the first year, %7 in year 2, and then 3-5% in each of the following years. So after 5 years the coach will be worth 50% of its MSRP. I used NADA for these numbers, and used the Low Retail figure. After reading tons of threads here in IRV2, I learned that if you trade in a coach, the dealer will offer you around 85% of the Low Retail value on a trade. So if you buy a $500K coach new, in 5 years its Low Retail value will be around $250K, and a dealer would offer you around $212K on a trade. So if you originally paid MSRP on the coach and traded it in 5 years later, you'd have lost 500-212=288.

Obviously, (1) nobody buys a motorhome for an investment, and (2) nobody pays retail. So if you originally got 25% off and bought that $500K coach for $375K, your depreciation loss would be only(!) 375-212=163. So you want to get the best deal possible when you buy, because every $1000 you save is $1000 less depreciation you absorb. If you sell the coach yourself at somewhere between Average Retail and Low Retail, you would reduce your loss.

You can also reduce your loss by buying used. Probably the sweet spot is a 2 or 3 year old coach -- still somewhat new and the original buyer has taken the big depreciation hit. Or a 8-10 year old coach which has pretty well hit bottom depreciation-wise. The trade off is that a coach that age will have higher maintenance costs.

I don't know if these depreciation percentages are applicable to coaches with MSRP lower than $350K, but I'd be surprised if they are significantly different.
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Old 09-28-2017, 05:12 AM   #4
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I've searched fir depreciatipn tables hereand found some very good ones.
You need to work from selling price not MSRP for true depreciation.
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Old 09-28-2017, 10:02 AM   #5
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I never paid much attention to depreciation. Whatever it is, it is. We were more concerned on getting the brand and floorplan that fit our needs. After trying other brands, we settled on Tiffin. It was partly because they had the floor plan we needed and a very good dealer was just 45 minutes away from our WI home. After having a few coaches, we knew what we wanted and ordered it. After four years, it is still our first choice because of so few problems and the convenience of have a quality and knowledgeable dealer so close. The models you mentioned are from what I consider 2nd tier brand. First tier would be Newmar, Tiffin and Fleetwood and above them would be Newell, Foretravel & Prevost conversions. There's nothing wrong with a 2nd tier MH if you have a good dealer and that's what you want. All of your questions are ones that only you know the answer to. No one knows your wants, needs or financial ability better than you. Keep searching and researching. When you step into the right one, you will know it. Good Luck
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Old 09-28-2017, 12:21 PM   #6
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Quote:
1. Depreciation of a new MH has been mentioned everywhere. What is the depreciation based on, the MRSP? I'm asking because there's really no reason to buy at MSRP. The heavily advertised dealer in TX is what.... 20% off? Our local dealer has many that are 30% off MSRP on a new MH. These are MH in the $130k-$290k MSRP range.
Not sure what difference it makes - the selling price of a used RV is what it is. In any general discussion about estimating depreciation, we would have to use MSRP as the reference because we have no idea what the actual selling price was on any given RV. So, yeah, the depreciated price of a one year old RV is stated relative to the MSRP of a new one and the percentage is therefore huge. However, it includes whatever [unknown] discount may have applied to the original sale.

The thing is, the dealer prices the used RV based on what he thinks he can sell it for. He doesn't start out with some fixed original selling price and apply a pre-determined depreciation percentage. If he thinks he can get somebody to pay more than the original MSRP, the "depreciation" might even become "appreciation". I've seen a few vintage rigs that sell for more now than they did when they were new, e.g. some classic Airstreams.

If you review the values in a price guide such as NADA RV Guide, you will see that the prices in that guide drop at around 6% per year after the first year (that number may be out-of-date - I haven't done it recently). The price for the first year will typically be around 25-30% below MSRP, reflecting the probable discount to the original buyer. The key is that the percentages are derived from selling prices, not the other way around.
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Old 09-29-2017, 05:43 PM   #7
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Thanks for explaining a few of those things.

We're still looking around. The more I look into the MFG-specific forums, the more I see the value of a good dealer with reasonable scheduling for service. Too many stories of waiting months for warranty service.

Again, thanks for the help.
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