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Old 08-21-2017, 01:40 PM   #1
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Depreciation-Who decides

I am curious who is the authority on depreciation. I look at my 2002 American Eagle. New it was nearly 300k on the sticker. Now it appears it is worth in the 50-70k range. Yet, it appears inside and outside nearly like it did when new. So why do RVs take such a large hit? Who makes the call on 10% depreciation per year for the first 10 years? Obviously some RVs are abused, but some are not.

Is NADA the authority? Supply and Demand?

I have a 2000 Jeep Wrangler that I bought new for roughly 20K. I can sell it for nearly 10K right now. Why is the jeep holding it's value more than a RV?

Just sayin.

J
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Old 08-21-2017, 01:44 PM   #2
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Quote:
Originally Posted by Jake21 View Post
I am curious who is the authority on depreciation. I look at my 2002 American Eagle. New it was nearly 300k on the sticker. Now it appears it is worth in the 50-70k range. Yet, it appears inside and outside nearly like it did when new. So why do RVs take such a large hit? Who makes the call on 10% depreciation per year for the first 10 years? Obviously some RVs are abused, but some are not.

Is NADA the authority? Supply and Demand?

I have a 2000 Jeep Wrangler that I bought new for roughly 20K. I can sell it for nearly 10K right now. Why is the jeep holding it's value more than a RV?

Just sayin.

J
The market decides. NADA and others report. Supply, demand, etc.
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Old 08-21-2017, 01:48 PM   #3
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Quote:
I am curious who is the authority on depreciation.
The buyer...
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Old 08-21-2017, 01:49 PM   #4
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The Market Decides

Buyer's set depreciation. If there are less of something or they are in greater demand the price stays higher.
If they are an unnecessary or luxury purchase the market again sets prices. With the flood of new MHs on the market used coaches have taken quite a beating.
My theory anyway.
And I still paid too much for mine but it was the one the wife wanted.
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Old 08-21-2017, 01:50 PM   #5
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The value of anything is only what someone will pay. The printed figures are only guesses. If you ask too much you narrow your marketability and may not sell. If you ask to little the market widens dramatically and you sell fast but don't get as much return. Actual "depreciation" is somewhere in the middle and only you can decide if it is an acceptable number or choose not to sell it.
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Old 08-21-2017, 01:55 PM   #6
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The jeep is desireable to a lot of different age groups 16-80 years old since they haven't changed in the last 30 years,your motorhome which inside probably is older looking doesn't appeal to a lot of different age groups
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Old 08-21-2017, 02:10 PM   #7
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Watch Barrett Jackson and see how car prices go. This will help to understand market pressures.
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Old 08-21-2017, 02:24 PM   #8
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.... Who makes the call on 10% depreciation per year for the first 10 years? ....Just sayin.

No one pays MSRP so in my research I assume about 75%. That would mean your coach sold for around 240k (still a lot of money). If it sells for just under 70K it depreciated less than 5% per year if I did the math right. The answer to the question is still the same...... buyer.

Almost everyone thinks their MH is worth more than it is. I've seen many MH's that were priced a little high and still on the market after a year.
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Old 08-21-2017, 02:31 PM   #9
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Depreciation is based on value which is based on supply and demand. The accounting definition of fair market value is "The amount a willing buyer will pay a willing seller." If you ever watch car auctions you can see how crazy the numbers can be. One car that you would expect to be a six figure car goes for $20,000 and another one that you would expect to be a cheapie goes for big money. No rhyme or reason sometimes.

Older motorhomes are burdened with a rapidly changing market where electronics, bling, and features have moved very quickly. That creates an obsolescence factor in short order. Your Jeep hasn't changed much in decades so its value stays high. Most folks, myself included, look upon a Jeep as being "Cool" so we are willing to pay more for them.
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Old 08-21-2017, 02:42 PM   #10
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There is a large segment of the luxury buying population that only buys new. They are in the market for a motorhome, but not a used motorhome, removing them from the demand for a used motorhome. And when it's time to "upgrade", they dump the old one, further driving down used prices. Luxury items have larger depreciation; Cadillac versus Chevy versus Hyundai.
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Old 08-21-2017, 02:43 PM   #11
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The market ultimately decides what a RV is worth. Just watch the adds for 5-7 year old units. You can always tell the people who bought them new or paid retail from a dealer, their prices are always way above what the unit will ever sell for on the private market.
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Old 08-21-2017, 02:43 PM   #12
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Depreciation is based on value which is based on supply and demand. The accounting definition of fair market value is "The amount a willing buyer will pay a willing seller." If you ever watch car auctions you can see how crazy the numbers can be. One car that you would expect to be a six figure car goes for $20,000 and another one that you would expect to be a cheapie goes for big money. No rhyme or reason sometimes.

Older motorhomes are burdened with a rapidly changing market where electronics, bling, and features have moved very quickly. That creates an obsolescence factor in short order. Your Jeep hasn't changed much in decades so its value stays high. Most folks, myself included, look upon a Jeep as being "Cool" so we are willing to pay more for them.


I will say that when looking at a new 2017 American Dream, I was impressed what roughly 300K buys today compared to mid 200K in 2002.

And yes, jeeps are cool. ;-)
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Old 08-21-2017, 03:21 PM   #13
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Another thing that drives down the price of an older RV is that most banks and credit unions won't loan on an RV over 10 years old. That narrows your buyers to cash purchasers. My credit union won't loan money on an RV over 7 years old.
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Old 08-21-2017, 03:37 PM   #14
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Also based on jobs and economy. I watched ours on Craigslist go down by half over four months. His last ad said if it doesn't sell this weekend it goes to eBay auctions. I bought it then in 2011 and now it's worth a lot less than that.
On a nice quiet day you can hear them depreciate.
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