Used RV Depreciation – Factors, Rates, Method
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I’m sure by now that you’ve been doing some shopping online and have a good idea of how much you’re going to pay for a used RV vs a new RV. But knowing how much you’ll pay and knowing how much it’ll be worth later are two different things. Such research requires a bit of homework, or help from a professional. Here are two things to consider when purchasing an RV. Understanding how RVs lose value in the RV market, how RV’s resale appeal affects potential buyers, and what qualifies as a reasonable price in the used market can help you compare options.
When buying an RV or motorhome, one of the factors you consider is the initial price. Besides price and comparisons between various motorhomes, another factor that plays an essential role in the buying process is the RV depreciation method. This can vary by RV type and the condition of different recreational vehicles.
In this blog, we will talk about used RV depreciation, what may affect it, and possible ways to reduce the rate of your motorhome depreciation. The goal is to help you understand value over time and find the best value for your needs.
Depreciation
An RV is really no different from a car. The moment that you drive it off the lot, its value depreciates. For any of us who own a vehicle, we know that brand new cars have a higher resale value. Cars that have already been through one owner before you have a significantly lower resale value. These resale values plunge faster in the RV industry than in any other. This means that you shouldn’t enter into an RV purchase lightly. Be sure you know exactly what you want in your RV because trading it back in for an upgrade will hold a hefty penalty. This is why RVs lose value quickly at first, and why most RVs see the largest change in RV’s value during the first few years.
This shouldn’t deter you from a used RV investment, however, as many used RV’s last for a long time with owners who are quite pleased with their choice. Instead, this information should make you carefully consider whether a used RV or new RV will best suit your needs. If you’re uncertain, give us a call and we’ll help you determine what your desires and budget can procure for you. While not all RVs follow the same pattern, slow depreciation, durable build quality, and high demand models can help protect an RV’s value and improve RV’s resale results.
Class A RV Depreciation Rate
Many will agree that purchasing a new RV never makes financial sense. If you do, expect to lose from 20% to 30% of the purchase price when you drive it off the lot. For this and many other reasons, people consider used RVs in good shape. For class a motorhomes, the initial higher price can make early changes in RV’s value more noticeable, depending on the RV type.
How much do RVs depreciate? For those interested in class A RVs, you should know the following information regarding the depreciation rates:
- For a three-year-old RV: 26-27% depreciation
- For a five-year-old RV: 35% depreciation
- For a ten-year-old RV: 60% depreciation
Class B RV Depreciation Rate
The class B motorhomes usually include a slide to increase living space. If you plan to buy one, consider its associated depreciation rate. The specific RV type, mileage, and condition can affect how much value is retained:
- For a three-year-old RV: 33% depreciation
- For a five-year-old RV: 49% depreciation
- For a ten-year-old RV: 62% depreciation
Class C RV Depreciation Rate
Class C motorhomes come with a built-in cab to provide an extra front structure and seats. They rank among the most affordable RVs. Let’s review their depreciation rates. In many cases, they may offer a good deal and the best value for buyers comparing most motorhomes:
- For a three-year-old RV: 26-27% depreciation
- For a five-year-old RV: 37-38% depreciation
- For a ten-year-old RV: 51-52% depreciation
Fifth Wheel and Travel Trailer Depreciation Rates
Like most buyers, you probably wonder whether travel trailers and fifth wheelers depreciate the same as for Class A, B, and C models. Consider these facts you need to know. Their resale prices can also depend on market trends, seasonal demand, and whether they are properly maintained:
- For a three-year-old model: 25% depreciation
- For a five-year-old model: 37% depreciation
- For a ten-year-old model: 45% depreciation
Factors Affecting Used RV Depreciation
How fast do RVs depreciate? Well, it depends on several factors, including how many rv owners have used the vehicle, whether it has high mileage or low mileage, and how its perceived value influences the RV’s value:
- RV Model and Brand: Popular and quality brands depreciate slower than unpopular ones. Strong brands may help offset depreciation in the used market.
- Rental or Private Usage: RVs in private ownership depreciate slower than rental ones. A full time RVer may use a vehicle differently than private owners, and many RV owners prefer a unit with detailed records.
- Additional Accessories Installed: RVs with extra shelves or other accessories depreciate faster than those without. Poor maintenance, missing oil changes, or a lack of detailed records can lower an RV’s value.
Most RVs with completed minor repairs, regular deep cleaning, and a documented service history are more likely to retain their RV’s value.
Tips To Reduce the Rate of Your Depreciation on RV Used for Business
Calculating camper depreciation is easy—write down the initial store price, calculate the years you own the vehicle, and determine the correlating interest. Subtract the percentage from the initial cost, and you will have the depreciation rate.
The good thing is that you can do a few things to reduce the depreciation rate. Smart upkeep can protect your investment and help maintain value for long-term ownership:
- Keep the RV safe from heavy wind and rain
- Consider preventative and regular maintenance, including timely minor repairs
- Polish the motorhome to give it a fresh look. A deep cleaning can improve its condition before resale.
- Change the interior
- Keep the RV in storage
Warranty
Even if an RV is only a few months out of the factory, many manufacturers refuse to continue the warranty on for the second owner. If your seller insists that there was an extended warranty purchase, give the RV provider a call first to ensure that the warranty is transferable. If you ask, they may be willing to sell you an extended warranty as well for a moderate fee. Ensure that you have copies of the warranty purchase, however, so if something unforeseen pops up, you have proof. Never assume that just because your used RV is brand new, that it’s covered.
Using caution when you are purchasing a used RV will keep you out of a lot of trouble. Read our other posts on knowing how to look for water damage, and how to spot broken appliances to ensure that you are well prepared to go used RV hunting!
Call Us Today
If you decide to consider a used RV, look no further than Kirkland RV Sales. We will discuss used RV depreciation, and based on your needs and budget, will recommend the perfect vehicle.
Contact us today at (425) 318-7590 to get a free quote.
