Depreciation on investment

[Ericpa3]

A dear friend and neighbor owns a Class A Motorhome. He was my mentor, having taught me about trailers when I was a brand newbie. He wants to upgrade to a Holiday Rambler motorhome that will last 10 years (his words) -- his coach is about 4 years old now and in need of routine, expensive maintenance.

Using the Blue Book, his motorhome depreciated $10,000 (yes, that's thousands) from December 31 2006 to January 1 2007.

Having recently sold our 2004 Casita SD for every penny we paid for it, I feel we are unbelievably fortunate, and made a very wise investment.

Happy New Year.

Eric

[Gina D.]

If properly maintained and not abused, our trailers will be worth what we paid when we go to sell, at least (If you bought used)

I am curious about depreciation from folks that bought new and sold later. Anyone?

[Karalyn]

I owned my Scamp 16 ft (yr 2000) for a year (bought it used in 2005) and sold it in 2006. I did add a screen door, and a rear window that slides open. I bought it for $7800 and sold it for $8000. I figure I lost a couple of hundred from things I added to it, but was well pleased with the sale.

[Roger H]

This is a topic I have a little experience with, having bought and sold nearly a dozen trailers over the past three years...

As a rule of thumb, the more the trailer cost new, the more depreciation you'll take over the first three to five years. After the value reaches about half of it's new value, it will remain static or depreciate slowly. Eventually as the cost of new replacement trailers climbs, eventually if the trailer is maintained well, it has the potential to appreciate.

Market demand and trailer supply has a lot to do with it. It really is worth while to get the best deal you can for an in-demand trailer because you'll get it back out when you sell it. It's sort of like buying the junkiest house in the best neighborhood. On the other hand, if you get a real steal on a stickie that there's a bazillion of, and nobody else wants one 'cause they're junk, you might as well kiss your money goodbye because although it may have a "book" value, there's no demand for them, and no one will want it. Any fiberglass trailer under $8k will pretty much return full value on sale if it's in good condition and you market it right. The better the condition of the trailer, and the less you can get it for, the more likely you'll actually make money on it at the time of sale.

Fiberglass trailers and Airstreams are about the only fairly common trailers out there right now that have some kind of guaranteed return on your money spent over time.

Roger

[Donna D.]

There's a whole bunch of smart member's on FiberglassRV who realize their molded lightweight fiberglass trailers don't depreciate at the horrible rate of other types of trailers....if at all. In fact, I know of at least one instance that the trailer sold for THOUSANDS more than it cost brand new. This is a prime example of what can be done tastefully to add value to ones trailer. Stock fiberglass trailers bring less return than one that has been improved with quality parts and quality/professional modifications, beside adding a bunch to creature comforts.

Does anyone know what a 1972 Boler cost brand new??? When this trailer sold on eBay a bit more than a year ago...it went for somewhere between $7,000 and $8,000. It was totally owner modified with quality stuff and it shows in this picture. I kept the picture, so I can dream "what if."

[Ericpa3]

Roger,

do you think your comments hold true for any fiberglass trailer -- specifically, the resale value of Bigfoot compared to Scamp or Casita? The reason I ask is that when I posted my Casita for sale, I had about 16 calls & e-mails in 24 hours. I had folks lined up to buy it, based on my description and photo, sight unseen. When I looked for a BF, I found a few for sale. They seemed to last longer on the market. Timing? Market idiosyncracy? Area of the country? or a difference because of higher BF price or other factors?

Eric

[Roger H]

It's conjecture, of course, but I think there are two reasons Bigfoots tend to stay on the market a little longer; first they're more expensive units. A new '07 25' lists over $40k. The 175 lists over $30k, so used ones are priced significantly higher than the other FG trailers. Pretty much anything under $8k will bring a ton of calls. Above $8k sells, but there are fewer calls because there aren't many folks who have that kind of cash liquid.

The other issue is that they're significantly heavier because of their construction and require a little more tow vehicle than the average Scamp or Casita. The lighter trailers sell quickly to first-time buyers, but the Bigfoot market is often long-time Scamp and Casita owners who want more space or amenities and are willing to tow the extra weight. The buyer's circle is smaller. And, there aren't as many Bigfoot trailers out there as there are Scamps, Casitas, Burros and the rest.

There's also a regional component to this. Casitas are easier to find in the South. Scamps are plentiful in the Midwest, and Bigfoot is king in the Pacific Northwest and western Canada.

Just my humble opinion...

Roger

[lynneh]

I am curious about depreciation from folks that bought new and sold later. Anyone?

We have a rough idea, Gina. We are the 2nd owners of our new-to-us 2005 standard model Scamp 5th wheel. We paid $11,800. Based on the model and extra features that were added, we can guess that this trailer originally cost between $14,000 - $15,000. So this first owner lost some value, but not too much. He keep the trailer in PRISTINE condition and that definitely helped retain the value.

--Lynne

[Brian B-P]

...When this trailer sold on eBay a bit more than a year ago...it went for somewhere between $7,000 and $8,000...

Ah, the famous Moguland Boler, a.k.a. Mogulboler, as featured in [b]Interiors.

The interior (and other mods) in this yacht-like masterpiece cost more than the trailer did to start.

I've noticed people don't bother to do this level of work to a stick-built trailer...

[Brian B-P]

I met someone in a campground in B.C. who recognized our Boler B1700RGH, and said that he had seriously considered buying one new, in 1979 (plus or minus a year). I don't remember exactly what he said it cost, but it was roughly $7000. I didn't pay that much for mine (which needed work), but the asking price for examples of this model in very good condition is about that same $7000 now, and I have seen asking prices up to $9000.

Not to put too much of a damper on everyone's enthusiasm, but we should remember that a 1979 dollar was worth a lot more than a 2007 dollar.

[Pete Dumbleton]

Keep in mind that there are two general types of depreciation -- I'll call them economic and physical -- In the first few years of anything with a model year, the depreciation is likely going to be economic and in the later years it will be physical -- Take it off the lot and the market value drops sharply in the first few minutes.

Recently, of course, the trend towards smaller RVs ( and the resulting fuel economy), plus the Scamp fire, has affected the prices of relatively newer used models -- However, it is clear that physical depreciation is far less in molded fiberglass trailers than in other kinds of RV (with the possible exception of the Toyota-based mini-motorhomes, esp the Sunrader with fiberglass camper body, of course) because they just don't deteriorate as much as standard stickbuilt RVs.

[Frederick L. Simson]

Not to put too much of a damper on everyone's enthusiasm, but we should remember that a 1979 dollar was worth a lot more than a 2007 dollar.

I found This calculator for inflation adjustment.
It only goes up to 2005...

My Fiber Stream sold for [b]$4995.00 when it was new in 1978.
That is [b]$15,219.42 in 2005 dollars.

[Brian B-P]

Excellent find, Frederick. For my Boler, the answer is...
What cost $7000 in 1979 would cost $19822.04 in 2005.
This makes current moulded fiberglass trailers look reasonably priced, as I would expect. It also provides some perspective for the value of a used trailer: while a quarter-century-old trailer probably needs work and is not as nice as a new one, it sells for much less than a new one... it really has depreciated to less than half of its original value.

The calculator Frederick found is for the United States, it provides a link to a Canadian inflation calculator, from the Bank of Canada. From that calculator...
What cost $7000 in 1979 would cost $18,458.42 in 2006.
Same conclusions!