I spent countless hours studying RV depreciation. I looked at all types of RVs at different price points in locations around the world, and now I want to geek out with you on RV value numbers. Let’s begin.
Understanding RV Depreciation Makes Good Financial Sense
We all know RVs lose value over time, just like automobiles. But just how much and which RVs lose value over time takes some research. To help you know which RVs are good buys, I analyzed over 200 different RV purchases and their depreciation over time. To confirm my findings, I compared the data with RVTrader and the RV blue book values in NadaGuides by the National Automobile Dealers Association.
Let’s Start With the Conclusions
I don’t claim that what I’ve put together here is perfect. But if you’re a money nerd and want to know for certain whether or not your RV deal is a good financial decision, this can help.
Conclusion #1: Buying a new RV never makes FINANCIAL sense. Ever. ‘
You can expect to lose approximately 21% of the RV purchase price the instant you drive it off the lot. There are loads of exceptions to that which we’ll discuss later, but that’s the average.
To be clear, I don’t necessarily think it’s foolish to buy a new RV. It’s just that you have to make the decision for reasons other than the financial reasons. Many RV buyers want to customize the RV to their tastes or want it to feel clean and fresh and new–and are willing to sacrifice depreciation for that. For some RV buyers, you’ve saved your whole life to do this and so it’s more about the experience than the money. Nothing wrong with that if you have the money to blow. Not everything has to be a financial decision.
Conclusion #2: The best bang for your buck in terms of RV depreciation is to buy an RV that is 5 years old, with medium use.
Five years is the plateau point at which the steep depreciation rate of the first few years levels off significantly.
I don’t recommend an RV that has seen little use because they are very likely to have problems. Suppose an older person buys a motorhome and then his health declines. He keeps it in storage for two years, and that’s when problems start. Maybe some water was left in the hot water heater for eight months before he got it winterized? What about the slides which haven’t been greased in two years and have been left to bake in the sun in a storage unit? Or perhaps a tiny little crack in the ceiling went unnoticed until water damage made it obvious? You get the point.
Conclusion #3: Depreciation on motorhomes is much more closely tied to the year of the motorhome and NOT the mileage.
Mileage plays only a tiny roll in the depreciation schedule for an RV because most RVs die of failures other than the driving portion of the vehicle. Gas RVs can easily run 200,000 miles, but rarely last that long before getting significant water damage, etc.
Conclusion #4: About 85% of all new RV buyers pay significantly more for their RV than they should.
Most RV manufacturers set the MSRP 30% higher than their realistic purchase price. I’m not immune to this. I paid too much for my first travel trailer. The MSRP was $28,000 and I talked them down to $25,000. I thought I was really hot stuff.
Later, I checked RVTrader.com and found that other dealerships around the country were selling the same travel trailer new for $5,000 less. If I’d known this, I could have driven to another state to buy, or I could have used that as ammunition during the sales transaction. Lesson learned.
Conclusion #5: The RV depreciation schedules of a Class A are almost identical to a Class C. Both depreciate at nearly identical percentage rates.
However, several RV sales people reported to me that used Class C motorhomes tend to sell much faster than used Class As. This is likely because they come at a lower price point to entice potential travel trailer buyers.
Conclusion #6: The rate of RV depreciation between a fifth wheel and a travel trailer are also similar.
The luxury high end fifth wheels are an exception, and depreciate a little quicker.
Class A Motorhome Depreciation Rates
Here is my average depreciation schedule for Class A motorhomes. I determined how motorhomes depreciate over time after reviewing purchases made by 51 Class A motorhome buyers.
- At one year old, this number is tough to determine. Many buyers traded in their RVs to a dealership at the end of one year to get something different. As a result, some dealerships pay sellers a high amount for their trade, then crank up the price on the replacement to compensate for the loss. This number is nearly impossible to accurately calculate, but 21% depreciation is my best guess.
- At two years old: expect 22% depreciation. There isn’t much of an RV depreciation difference between a one year old and a two year old unit. Maybe because they still smell new at this point. Also, RV manufacturers typically refer to last year’s models by the current calendar year. For example, a unit made in 2018 that sat on a dealer lot until its sale in 2019 would be called a 2019 unit. As a result, it’s tough to know how much use an RV actually had when it’s listed as being two years old.
- Three years old: expect 26.7% depreciation. This means 26.7% of the RV price you paid while new is now gone.
- Four years old: 30.27% depreciation
- Five years old: 35.98% depreciation
- Six years old: 39.54% depreciation
- Seven years old: 41.15% depreciation
- Eight years old: 43.16% depreciation
- Ten years old: 60% depreciation. Here’s where the RV depreciation rate gets serious. Perhaps 10 years old sounds much older than 9 years old to potential buyers.
- Thirteen years old: 69% depreciation
- Fifteen years old: 76% depreciation
- Twenty years old: 86% depreciation
- Twenty-Nine years old: 96% depreciation
- Thirty years and older: Basically hovers at about $2,000 because a used motorhome value still exists as long as it drives
Class C Motorhome Depreciation Rates
The depreciation curve on a Class C motorhome is not nearly as severe as that of a class A. Mainly because new Class C motorhomes cost significantly less.
- At one year old: Similar to a Class A, this number is tough to determine. I discovered that many buyers traded in their RVs to a dealership at the end of one year to get something different. Some dealerships will pay a seller high amounts on a trade-in, then crank up the price on the replacement. This number is nearly impossible to accurately calculate. My best guess is around 21% depreciation–the same as on a Class A.
- Two years old: 22% depreciation. Just like with motorhomes, there isn’t much of a difference between a one year old Class C RV and a two year old Class C RV.
- Three years old: 26.6% depreciation. This means 26.7% of the price you paid new is now gone.
- Four years old – 28.4% depreciation. Class C depreciation is better than a Class A at this point, but only by two percentage points.
- Five years old: 37.6% depreciation. Oddly, a five year old Class C depreciation is worse than a Class A RV depreciation by two points.
- Six years old: 39.54% depreciation.
- Seven years old: 40% depreciation
- Eight years old: 44% depreciation
- Ten years old: 51.69% depreciation
- Thirteen years old: 64% depreciation
- Fifteen years old: 69% depreciation
- Twenty years old: 83% depreciation
- Thirty years and older depreciation. The value on a “vintage” Class C hovers at about $3,000. Remember, even old RVs still have value if it’s roadworthy.
Travel Trailer And Fifth Wheel Depreciation Rates
You may be wondering if a travel trailer and a fifth wheel depreciate the same. I analyzed their used values separately by looking at dozens of purchases, which gave me the average depreciation on travel trailers and fifth wheels. As a result, the depreciation schedule for travel trailers and fifth wheels is within the margin of error, making them nearly identical.
There’s just one main difference between travel trailer / fifth wheel depreciation and that of a motorhome: travel trailers and fifth wheels hold their value more steadily between 5 and15 years. Motorhome depreciation begins leveling off at 5 years, but not as much as a trailer.
- At one year old, about 21% of the value is gone. This happens as soon as the RV leaves the lot.
- Two years old: there’s no significant difference from year one. Since model years are announced a year in advance, this strategy boosts resale value of a two year old trailer because potential buyers see it as one year old.
- Three years old: 25% depreciation. This means 26.7% of the price you paid new is now gone.
- Four years old: 29% depreciation. At this age, towable depreciation rates are still better than a Class A, by two percentage points.
- Five years old: 37% depreciation. This is slightly worse than a Class A depreciation rate by two points.
- Six years old: 38% depreciation.
- Seven years old: 38% depreciation.
- Eight years old: 40% depreciation.
- Ten years old: 45% depreciation.
- Fifteen years old: 72% depreciation.
- Twenty years and older: depreciation hovers between $3,000 and $5,000. Trailer depreciation rate at this age depends on how well it was maintained. Towable RVs generally don’t last as long as motorhomes because they are built with less expensive materials. In general, less care goes into maintaining them when old.
You Can Avoid RV Sales Rip Offs
I looked at these numbers for days, And I am amazed at how many people fall into RV sales rip off traps. In my analysis, it appears that 85% of RV buyers paid significantly for the same RV another buyer got for $5,000 less. When buying an new or used RV from a dealership, don’t do anything until you read my guide for getting a good deal on your RV.
I am Tony, an RV designer and RV developer. I create bill of materials for RV manufacturers for travel trailers and fifth wheels. I worked as a freelance transportation consultant for Lyft. As an RV development consultant, I create customization trees for RV manufacturers who want to offer a solution to prospective customers to design their custom RV with variant configuration. Apart from this, I sell in Indiana trailer hitches, hitch balls, goosenecks and weight distribution systems where I provide advice to customers who want to know which is their towing capacity, which hitch ball should they utilize and how to deploy a weight distribution system. I do my best to explain all these processes and their installation, in the Lifestyle edition of Business Finance News.