Buying Used vs 35% Off New MSRP

I’d like to cover a few topics in this post. Buying used vs 35% off new MSRP and cost of depreciation. Also buying a brand of RV that has less chance of going out of business than another.

What got me to thinking about this topic had to do with someday knowing we would have to buy a new home and the money we would have left to do so. After I crunched all the numbers I believe I came up with a relatively accurate figure as to what money we will have left to buy a new home. Hate to already be thinking about an exit strategy but the plan would not be complete without it. Karen and I talked briefly a few months ago about what that left over money would buy in a house today. Not nearly what we live in now for sure; not that we are ever going back to the same lifestyle/house. We took a look at the current houses that are for sale to get an idea of what we could afford later – scary.  I might have to build one..

Let’s assume you get 35% off MSRP on a new $90,000 fifth wheel. The selling price would be about $58,500.  After five years that “$90,000” trailer could depreciate as much as 55% off original MSRP and might be sold for $40,500.  That is about $18,000 less than you paid for it.  So, it cost you $3,600 a year or $300 a month to own it – or worse.  Now consider if you bought a couple year old quality trailer of any brand(add an extended warranty) for maybe $46,800. Then sold it five years later for the same $40,500.  You spent just $6,300 or $105 a month over five years for ownership excluding taxes, insurance and added equipment. And assuming the used RV market is not saturated with used units the baby boomers are moving out of.

It goes without saying the fix for trailer depreciation is finding an exceptional deal to start with.  But I still stand by an earlier view about RV depreciation which is I’m not letting that stop us from buying one.

I’ve been studying the 2015 and newer models for some time now.  One of the problems are new floor plans and our attraction to them.  If we stay more flexible we might be able to save a ton on our upfront costs and leave more for a replacement trailer or a new sticks and bricks once we come off the road.  At least this is how it works for those of humble means.  Some of our favorite floor plans were offered back in 2016 but far fewer than I’d hoped for.  Lack of a certain floor plan could have an effect on what trailer makes it as the one we finally decide to purchase – if we decide to buy gently used.  I’ll be plugging the numbers into my spreadsheet to figure out the value of any specific used trailer. I’ll bet a used one would easily come out ahead of a new one for value if we can find the same floor plan.  And I’d be asking for a lot more than 35% off original MSRP to make the deal.

Redwood Interior – Rated with 8,000 pound axle capacity, H rated tires, extra large brakes, all solid wood cabinets with soft closing drawers.   RV gas/electric fridge is an option! The 340RL comes in at just 36’7″ in length and was first built in 2017. With over 4,000 pounds of remaining cargo capacity.

It was only a few years ago when several popular brands for full time RV living went out of business. Some had been around a long time. Some models were reinvented where the brand had been bought out by another company. Lifestyle Luxury RV comes to mind.  As does the original fifth wheel which is the Hitchhiker. The list goes on to include trailers built by Newmar and Peterson.  You and I have been studying fifth wheels for a few years now. Bet you would be less likely to buy one that is no longer in business or built!  And some people may not have even heard of a once great brand they now find eroding on a used trailer lot at a fraction of the price it once sold for. This brings up the risk of buying a model today that is out of business or discontinued tomorrow.  That already happened to my once favorite which was the Augusta Ambition, replaced by the Augusta Luxe Gold and it’s laminated construction.  Oh well, it was out of our price range anyway and yesterday there was only one used model I could find for sale in a floor plan we are not interested in.

And what about getting service advise when something breaks, especially if the company itself is out of business? All those who bought new Lifestyle Luxury fifth wheels were left with a useless warranty and a much stepper depreciation curve as the used price dropped considerably.

The Redwood is our number one favorite when compared to others in our budget range.  Although it’s not at the top in terms of value or when comparing what it costs for the features we want.  The Redwood came out in 2010. Per Redwood, they decided from the start to build a full time trailer for the baby boomer generation. Well, Redwood has gone through some changes. For the best I think. However, at least here in Missouri the baby boomer generation peeks out in 2020 and starts to decline as a percentage of the total population thereafter.  I’m thinking that is why RV companies have begun focusing on the next big generation of buyers which are the millennials. Heck even the Escapees RV Club started the Escapers RV Club to focus on that next younger (and larger) generation.  Wonder if the millennials will have the same disposable income to buy fancy new Redwoods years before retirement?  Maybe or maybe not. And that’s what is worrying me about our most current favorite trailer that’s in a price point higher than say a base priced Montana, Cedar Creek or Bighorn level trailer.

2018 Montana 3120RL at 35′ in length. With many features of a 40′ rear living room! Pantry, front facing washer/dryer closet, usable kitchen and bathroom. And over 4,000 pounds of cargo capacity. Unfortunately the floor plan is brand new. They made some needed changes in the 2018.5 version by the way.

Anyway, hope that gives you a few more things to think about when it comes time for you to buy an RV. The other day Karen said she thought we had found the trailer we were finally sold on. It’s a Montana 3120RL. Well, need I remind her we are not done until we buy one.  Things change, and deals might be out there that are too good to pass up. Being able to spot a good used one is a benefit of having studied these things for the past few years. Now I’m just hoping there are no new 2019 floor plans we are more interested in😊.  Believe it or not some of the 2019 Heartland models starting showing up and other brands will follow as soon as March of 2018.

Bighorn 3270RS at 35’2″ with over 3,000 pounds of cargo capacity.  This brand has and will be around for a long time. The Bighorn is Heartlands top selling luxury fifth wheels and among the top three selling luxury fifth wheel manufacturers.

Congratulations to a reader of this blog David who found a heck of a deal on a gently used 2016 Bighorn 3270RS. A trailer that has routinely been in the top five for us as well. That floor plan was still being offered in 2018. Go to the bottom of this comment section for the dialogue. Or maybe David will post something in this blog post comments about his success?

Next weekend is the local truck/car show. I hope to be back with a post about our tour soon. I’m also considering a post regarding RV friendly clothing and laundry concerns.

One final point you might be interesting in hacking apart. Right or wrong I’m leaning towards starting negotiations for new fifth wheels at 35% off the dealerships MSRP. And even more of a discount for last years models as a new unit.  And for new dually trucks, I’m going to take a swing at 22% off MSRP to include promotional savings. And I’ve started to lean towards shopping on the internet as a way to negotiate upfront before I walk on a sales lot.  More on that later I’m sure. (update 3/3/18 – I am researching the merits of negotiating for a new truck from invoice price rather than MSRP while keeping an eye on factory incentives so I don’t give the dealer any of that money. ) A friend just bought a completely loaded 2018 Ford F350 dually lariat at about 13% off MSRP. And he is a tough negotiator.

 

From blog reader Peter who mentioned a couple products you might consider for your new RV. Added RV fridge safety shutdown – ARP Controller prevents fridge fires; see arprv.com, material cost $175. Add soft starter for air-conditioning (ramps amps up slowly) for single A/C when boondocking, called EasyStart; see microair.net, material cost $300.