Buying a new RV feels like making a wish come true. Your new road machine gets you where you want to go, and it gives you the freedom others only dream about. But purchasing an RV does come with a downside that you’ll have to face when you’re ready to sell your rig: depreciation. Like cars, trucks, and other automobiles, RV value goes down over time.
In this article, we’ll break down the specifics of RV depreciation and give you some tips on how to prevent losing money on your investment.
What is depreciation?
Depreciation is the amount of value an asset loses over the course of you owning it. It’s a phenomenon not unique to recreational vehicles— cars, trucks, motorcycles, and boats are all known for their depreciation. In general, some of the biggest factors are time itself and wear and tear.
RVs lose their value relatively quickly, at a steep rate of depreciation. Let’s take a closer look at how and why RVs lose their value.
What is the depreciation rate for RVs?
According to J.D. Power, depreciation rates vary based on several factors from RV type to the specific brand. In general, however, you can expect to lose 20% the moment you drive your RV off the dealer’s lot. That’s not a number to be ignored!
RV Value Depreciation Factors
Here are some of the most important factors that play into your RV value.
Your RV value over time will largely depend on what type of RV you have. Class A motorhomes, Class C motorhomes, and fifth wheels have the highest depreciation rates. It’s safe to say that the larger your rig is, the more quickly it will depreciate. For instance:
- Class A rigs lose 30% of their value after only three years of ownership.
- Class C RVs lose about 38% of their value after five years.
- Fifth wheels lose 45% of their value after five years of ownership.
If you’re looking to recoup your money in a few years, smaller RVs like travel trailers hold onto their value a little better.
This one should be a no-brainer, but the condition that your RV is in has an effect on its value. An RV that has been well maintained and cleaned will be worth much more than one that is barely puttering down the road.
Similarly, the condition and age of the appliances and technology affect your RV’s resale value. For example, a yellowed refrigerator and outdated microwave might turn a buyer away while nice stainless appliances may draw one in.
When buying a used RV, people look for names that they know and trust. This means that name brands hold their value a little better than a relatively unknown brand. Iconic names like Airstream, Winnebago, and Jayco typically sell faster on the used market.
How can you prevent RV depreciation?
Luckily, there are some ways to fight RV depreciation. By following these tips, you can slow the rate of depreciation and lessen the loss when it comes time to sell.
Take Care of Your RV
The biggest rule of thumb is to simply take care of your RV. Keep up with both the mechanics and aesthetics of your rig. Implement a strict maintenance schedule and take care of any problems whenever they arise. It’s also good practice to keep detailed records of your maintenance. Not only will it help you keep track of everything, but it serves as proof to any buyer down the road.
Not sure where to start with maintenance? Watch the video above from Long Long Honeymoon about the five keys to keeping up with your RV.
Buy Used Instead of New
RV depreciation is steepest in the first five years. When you buy an RV used, you not only get a better deal upfront, but you get to enjoy a slower rate of depreciation. Remember how we said that an RV loses around 20% of its value the minute it drives off the lot? That means you can find RVs out there that are only a few years old, still in great condition, for thousands less than if you purchased new.
If you purchase an older model, simple renovations can actually increase the value!
Rent Out Your RV
One of the ways to fight depreciation is to put your RV to work for you and rent it out. Why should it sit on a storage lot for nine-tenths of a year when it could actually be earning money while helping to pay off the loan?
While renting your RV won’t slow the rate of depreciation, it will generate income. This will combat any losses that you’ll face when you sell. The other rental solution is to not buy and instead to rent an RV for your travels. You’ll get the comforts you want while following your dreams, and you’ll never have to worry about depreciation.
Hit the Road
RVs lose their value, but it’s important to remember that the memories made with them never do. Even if you don’t make all your money back when you sell, most RVers will agree that they are well worth it. You can’t put a price on the fun to be had exploring the great outdoors.