The world of depreciation

The RV search continues.

While a house, even in these sub-prime fiasco times, can generally be considered an investment, something that gains value with time, a recreational vehicle is basically a study in depreciation. Most people understand that their shiny new car loses 15 to 20 percent of its value as soon as it leaves the dealer’s lot. And that car loses more and more value over the life of the loan (assuming you financed it and didn’t pay cash), usually four to five years.

But while you may be upside-down on your auto loan in the beginning, things usually straighten out a couple of years in, and you can often break even (or even make a small sum, if you’ve pampered your car) if you sell it or trade it in. And when your loan term is up, your 5-year-old car is still worth a decent amount.

RVs are another beast. Two factors are at work here:

1) Many RVs cost as much as a luxury car. Some cost as much as a home. Or more.

Small motorhomes start at about $50,000. Larger coaches quickly soar up into six digits.

2) RV loan terms usually run 10-20 years.

Even with a hefty down payment, the monthly payment on an RV would be out of reach for most people with an auto-like term of 60 months. So terms are extended to 10, 12, 15 or even 20 years.

If you bought an RV, financed it for 15 years, at the end of the term, you’ve probably used it very little (average RV use is 27 days per year, according to rversonline.org), and yet it has lost tremendous value. You’ve spent approximately 13.5 months in it, and yet you’ve paid on it for 144 months. But despite the minimal use, the resale prospects are grim. No one wants to pay much for a 15-year-old RV unless it was top-of-the-line to begin with and has been meticulously maintained.

All of this is discouraging to those of us who would like to actually purchase an RV. It’s not an investment. It’s a money pit. At best, it’s an expensive toy.

So, at the end of the spreadsheets and the research, you have to turn into a toddler, with your hands over your ears, screaming, “LA LA LA, I’m GOING TO BUY AN RV!” And you ignore the figures. You say to yourself, “Pshaw, I will defy statistics and use my RV every month of the year.” (And yet the left side of your brain makes sure to buy an RV cover.)

If we were more patient people, we could squirrel away our money until we could pay cash for the RV we want. And yet…patience be damned! I want it now

P.S. The 2008 Lazy Daze 27′ model seen at the top of the post will run you the no-haggle price of $79,250. No discounts are available.

—Bellapoison