Depreciation from New

[lizibit]

Good evening funsters. With the cost of used motorhomes so high due to demand, do you think that buying new means value shouldn't dip as much within a year as it would have traditionally?

 

[Pablotti]

We ordered our (yet to arrive) 2022 Burstner for £73k, a month or two before they put their prices up. To order the same van now it’s over £80k, and it’s pushed up the prices of those that are only a year or so old.

I recently saw the same model for sale, but a 2021 on the previous ducato base, with one owner for £72k…. About the same as new.

I’m rambling on, but my point is that depreciation changed due to dealers inflating new prices. No doubt linked to a lack of supply too.

 

[lizibit]

If buying and selling in a short space of time, the market shouldn't have changed much, so any temporary hike will still have an influence. I'd buy a popular model. If something is offered at a discount, it may be that it's been difficult to sell at the original price and you may experience the same when you part company.
Be prepared to like it so much that you don't sell-on so quickly, though.

I know that is a risk to want to keep it, but decided to try to buy in France, registering to in-laws there and selling after the trip to release the capital again. We have no sensible parking for one where we currently live in London

 

[lizibit]

I doubt it, it's the punter who's stung not the dealer unless, as I said, you sell privately. For me if the van is for a single extended trip I'd hire. A few grand is a lot less than 10's of thousands and the same said few grand is probably less than what you'd lose reselling.

It's a 6.5 month trip and initial costs were coming in well over £20k. So think if we buy sensibly, it should easily still be the most economic option on a £40kish MH

 

[lizibit]

All this discussion has focused around the buying and selling costs but nobody has mentioned the 'opportunity cost' of the capital invested.

What could you have made from the capital sunk in the MH?

This varies considerably whether you invest £50K or £100K, at say 4%, plus any capital growth.

Gets even worse if one has to borrow the capital to invest in the MH.

Geoff

Thanks. Yes I'm an asset manager (physical not financial unfortunately, but the same principles apply) so get this added dynamic but thankfully I have the cash. I'm sure I'd get a bit for investing with the way things are heading, but this career break is way more important.

^{_{Subscribers  do not see these advertisements}}

 

[lizibit]

I think that’s because the OP or anyone has the capital to purchase the asset, then it’s the depreciation of that asset over x period of time. 17 years ago I paid £30k for a vehicle today I will get £25 k for it. Therefore on that lump of cash the vehicle has devalued by £5k

Now labour and materials could be added, I could work out what interest I have lost but neither of these are depreciation.

Exactly - that level of thinking is enough for this and what I was aiming at. You are lucky to have bought back then, but will of course be hit on any replacement if you proceeded now

 

[lizibit]

When my elder son and his wife were planning to hire a m/h at eyewatering cost for a 3 months European tour in 2018 I decided to buy a s/h one for him as I reckoned that the depreciation would probably be less than the rental.
He chose and I paid for an Eldiss Autoquest for £18k and built a trailer for £60 for his 3 wheeled scooter. They covered 4800 faultless miles from their home at Worthing to Denmark, Poland and down to Italy and back through France. They had a fantastic time and we sold it privately a fortnight after they returned for 3 grand more than I paid and made a £180 profit on the trailer.
They enjoyed it so much that the following year they bought a one year old Chausson Welcome which they've used during the pandemic for several tours of the Dales, Scotland and the Lake District.

View attachment 582740

Lovely story! Their appetite was truly whet. Nowadays I expect both purchase and rental costs have increased, so still should be the better option for a 6 monther

 

[Coolcats]

Exactly - that level of thinking is enough for this and what I was aiming at. You are lucky to have bought back then, but will of course be hit on any replacement if you proceeded now

Yup that vehicle is not a Motorhome but I reckon you won’t go far wrong, in how you are buying and selling, the other thought when I have when doing this type of purchase is if not now then when it’s only money and the experience and enjoyment you get from doing these things is invaluable. Hope all goes well with your plans and you have an amazing time.

 

[lizibit]

Thanks all for your very helpful input. Definitely keeping the upper search filter firmly limited at a few years old

 

[ronecc1]

Thanks. I only want to buy and sell again within the year as this is for a specific trip. Was thinking that looking at the current prices of a 2-3 year old van, may as well buy new as it shouldn't depreciate too much.

Don't forget the 20% vat on the vehicle. A dealer will knock that off straight away, unless he is desperate to buy it

^{_{Subscribers  do not see these advertisements}}

 

[Coastal Cruiser.]

You'll lose 20% off the price of a new van the minute they give you the keys.

Don’t think that applies in todays market.
Bought my van from a German dealer in October 2020, he has the same van as mine 6 months older with the same mileage for £10k more than I paid him new!!

 

[funflair]

I just want to expand on my own post above as I was under a time pressure when posting it.

My own experience might illustrate my point about 'opportunity cost'

I bought our N&B Arto 69 privately in 2009 at 6 years old for £27,500, which with extras would have cost new about £60,000

I therefore had approx. £30K available to invest, compared with being tied up in a new MH.

For most of the time I have owned the Arto I have had a lot of that £30K invested in a corporate bond yielding 6.15% tax-free in an ISA, plus other investments. The bond was repaid last week and I will not get the same yield now.

Not everybody is in a position to do what I did, but I just give it as an illustration of how one should look at tying up capital in a new-buy versus a good second-hand, and take that into consideration along with aspects of deprecation.



As an adjunct, my advise would always be to buy a s/h high-quality MH at about 5-6 years as the depreciation will largely have been taken off and will not depreciate much further. In addition the running costs on high-quality are less - ours have been minimal in 13 years.

Geoff

I am sure there is a lot of sense in what you are saying Geoff, no there isn't a BUT coming

I was just looking at the price of a new vans last week and commenting that ours had gone up X thousand £ and we were saying that we bought at the right time BUT I then worked out that if we had left the money we spent invested in your corporate bond for example we would have made what the van has gone up by so effectively it would cost us the same. Of course if we had kept the Flair it could well be worth more now than two years ago and we would have made enough interest to buy new car, but all that sounds very boring really

 

[MacroMad]

I bought a 9 year old Autotrail with about 19k on the clock, sold it four years later with 28k on the clock and got 2.5k more for it.
I did'nt add any extras.