Depreciation and Damage: How RV Value Plummets With Wear and Tear (2024)

Depreciation and Damage: How RV Value Plummets With Wear and Tear (1)

As time goes by and you use your RV more and more, like all vehicles, it will depreciate in value. As unfortunate as this is, our beloved rigs will become less and less desirable to others looking to purchase a used RV. Toss in a few dents and necessary repairs, and its value goes down even more. If you’re holding onto yours, depreciation only becomes an issue when the repair bills start coming in. Eventually, you’ll have what’s known as a junk RV.

What Is RV Depreciation?

All vehicles and trailers will begin to depreciate the very second they are taken off of the dealership’s lot. While we purchase them to be used, each minute and mile will detract from their value. However, unlike passenger vehicles, RVs typically take the road less traveled, and that road can be a damage-causing path. Dents, dings, and neglected repairs will cause RVs to depreciate faster. Depreciation is how much value an RV loses as time goes by.

What Factors Affect RV Depreciation?

Several factors can affect how quickly or slowly an RV depreciates. Some can be controlled, while others are completely out of your hands. With this in mind, recreational vehicles should never be seen as a financial investment. The more you use them, the quicker they’ll lose value. The purchase of an RV is an investment in adventure. So, what factors will affect RV depreciation?

  • Age – How old an RV is plays a big part in its depreciation. All things being equal, older ones will have lost more value than newer ones. RVs over 10 years old will have lost significantly more than a rig only a year or two old.
  • Mileage – With each click of the odometer, an RV will lose value, and this is especially true for the owners of older rigs who are looking to sell them. High-mileage RVs tend to have more mechanical problems, which lowers their value.
  • Condition – RVs that have been meticulously kept and given lots of TLC will depreciate a bit slower than those that haven’t. Noticeable cosmetic damage is the kiss of death when it comes to a rig’s resale value.
  • Popularity – An RV’s brand and model do play a part in how quickly they depreciate. Brands like Winnebago and Airstream will depreciate at slower rates as these two are known for being sturdy and long-lasting.

How Fast Do RVs Depreciate?

If your intention is to hold onto your rig until its wheels fall off, depreciation rates aren’t of that much importance. However, for those looking to sell theirs and upgrade, knowing when the selling sweet spot is can help them maximize profit.

  • First-year – After a year of use, an RV will lose about 20% of its value.
  • Year 2 – Two-year-old rigs haven’t lost much of their value and are worth approximately 77% of their purchase price.
  • Year 3 – At three years old, an RV will have lost about 28% of its value.
  • Five years – After half a decade of use, a rig will have lost approximately 37% of its value.
  • Year 10 – At a decade old, RVs become much more difficult to sell. They typically will have lost 55% to 60% or more of their original value.
  • 15 years – After 15 years, most rigs have lost close to 80% of their value. Unless a collectible brand, at this age, they can prove to be almost impossible to sell by traditional strategies.

If your rig has depreciated so much that it’s too costly to maintain, find yourself a junk RV buyer in Colorado. Specialized RV dealers will buy it, regardless of its condition.

How Do Damages Affect Depreciation?

Cosmetic damage can play a big part in the value of an RV. Add age and mileage, and its value can plummet fast. Buyers who see external or internal damage will immediately question the rig’s roadworthiness. Any type of damage to an RV, despite its age or mileage, could drop its resale value to less than much better-maintained rigs. Obviously, damaged RVs are incredibly difficult to sell. Private buyers and RV dealerships typically turn their noses to RVs with any kind of damage, no matter how minor.

Depreciation and Damage: When To Sell Your RV

All RVs will depreciate in value as the calendar pages flip. While most will retain much of their value up until the three-year mark, after that, they will begin to lose a significant portion of their original purchase price. By ten years old, despite mileage and condition, they begin to hit the unkind category of being a junk RV.

If yours has lost a significant amount of its value, you can still sell it, but not by traditional means. Contact a specialized junk RV dealer who purchases all rigs regardless of age, mileage, condition, or damage.

Depreciation and Damage: How RV Value Plummets With Wear and Tear (2024)

FAQs

Depreciation and Damage: How RV Value Plummets With Wear and Tear? ›

Add age and mileage, and its value can plummet fast. Buyers who see external or internal damage will immediately question the rig's roadworthiness. Any type of damage to an RV, despite its age or mileage, could drop its resale value to less than much better-maintained rigs.

How bad do RVs depreciate? ›

After three years of ownership, your RV is likely to be worth approximately 30% less than when you purchased it. After ten years of ownership, your Class A RV will depreciate to less than half of what you paid for it.

What is the formula for depreciation of an RV? ›

Depreciation percentage = (Initial Purchase price – current value) / Years owned. The initial purchase price refers to the amount you paid when buying the trailer, then the current value is the estimated market value of the RV, while the years owned refers to how long you have had the trailer.

How much does a motorhome depreciate in 10 years? ›

For those interested in class A RVs, you should know the following information regarding the depreciation rates: For a three-year-old RV: 26-27% depreciation. For a five-year-old RV: 35% depreciation. For a ten-year-old RV: 60% depreciation.

What are the hidden costs of owning an RV? ›

Apart from the initial purchase price, expenses like depreciation, maintenance, insurance, storage, fuel, and campground fees can accumulate to a significant amount.

How do insurance companies determine RV value? ›

An appraisal usually happens when the insurance company needs to know how much your RV's correct amount is. That is why it can only be determined using NADA guidelines or appraisal. Then once you have already agreed on a specific amount, that will be your “Agreed Amount” less your deductibles in case of a loss.

What is the IRS depreciation life of an RV? ›

Therefore, based on your facts and representations, the RV's having actual unloaded weights of less than 13,000 pounds are 3-year property as defined by section 168(c)(2)(A) of the Code, and the RV's having actual unloaded weights of 13,000 pounds or more are 5-year property as defined by section 168(c)(2)(B).

How do you determine the value of an RV? ›

Similar to the Kelly Blue Book for cars, the Dealer NADA RV price book is often consulted by dealers looking at purchasing your RV. Search units by year, make and model to find trade-in and retail value. Outside of the official NADA value, there are other sites that will help you determine your RV trade-in value.

Can I write off the depreciation of my RV? ›

To qualify for the Section 179 deduction, the motorhome must meet certain criteria laid out in the tax code and regulations. The costs of the RV that exceed the deduction limit can typically be depreciated over a specified period.

What is the average depreciation of a motorhome? ›

Like any vehicle, the value of a motorhome will depreciate over time. But the good news is that the rate of motorhome depreciation is relatively low, at roughly about 10% a year, and much less the longer the motorhome is owned. Generally speaking, motorhomes retain around 70% of their value after three years.

Which RV holds its value? ›

What RV holds its value the best? Among the three main types of RVs, Class C vehicles generally hold their value best. Class A and Class B RV depreciation tends to happen slightly more quickly. If you're interested in a camper you can tow, fifth-wheel campers generally depreciate more quickly than standard RVs.

What is the lifespan of an RV? ›

How long an RV, motorhome, or travel trailer lasts depends on various factors. However, generally speaking, two decades is reasonable for a well-maintained vehicle. The average lifespan of a Class A or a Class B RV or motorhome is between 10 and 20 years.

Does an RV qualify for section 179? ›

RV rentals only qualify for Section 179 deductions if used more than 50% for business. If you don't have more than 50% business use, you can still depreciate the RV based on the percentage of business use. This is if you report the activity on Schedule C and have active participation.

Are RVs losing value? ›

Used RV Prices on Slow Decline

The key takeaway is used RV pricing is on a gentle decline, largely influenced by lower, competitive pricing for new RVs. This means you will likely get less for your used RV trade than in previous months this year.

Is it financially smart to buy an RV? ›

Is an RV a Financial Investment? The short answer is no. With the exception of some in-demand vintage models, the value of an RV depreciates over time. An RV is an investment in a lifestyle, but you can mitigate the expense by renting it out when not in use through a third-party rental site like Outdoorsy or RVshare.

What is the average annual maintenance cost for an RV? ›

What is the yearly cost of owning an RV? On average, including the storage costs, payments, insurance, and a couple of road trips a year, the yearly cost of owning an RV is between $16,000 and $42,000, depending on whether you are buying pre-owned or brand new, plus between $1,000 and $2,000 in annual maintenance.

Are RVs a bad investment? ›

In fact, a study done by Camper Report found that RVs lose 21% of their value as soon as they're purchased and over 35% after five years. While this may sound harsh, the depreciation rates of an RV aren't that much different from those of cars.

Do any RVs hold their value? ›

Like all vehicles, RVs depreciate over time. You can determine an RVs depreciation by the vehicle's age, mileage, wear and tear, and the type of RV you own. Class A and Class B vehicles depreciate similarly, while Class C RVs depreciate more slowly and hold value slightly better.

Why do campers lose value so fast? ›

While we purchase them to be used, each minute and mile will detract from their value. However, unlike passenger vehicles, RVs typically take the road less traveled, and that road can be a damage-causing path. Dents, dings, and neglected repairs will cause RVs to depreciate faster.

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