Could this be the "Dirty Little Secret" of RVs?

[Roadtrek 1]

6 hours ago, FL-JOE said:

  If someone is purchasing a new RV with a MSRP of $150,000 then they had better be able to get the deal down to around $95,000 to $100,000, plus put down around $40,000.  If they don't then of course they will soon be upside down on that RV if financing long term

$95,000 purchase price on a  brand new $150,000 rig...... that's a wild exaggeration....not happening.     Where have you ever heard of something like that?   That's almost a 35 percent discount .  I don't believe it. 

6 hours ago, FL-JOE said:

What about full timing folks who used to pay $1,000 or $1,100 a month just in property taxes when they had a sticknbrick.  You can have your house paid off but it can still cost you a considerable amount of money each year.

Yes... $12,000 per year in just property taxes alone is a lot of money......

6 hours ago, FL-JOE said:

It would be hard for me to believe that anyone who would sell their home and invest all their money into an RV would be foolish to think they had just made a good financial decision

You really think this is so hard to believe.... actually...I think this might happen more often than you think.... they get all excited about the "lifestyle"... and "adventure".... plus ..the sales team makes it sound so easy.....  Gullible.....

[remoandiris]

18 hours ago, Roadtrek 1 said:

 

Yes... houses are certainly expensive, but, they go UP in value not down.

This is generally true, but not always.  Kinda like the stock market...if you have to sell when the market is down, you may lose money.

One thing I took from the article was the couple's lack of estate planning and life insurance.  They were not self insured, either.  There have been financial "gurus" proclaiming for AT LEAST the last 3 decades how to protect yourself with life insurance as well as "pay yourself first" and work toward being self insured.

Poor planning/a lack of planning is not the fault of the RV industry.

[RV_]

6 hours ago, Dan Johnson said:

I know this is against the grain of most people but DO NOT finance  ( pay interest) on a depreciating asset. you will sleep way better at night.

Dan,

I've seen folks make money then finance other depreciating assets and appreciating assets to upgrade/update/get bigger and better. We are even more against the grain of most people. You see, when financed for 20-30 years an appreciating asset like a house usually ends up costing 50-100% more in actual paid dollars over the purchase price.

So a house bought for $200k and financed for 30 years at only 3.75 percent ends up actually costing $333,443.23 .

Source: https://www.myamortizationchart.com/30-year/200000-dollars/3_75-percent/

Many folks think that their tax deduction for annual interest paid think that is covered but the actual amount deducted is exactly your tax rate of the money. So if you paid $1000 in interest in a year, and your tax rate is 15%, you would actually get only $150 in actual money deduction, not $1000. You still paid $850, saved just $150 of the $1000 interest.

 

 

 

[Randyretired]

None of this sounds a lot different than any other vehicle. Buy it and the value decreases.  Drive it and it decreases more.  When we buy a car I consider it will be nearly worthless soon.  We generally keep our vehicles a long time and whatever value we get when we sell is just a bonus because I didn't plan on anything. Car owners can also get upside down on cars.  Very few things we buy maintain any value.  Some go into debt for new furniture or whatever and the value is rarely worth the loan amount  in short order. The dirty little secret is loans are expensive. After a 30 year morgage on a house the total costs are staggering.

[FL-JOE]

19 hours ago, Roadtrek 1 said:

$95,000 purchase price on a  brand new $150,000 rig...... that's a wild exaggeration....not happening.     Where have you ever heard of something like that?   That's almost a 35 percent discount .  I don't believe it. 

Yes... $12,000 per year in just property taxes alone is a lot of money......

You really think this is so hard to believe.... actually...I think this might happen more often than you think.... they get all excited about the "lifestyle"... and "adventure".... plus ..the sales team makes it sound so easy.....  Gullible.....

I hate to be the one to let you in on this fact, especially since you have obviously purchased from dealers.  It has been very common to purchase new RVs for a 30% to 35% discount off of MSRP.  How much markup do you think there is from factory to dealer?  My guess is that if the dealer has a $150,000 MSRP RV on their lot then they are actually paying the factory between $75,000 to $80,000 max, and that is if they are a medium to small dealership.

I have only purchased two new RVs.  Our fiver we got discounted just over 32% off MSRP and our most recent coach right at 28%.  

You are correct though when you said "gullible....."

[Dollytrolley]

So in my misspent youth......I paid WAY too much ($1200) for a slightly used 1962 Fuel Injected Corvette...... Grumps jerred me and said....."well Einstein, you paid way too much for that stud-wagon and in a few years it will be worthless".....so......FIFTY years later it is only worth +$80,000 /$90,000.......

Maybe folks need to buy used RV'$ and hang on to them..... FIFTY YEARS....... Just go out and find a FIFTY year old Barth motorhome........

Buying a RV is a consumable item purchase ...... somewhat like tires and oil.......you use the item for it's useful life to you and you then know the actual COST to play the RV-life-$tyle-game....

 

Drive on.........(what are you willing to pay to.......PLAY???)

[noteven]

Having a “MSRP” or “List price” is a legal requirement of vehicles, equipment dealers, recreational equipment etc etc. in many places, maybe even US states.

Under Canadian law no one “sells” you anything- you offer to purchase it. By taking a loaf of bread to the checkout you are offering to purchase in the eyes of the law.

Big ticket stuff - Yep - it’s that dreaded thing: negotiation.

[Kirk W]

1 hour ago, noteven said:

Having a “MSRP” or “List price” is a legal requirement of vehicles, equipment dealers, recreational equipment etc etc. in many places, maybe even US states.

Only automobiles have that requirement in the USA. No RV manufacturer or dealer is required to display one, even though most factories do supply one. Many dealers create their own version of one. 

[FL-JOE]

15 hours ago, Kirk W said:

Only automobiles have that requirement in the USA. No RV manufacturer or dealer is required to display one, even though most factories do supply one. Many dealers create their own version of one. 

I agree with most of your statement Kirk.  I think you would be hard pressed in the last 8 to 10 years to find a good size dealer that didn't mark factory based MSRP on their units, which except for added options would be standard for that certain make/model/size.

Roadtrek obviously was not aware of the huge mark up in RVs from factory to dealer.  Again, owning/purchasing an RV is nothing like owning/purchasing an automobile.  Some folks will never "get it" and continue to pay inflated prices.  

[Kirk W]

10 hours ago, FL-JOE said:

I think you would be hard pressed in the last 8 to 10 years to find a good size dealer that didn't mark factory based MSRP on their units, which except for added options would be standard for that certain make/model/size.

You need to look more closely at what is claimed to be MSRP. In the vast majority of dealers that document was created in the dealership using the prices they choose and nearly always includes "dealer add-on" items such as upholstery treatments and such. I have spoken with factory reps and most RV factories do not print such documents. You are buying into the charade just as they want you to do. 

[hemsteadc]

On 3/5/2019 at 5:19 AM, FL-JOE said:

what about full timing folks who used to pay $1,000 or $1,100 a month just in property taxes when they had a sticknbrick.  

Where are property taxes that high?  

[mptjelgin]

1 hour ago, hemsteadc said:

Where are property taxes that high?  

In Texas, annual property tax rates of 2% are not uncommon. In some areas the total property tax rate (school district + county + city + various add-ons for community college districts, hospital districts, etc.) can approach 2.5%

So a $600,000 property with a tax rate of 2% pays $12,000 per year, or $1,000 per month.  With no state income tax, the money has to come from somewhere!

 

 

[Barbaraok]

Lots of places in Texas.  Remember, no state income tax, so not much state money for schools (including community colleges), so higher taxes on property.  And property taxes are dependent on neighborhood values. 

[Roadtrek 1]

12 minutes ago, mptjelgin said:

In Texas, annual property tax rates of 2% are not uncommon. In some areas the total property tax rate (school district + county + city + various add-ons for community college districts, hospital districts, etc.) can approach 2.5%

So a $600,000 property with a tax rate of 2% pays $12,000 per year, or $1,000 per month.  With no state income tax, the money has to come from somewhere!

 

 

True....and you know what.... that never goes away... it's like being on an escalator....keeps going up.....

[Roadtrek 1]

13 minutes ago, Barbaraok said:

Lots of places in Texas.  Remember, no state income tax, so not much state money for schools (including community colleges), so higher taxes on property.  And property taxes are dependent on neighborhood values. 

This is true.... 

[mptjelgin]

The good news for RV'ers is that in Texas, there is no personal property tax, so RV's are not taxed annually on their value (you still have to license and register them). So if you are a resident of Texas with only an RV, you don't pay income tax or property tax. One of the reasons why Texas is a popular "home state" for Rv'ers.

[FL-JOE]

12 hours ago, hemsteadc said:

Where are property taxes that high?  

Not only parts of Texas, but Illinois can have extremely high property taxes.  We were going to be over $6,000 a year.  One of our son's was already over $11,000 a year and another son was being taxed almost $20,000 a year just north of Chicago.

[FL-JOE]

12 hours ago, Kirk W said:

You need to look more closely at what is claimed to be MSRP. In the vast majority of dealers that document was created in the dealership using the prices they choose and nearly always includes "dealer add-on" items such as upholstery treatments and such. I have spoken with factory reps and most RV factories do not print such documents. You are buying into the charade just as they want you to do. 

You can still get on your computer and go to some manufacturer's sites and see MSRP prices listed for different models, Newmar would be one of those.  Tiffin I believe stopped listing MSRPs.   Some fiver manufacturers will list MSRPs and some won't.  I'm not sure about "dealer add-on" items because I have never really experienced much of this.  Our current RV did have options from the factory (3rd a/c, full tile, etc) that drove up the MSRP.  However we found models equipped the same at a couple other dealers and they had the same starting (MSRP) price.

[hemsteadc]

5 hours ago, FL-JOE said:

Not only parts of Texas, but Illinois can have extremely high property taxes.  We were going to be over $6,000 a year.  One of our son's was already over $11,000 a year and another son was being taxed almost $20,000 a year just north of Chicago.

That's about 12 times what I'm used to paying. Outrageous.

[hamrs_62]

On 3/5/2019 at 11:21 AM, Roadtrek 1 said:

$95,000 purchase price on a  brand new $150,000 rig...... that's a wild exaggeration....not happening.     Where have you ever heard of something like that?   That's almost a 35 percent discount .  I don't believe it. 

Yes... $12,000 per year in just property taxes alone is a lot of money......

You really think this is so hard to believe.... actually...I think this might happen more often than you think.... they get all excited about the "lifestyle"... and "adventure".... plus ..the sales team makes it sound so easy.....  Gullible.....

the problem I see is that people forget money is a tool, and is used to make it through life, your not going to get a return on your investment when you arrive at the pearly gates, if you think you are making a financial gain after a thirty year mortgage somethings wrong, now if you save for your house before you buy it and pay cash you might get a return, but in today's markets, that is a good maybe, short term turn arounds is where you get a good return if the market holds, so what ever you do, do it with the realization, that as long as your able to take care of yourself and your family, that is all that matters, because we all die with what we are born with, NOTHING 

[hemsteadc]

9 hours ago, hamrs_62 said:

.. as long as your able to take care of yourself and your family, that is all that matters, because we all die with what we are born with, NOTHING 

x2.  My Mantra regarding money in retirement: "I worked hard for my money, now my money is going to work hard for me."

 

[RV_]

X3 and then some!