Motorhome Depreciation Levels?

[marchie]

Just been checking my spreadsheet on the running costs of Brunhilde [Burstner Ixeo IT 590 Time Sovereign] and want to make an accurate provision for depreciation. Camper UK have the same year model as ours, but with 1200 miles more on the clock, and '£4782 of extras' [most of which we had on purchase or have fitted subsequently; we don't have the towbar that the Camper UK model has]. If we allow a Dealer margin of £8,000, that would give a P/Ex of about £51,000, making our depreciation over 21 months just under £2,000, plus the cost of the extras we have had fitted, Put another way, the Camper UK asking price is exactly £7,000 more than we paid from a Dealer in Apr 2021!

Have prices of used M/Homes really risen by what I feel is a huge amount? I was working on the COVID Price bubble bursting and prices falling, at, say. £5,000 -£7,000 in years 1-3, and perhaps £3,000 to £5,000pa thereafter

Steve

 

[wildebus]

I think it is not just the Covid effect but overall supply and demand. With a massive price increase in NEW motorhomes plus limited availability, the demand for used ones has increased and so prices up for that reason as well.
This is also true of cars as well as Motorhomes and if you got a valuation for a car you would find the depreciation is way less than what you would have traditionally expected.

What YOUR motorhome is worth and how it has changed I personally would not have much of a clue but I think your expectation on way its value might have dropped would be pretty pessimistic

To give an example, I have a friend who bought a Brand New Motorhome in 2017. It was declared a total write-off due to fire in Oct 2022, so would have been over 5 years old. The insurance paid out a little more than the original purchase price.

 

[2cv]

More relevant than depreciation in the cost of the lost interest if the money used to purchase was invested. In my case 10 years of depreciation is £10000 at worst whereas even at 5% per annum I’ve lost over £25000 in investment gain.

 

[rugbyken]

i think your dealer margin might be a bit hopeful they were,looking at needing a third for selling services on one of mine they had same model for 31 thousand wanted mine no trade in for 18 could go up to 19 cos it’s good condition for age but mileage high for 7 hrs old at 31000 i told him to get lost sold it private for £26,000

 

[Scotia]

A brewery I look after the owner put a deposit on a new Frankia last spring with delivery date in June, he recieved a call last Thursday stating that there was a delay in delivery now expected September and for that privelage there was an increase of 10k, may give you an insite to why secondhand has gained in price.

 

[Wully]

You haven’t gained anything it’s like your house it’s worth zilch as long as you stay in it and when you sell or trade in the new one will be top heavy it will balance out over time.

 

[Mr and Mrs Tupcox]

We have never lost on a van over 8 years and px 4 times .
Only thing i can says is extras are worthless they price the van .that's it.

 

[marchie]

More relevant than depreciation in the cost of the lost interest if the money used to purchase was invested. In my case 10 years of depreciation is £10000 at worst whereas even at 5% per annum I’ve lost over £25000 in investment gain.

You haven’t gained anything it’s like your house it’s worth zilch as long as you stay in it and when you sell or trade in the new one will be top heavy it will balance out over time.

Not worried about a loss or gain, Wully; I'm interested in setting a realistic rate of depreciation so that I can track actual operating costs, across all categories of expenditure, per mile, overall cost per annum, and the total cost of ownership for the duration of ownership. It's something I do for every vehicle I buy, but I have expanded the spreadsheet to incorporate lpg purchases.

Steve

 

[Okta]

I choose not to worry too much about depreciation. I bought a motorhome for a price I was happy to pay and intend to enjoy it. What it is worth now is probably high because of current shortages. It could be a very different market when I come to sell, oversupply, recession, fuel rationing etc. Who knows we can’t predict the future. Perhaps when new diesel engines are banned the old diesel ones will have premium prices or perhaps there will be so many restrictions on using them the prices will fall through the floor. Current depreciation is only meaningful if you are thinking of selling now, it will probably have no bearing on prices in a few years time. “The Times They Are A-Changin'.”

 

[marchie]

I choose not to worry too much about depreciation. I bought a motorhome for a price I was happy to pay and intend to enjoy it. What it is worth now is probably high because of current shortages. It could be a very different market when I come to sell, oversupply, recession, fuel rationing etc. Who knows we can’t predict the future. Perhaps when new diesel engines are banned the old diesel ones will have premium prices or perhaps there will be so many restrictions on using them the prices will fall through the floor. Current depreciation is only meaningful if you are thinking of selling now, it will probably have no bearing on prices in a few years time. “The Times They Are A-Changin'.”

Depreciation to date is a useful measure of running costs, and It helps the measurement of when the non-cash item that is depreciation is exceeded by the cash costs of repairs as an indication that it is getting to the time to think about a vehicle replacement

Steve

 

[wildebus]

there are clearly two aspects to running costs, and I cannot remember the correct terms but anyway .... The fixed costs which are incurred regardless, and the incremental costs that are incurred as you use the vehicle.
I would say it would be interesting to track the incremental costs as that will tell you how much it costs to use, but the fixed are ones you cannot do much about so why worry about them?
Road Tax is what? £165 or £275? doesn't matter if used or not so log it elsewhere.
Servicing? interesting one. For the typical Motorhomer, that could be a fixed cost as chances are a service once a year regardless of if driving 1,000 miles or 10,000 miles.
Same with insurance, MOT, and most other costs.
I used to log all this kind of stuff (cost calculations used to be a major part of my work, collating literally hundreds of cost spreadsheets with amortised costs over 10 years) but to be frank, just can't be arsed any more

now the idea of maybe time to change when repairs cost more than depreciation? who knows what the next vehicle will be like? There is something to be said for sticking with repairing what you have as once something is fixed, that part will be good for quite a while but might need fixing on the next one sooner?

 

[marchie]

there are clearly two aspects to running costs, and I cannot remember the correct terms but anyway .... The fixed costs which are incurred regardless, and the incremental costs that are incurred as you use the vehicle.
I would say it would be interesting to track the incremental costs as that will tell you how much it costs to use, but the fixed are ones you cannot do much about so why worry about them?
Road Tax is what? £165 or £275? doesn't matter if used or not so log it elsewhere.
Servicing? interesting one. For the typical Motorhomer, that could be a fixed cost as chances are a service once a year regardless of if driving 1,000 miles or 10,000 miles.
Same with insurance, MOT, and most other costs.
I used to log all this kind of stuff (cost calculations used to be a major part of my work, collating literally hundreds of cost spreadsheets with amortised costs over 10 years) but to be frank, just can't be arsed any more

now the idea of maybe time to change when repairs cost more than depreciation? who knows what the next vehicle will be like? There is something to be said for sticking with repairing what you have as once something is fixed, that part will be good for quite a while but might need fixing on the next one sooner?

Fixed and Variable Costs, David! The traditional formula is VI-VC = Contribution to Fixed Costs, where VI = Variable Income and VC = Variable Costs, but the Economists argue that this overstates both the income [because selling prices tend to fall as the 'super profits' disappear with competitors entering the market and undercutting selling prices to gain a foothold in the market], and Variable Costs are also overstated, because there are mistakes/reworks/redsign etc in the original costings, and the learning gained removes or reduces the Variable Costs, which is a crucial saving when selling prices will begin to fall

I track all categories of cost for the M/Home and the Car, both per mile and actual cost, because that does show quite starkly the cost of having one's pride and joy sitting outside without turning a wheel. I drove only some 650 miles in the car last year, yet the insurance, road fund, MOT and servicing meant that I paid around £15 per mile for the privilege! It would be cheaper to hire a taxi, and I came very close to selling Tig!

The cross over point between depreciation costs and repair costs works for me. Once the cash cost of repairs begins to mount up, and the vehicle spends more time in the workshop than it does on the road, the peace of mind disappears and getting bills of £950 for timing belt replacement on a car that isn't worth much more that makes little sense. Tracking the repairs cost helps to minimise, if not eliminate, the 'chucking good money after bad' experience

Steve

 

[Scotia]

Is this what people do when they get old ? kinda takes the fun oot o it!

 

[marchie]

Is this what people do when they get old ? kinda takes the fun oot o it!

Naw, I started the monitoring on a spreadsheet [not as developed as my latest version!] in 1992; prior to that, I had a wee card that only enabled me to record fuel consumption. I get useful data, and it keeps me out of mischief ...

Steve

 

[jagmanx]

I track costs of our trips and also the yearly fixed costs
So 2 categories subdivided .
A1 insirance
A2 mot services etc
Etc
B1 Diesel
B2 camp costs
B3 ferry
Etc

I choose to not bother with depreciation !
Suits me.
Ps we paid £27,000 in 2010?
Maybe get £22,000 now.
Apart from the depreciation there have been other items
Installing gasit and solar
Replacing/adding batteries
Damp repairs.
Storage fees.
Clearly arguements for adding these to the A list or generating a C list !
But why ?

 

[marchie]

I track costs of our trips and also the yearly fixed costs
So 2 categories subdivided .
A1 insirance
A2 mot services etc
Etc
B1 Diesel
B2 camp costs
B3 ferry
Etc

I choose to not bother with depreciation !
Suits me.
Ps we paid £27,000 in 2010?
Maybe get £22,000 now.
Apart from the depreciation there have been other items
Installing gasit and solar
Replacing/adding batteries
Damp repairs.
Storage fees.
Clearly arguements for adding these to the A list or generating a C list !
But why ?

I track the expenditure and costs to see what the life of leisure is costing me, both overall and per mile. If it gets too high, I think about whether I'm getting the best use out of the M/Home and the best use of my money, If the M/home spends most of its life parked outside and getting very little use, then perhaps time to think about selling and return to cruising, or, heaven forfend, bite the bullet and carry out the threatened main bathroom and kitchen refits ...

Steve

 

[wildebus]

I track the expenditure and costs to see what the life of leisure is costing me, both overall and per mile. If it gets too high, I think about whether I'm getting the best use out of the M/Home and the best use of my money, If the M/home spends most of its life parked outside and getting very little use, then perhaps time to think about selling and return to cruising, or, heaven forfend, bite the bullet and carry out the threatened main bathroom and kitchen refits ...

Steve

What might be interesting to log is not just the costs but the potential savings

So if you are going away for the weekend to say York, for arguments sake, what is the cost of taking the motorhome away, cost of site for 2 nights, etc, compaed to cost of taking the car and two nights in hotel/B&B.
That should form part of the decision process. The supposed savings of camping holidays are, after all, the initial driver for many families to get a caravan.
(hey - maybe a Caravan rather than a motorhome should be factored in as you have a suitable tow car already?)

 

[jagmanx]

Yes , David.
As we live in the moho for 6 months we can let our house.
We have also had lovely times travelling at 1/3 the cost or less compared with.
B&B
Holiday cottage.
A Cruise.
Package deal.
Now they do not appeal to us anyway.