I asked Lazy Days about mine, should I find a coach and (I have to) trade mine in. They said wholesale is $207k, but they would likely pay 80% of that. Being that I owe considerably north of wholesale, that 20% bothers me. WTH is with that?:mad:
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I asked Lazy Days about mine, should I find a coach and (I have to) trade mine in. They said wholesale is $207k, but they would likely pay 80% of that. Being that I owe considerably north of wholesale, that 20% bothers me. WTH is with that?:mad:
I follow a certain unamed car dealer to auctions. He let's me do the heavy lifting like carry his wallet. As a result I have gotten to see the wholesale or auction side of the motor vehicle resale business.
I hope he posts and tells it from a professional's point of view. My spin on this is he and every other dealer is trying to buy low and sell high. It sounds like a joke until you start thinking of reality. When he bids on a vehicle he is hoping the people in his market want to buy that vehicle. If they do he also has to hope they will pay what he needs to get in order to make money. If he pays too much he has a car sitting on the lot getting worth less as each day passes. He risks there is not something wrong with it. He drives it, looks for codes, and tries to assess its condition but only the owner really knows what or if anything is wrong and they are not necessarily being truthful. A dealer buying your RV has no assurance you aren't trying to get rid of a lemon.
But today the dealer has another player that is the elephant in the room. If he pays too much for it, he cannot sell it because nobody will finance it for what he has to get out of it. If you decide you don't want to give up some money you need to pray the buyer is willing to pay your price (good luck with that because you have nothing to offer after the sale) and that the buyer has cash or can get financed. Getting financing for a car or RV requires that the buyer put a huge chunk of cash down, or that the dealer pays so little it can be sold at a price low enough to get it financed. The days of financing 100% of the purchase price are just about gone and the dealers have to adjust to that new reality.
Any of us that are selling or trying to sell big ticket items today are dealing with people that have cash and know they have you where they want you, or you are dealing with folks who have wants and needs far greater than their wallets will allow. You will spend a lot of time talking to both types. If you are lucky enough to find a buyer willing to pay what you think is a fair price today, and he has cash in hand, not only should you take his money, you should run out and get some lottery tickets because today is your lucky day.
When the bottom hit I was told by a RV wholesaler that he would only pay 50% of wholesale(based on NADA) and he had plenty of opportunities.
As much as I would like to see you driving a Prevost, Karl, exactly what is so bad about your RV that compels you to take what sounds like a substantial beating to go out and repeat the process? In weak moments my eyes glaze over looking at newer Country Coach Prevost coaches with 2 slides but then I do the mathematical equation that provides me with reality. That is answering exactly what I will get for my money. Every single time the answer is "not enough".
We really like new stuff and especially new big ticket items like planes and cars and buses. But not so much we feel compelled to transfer our wealth. (Sorry for the little attempt at political humor)
I think Jacks comment is dead on, I was told 40 - 60% of wholesale on a good day for a trade-in of plastic by a Dealer acquaintance.
Karl - I think Lazy Days was blowing smoke at you, but I suppose you could get 80% on a trade while you pay almost full retail for the upgrade. If your that far upside down, just keep driving the Monaco and count the money you save. You also could try to sell the Monaco and your loss wouldn't be as great as a trade-in deal. Then you can shop for a Prevost with no baggage.
Jon, you sound like my wife! ;)Quote:
Originally Posted by Jon Wehrenberg
Truthfully, the answer is nothing. I plan to continue to sock away cash while we look and learn. IF we find _the one_, we'll jump, but there is really no hurry. That said, I want the quality of a better vehicle. Ours is great...really. I love it. But, should we ever make it full time, I want something more substantial.
Blowing smoke why? You don't think they would even give 80%?Quote:
Originally Posted by truk4u
I know I will get hosed on a trade, but it does seem to be the time to buy a bus. if I lose $100k one one but gain $200k on the other, did I lose?
If you have the time, and don't get restless, Run an Ad in 3 or 4 RV web sites for your Monaco. Or, put it on consignment with one of our sponsors. You probably will not get out from under the upside down situation but you will get the best price in todays market. Remember , your coach is going down in value daily.
Karl,Quote:
Originally Posted by Sawbonz
Now you have my attention. How are you going to gain the $200K? Every one of us wants to know that.
Right now I think we all would just like the depreciation we all experience slow down a little. The reality is that while our coaches lose book value by the bushel full every day we all continue to drive a substantial vehicle that is going to give us many years of good service and that is what makes our coaches so important to us. But gaining value or even slowing down depreciation hasn't been a part of ownership.
Karl,
If you believe there will be a financial "gain" in trading your coach and buying another (Prevost or not,) in my opinion you are setting yourself up for substantial disappointment.
The only way we could have taken a lesser bleeding at the wallet would have been to buy our Prevost first and not have suffered the substantial depreciation on our first four motorhomes that we just had to buy new.
We have learned a very expensive lesson.
But if you have figured out a way to "gain" financially by trading a plastic coach for a Prevost, I am sure interested in the details.
Gain is in the mind of the beholder...or something like that!
My rationalization is that prices are down, so I would pay less for the purchase than at another time. Iknow it isn't a real gain.
http://www.rvtraderonline.com/find/l...peror-94465243
I did a quick google and here is a dealer selling one @ $179k so the 80% of $207 sounds questionable. I would think their out the door number is $160k which tells me they can't have more than $140k in it.
That one is a little shorter and a couple less options, but that sucks regardless. It really makes it a stretch, so I wonder what the people that are spending $1.8M think?
Hi Karl,Quote:
Originally Posted by Sawbonz
This is how it's done:
http://marathoncoachsales.com/news/B...on_9_30_10.php
In other words, by the end of the third year the coach is 100% depreciated. If your business is in a 35% tax bracket and you bought a 1.8M coach, you get 630K back compliments the IRS. Then, at the end of three years, you put the coach on the market for 1.17M and you're three year ownership cost was zilch. Repeat as necessary.
This is why you see a lot of 3 year old coaches on the market.
Admittedly my explanation is somewhat of a simplification, but you get the gist. :)
The key is you better have a damn good justification for the purchase, and your record keeping has to be impeccible.
But David is absolutely correct, except for one little detail. When you realize the $1.17 MM (as a trade in or outright sale) you have to recapture the gain and you are subject to pay taxes on that gain. Ouch! Of course if you want to avoid the tax consequences just hang onto the coach partially purchased courtesy of the IRS. In 10 or 15 years when you sell it the gain which you recapture will be quite modest thanks to how the market values older coaches.
Having said that, we have often been approached in campgrounds by owners of high end motorhomes who want to talk about the Prevost. Up until the XLII was produced very few knew the difference between a relatively new Prevost and an older one. Even today there are a lot of folks who really don't know the ages of our coaches. I have been shocked at the number of people driving one or two year old high end motorhomes that have mentioned how they wished they could afford a Prevost and who stated that one day they will own one. It is like they have been hit in the head with a club when they are given the tour of the coach and then find out I paid a lot less for my coach than they did for their Signature or similar motorhome.
"What is a trade worth today" is actually the wrong question motorhome purchasers should ask. They should instead determine if within their budget for a conventional motorhome is it possible to purchase a good or even great used Prevost for the same dollars. We know everything that rolls depreciates. But I think we, Prevost and the converters are all doing ourselves an injustice by not broadcasting how much coach the owner of a used Prevost is getting in terms of value, reliability, quality, and durability compared to a conventional motorhome. If there were a concerted effort to make potential buyers aware of exactly how much they would get with a Prevost conversion compared to a lesser quality and more rapidly depreciating motorhome we would all benefit, including the buyers who migh otherwise have considered a motorhome.
Today's brain dump.
Jon:
As usual well thought out and well said!!
I have a friend who is picking up his 2011 American Heritage in a few weeks and it only listed for 750,000.00 and is trading another plastic coach that is only 3 years old, also bought new, so go figure! I could have a great Prevost just for the upside down money!
Jon,
You're right about needing to educate people. I never knew you Gould buy one under a mill until recently, and POG was a big part of that. I do think the membership to POG is a turn off to many who may otherwise be so educated.
Quote:
Originally Posted by travelite
Hmmmm, how would a gynecologist justify this?
The real drawback is the need to pay cash to make this worthwhile. We are working folk, who have to borrow for our luxuries! ;)
No need to buy it outright. You can borrow the money. According to the IRS, you still own it, even if it's subject to debt.Quote:
Originally Posted by Sawbonz
If it has a business justification the interest on the debt is deductible.
We bought ours originally for personal pleasure use. We never intended for it to be used for business purposes. But after one year of traveling and seeing all the products we could produce in our factory, including electric power outlets, picnic tables, fire rings, charcoal grilles, etc. we started using the coach to bring us and the displays to trade shows. (www.jamestownadvanced.com) Simultaneous with that I started doing seminars on behalf of a major customer and we used the coach (or my plane) to carry the audio visual stuff and all of the literature and product cutaways for the seminars. Between the two business purposes we were actually using the coach almost 30,000 miles a year for business. The IRS has never taken issue with any of our deductions taken for the coach, which not only included depreciation, but every drop of fuel and every dollar spent on maintenance. Having a business purpose for a coach is like getting a 35% discount on everything associated with owning and operating a coach.
The interest is deductible as a second home whether there is a business use or not.
From time to time we engage in private and forum discussions on coaches, their value, and details relating to evaluating one. Those of us that are interested cruise through the various sites from time to time just to see what's out there and likely to measure what is being offered for sale against a coach we own or are contemplating.
Today I ran across a coach that I think either has a misprint for the selling price or I am way off base in my thinking of values.
http://www.prevost-stuff.com/1995Pre...CoachSales.htm
To my way of thinking this coach would be a steal. Assuming it was in decent shape as advertised, the price appears well below what I would have expected. I recognize the coach needs work. The belts are missing from the OTR compressor so something is wrong there and that could be expensive. I don't know the age or condition of the tires, air bags, batteries, its maintenance history, if it smells like the bottom of an ashtray, and how clean it really is, inside and out. But at that price a buyer could buy tires and all the other things necessary to bring it into a first class status as far as mechanical reliability and still have pocket money to buy a lot of fuel compared to prices on similar coaches.
Maybe the market still has not hit bottom.
That does seem cheap. Maybe its going to be the same as the housing market. They say here north of Tampa that we are still a ways from the bottom.
Another thread referred to Prevosttrader.com. Their front page has a couple of '94 models around that price point, so maybe that is just where it is...
Panterra Coach has a 1997 Marathon for $119,000.00.
JIM
I guess if those prices are the new reality the market still is a buyer's market because those prices don't come close to reflecting the real value of a coach that still has 80 to 90% of its life remaining.
Quote:
Originally Posted by travelite
Regarding pre-owned units wouldn't the use of the vehicle as a mobile "office" to conduct meetings/conference and so forth meet the 179 deduction criteria? I know I'm asking an accountant question but not sure if some of you have already vetted this question.
There are very important limitations to the 179 deduction, and business use depreciation of the motorcoach for tax purposes in general. For instance, you may not take a 179 deduction in a given year for more than the business for which the deduction is taken makes in that year. EG, a shell company with $50k in receipts isn't going to cut it on the full amount of 179 deduction of $500k. You may carry forward residual deduction which is income limited in a given year however.Quote:
Originally Posted by gershwin
With the amount of money you are talking about here, it is well worth the time to "vet" with a competent tax advisor. He or she will run you through the ringer on the legitimacy of business use for which you will be happy should the IRS come knocking down the road.
There is also a bonus depreciation acceleration allowed in 2010 and I believe again in 2011 in addition to the 179. If memory serves, this is limited to new equipment placed in service however whereas the 179 may be new or used. Again, tee up the knowledgeable tax advisor....
Yes you are right the 179 deduction form is for preowned or "not new" equipment. Was going to speak with a TA just wanted to do a little root'n around w/ like kind individuals before posing the "maybe" question to him.Quote:
Originally Posted by GDeen
thank you...
Gershwin,
Just to clarify, you may use the 179 for either new or used equipment...
Good luck - where there is a will there is a way....
Pricing today I"m seeing - 2001 non-slides in the mid to low $200's, 2001 1 slides $275k, add $15k-$25k for each MY thereafter, a $15k deduction for a CC digital dash. I'm seeing 2002 DS going @ $300k, 2003 DS $315-$325, 2004 $350-400k and 2005 in the $400k-$500k range. 2006-2007 - $485k-$599k of course Legandary price points aren't applicable.Quote:
Originally Posted by Jon Wehrenberg
Absent from any price statements or estimates will be two things. The first is the condition. A coach in pristine shape that has detailed maintenance records should have a higher value than an average coach of the same age and converter. While in general it may be accurate to value a no slide 2001 coach in the mid to low $200,000 range I can easily think at 10 years of age some very expensive items that could be due for replacement or that have already been replaced making for a huge swing in value.
Add to that the cost of a deep cleaning or even replacement of carpets and upholstery and it is not unreasonable to add or subtract $50,000 from the range when also considering if air bags, tires, batteries, Norgren valves, etc are due.
The second and perhaps more critical factor in evaluation is what a buyer will pay. That is influenced by a great number of factors such as the coach meeting the buyers requirements for layout, equipment, colors, converter, etc. It is also influenced by the buyers ability to pay cash or secure financing, and finally by the right buyer being there when the coach is available for sale. Some coaches have unique colors or layouts or equipment lists and a limited market because of that, but conversely a coach that has the most desirable layout, colors, and equiment may have a great number of potential buyers and therefore be valued higher by the market. As an example, all sellers of coaches will always make it very clear that a coach has OTR. While not everyone necessarily feels compelled to buy a coach with OTR, there will always be people that will not buy a coach because it does not have OTR.
But the bottom line is always going to be how much a seller will accept. Assuming the values for coaches listed above is correct it makes the issue of depreciation very clear as to one of the biggest cost of ownership, especially with respect to newer coaches.
One can bank on 50%-60% depreciation gone in the first 3 years of new unit ownership. Then it appears to drop off significantly to 10%-15%/annually.Quote:
Originally Posted by Jon Wehrenberg
I agree w/ your detailed evaluation perspective but my experience w/ other toys is that if you don't have a knowledgable buyer those "option" appeal items aren't valued at all. Maintenance is however a universal understanding and one has to assume that any coach w/ deferred maintenance must be up to date and sorted as a foregone conclusion when understanding the basic pricing structures.
One of the problems with buying a coach that has "deferred" maintenance is some corrections can be made with no future ill effects. For example replacing out of date or tires with sidewall cracking, replacing leaking shock aborbers, or leaking air bags instantly restores that portion of the coach. No harm, no foul.
But we cannot defer coolant changes, air filter changes or oil changes for example because replacing out of date items such as coolant and engine oil does not erase the harm that has already taken place. So a knowledgible buyer has no choice but to assume if a seller has allowed some maintenance items to be postponed, it is probable other items have been postponed. Delaying or even missing lubes can never correct the wear or harm done and that damage may not show up for a while. but when it does it can get expensive. Defer replacing bushings in an IFS front end and it is probable the ball joints will become damaged. Now instead of pressing in a few $50 bushings and paying for a few hours of labor it might ramp up into a $2000 repair. All of these types of deferred maintenance items will never be immediately noticed, but the damage has been done.
I would hope nobody believes doing a full maintenance on a coach that has a poor or no maintenance history does not all of a sudden create a great coach. I know a lot of buyers take pride in posting how the dealer or seller did this or that, but that is only a valuable maintenance event if it is a continuation of a good maintenance program