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Thread: What's a trade in worth today?

  1. #11
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    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.

  2. #12

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    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.

  3. #13
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    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?

  4. #14
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    Aug 2009
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    Quote Originally Posted by Sawbonz View Post
    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,

    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.
    Last edited by travelite; 02-18-2011 at 01:06 PM.

  5. #15
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    anytown
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    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.

  6. #16
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    Jul 2009
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    Quanah, Texas
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    Jon:

    As usual well thought out and well said!!

  7. #17
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    Jasper
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    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!

  8. #18
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    Brooksville, Fl
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    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.

  9. #19
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    Quote Originally Posted by travelite View Post

    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.

    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!

  10. #20
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    Aug 2009
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    Quote Originally Posted by Sawbonz View Post
    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.

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