Reply
 
Thread Tools Search this Thread Display Modes
 
Old 06-15-2019, 10:12 AM   #1
Just an old timer...
 
85MH325's Avatar

 
2004 22' Interstate
Tipton , Iowa
Join Date: Mar 2003
Posts: 4,143
Images: 37
New Interstates and total cost-of-ownership

Perhaps I'll be made a pariah for trying to discuss this, but I'm baffled. I'm not interested in talking about the intangibles and pleasure of ownership and the use of a B-van... if those weren't in play none of us would own one; I just want to discuss the actual cost of ownership here.

So... my Interstate is an '04 with now 106k miles on it. I have the original purchase documents. The previous owner bought it new from Colonial Airstream in '04 for $83k. That translates, with inflation, to $115k in today's dollars.

I bought the van for $12k in April, and have another $1k in maintenance.

So... in 15 years, the previous owner lost $70k (or 84% of it's orginal value) to depreciation or $4,700 (6%) a year. Now that doesn't count maintenance expenses, registration, insurance, and incidental expenses. I presume that the depreciation was non-linear and front-loaded on this van, but I just calculated it straight-line. He did about $5,000 worth of work to the drivetrain and other repairs right before he gave it to the dealership on consignment where I bought it.

A new Interstate runs over $190k now... and from the used prices I'm seeing depreciate some $30k in the first year, and a similar amount the second... amounting to a loss of some $60k to depreciation in two years... again not counting maintenance, and other expenses.

I am not a high-finance whiz, and my five-bedroom full brick construction 1960 atomic-age ranch house is only worth about $200k today in the market in which I live. I have a fairly substantial net worth with investment properties and other investments, but as a retiree, I can't imagine just losing $60k in two years. I can't justify even spending $80k on an RV. It kills me to spend $40k on a Jeep ! And I only did that because I got a lifetime warranty with it from Chrysler and used Jeeps were less than $5k less.

How do folks deal financially with the kinds of depreciation I described above?
__________________

__________________
AIR 2053 Current: 2004 Airstream Interstate "B-Van" & 2006 Born Free 32 RQ Kodiak Chassis
Former Airstreams: 1953 Flying Cloud, 1957 Overlander, 1961 Bambi, 1970 Safari Special, 1978 Argosy Minuet, 1985 325 Moho, 1994 Limited 34' Two-door, 1994 B190 "B-Van"
85MH325 is offline   Reply With Quote
Old 06-15-2019, 10:38 AM   #2
Rivet Master
 
2014 Interstate Coach
Arroyo Grande & Central Point , California & Oregon
Join Date: Sep 2011
Posts: 611
Like any vehicle, RV's do take a large hit in the first year or two. Many folks are willing to take the hit in exchange for having the latest stuff and/or having a brand new, unused vehicle. The RV manufacturers keep upping the game by adding new features every year that many folks can't live without. Often, something that is an option one year will become standard the following year. You seem to be doing it on a budget and there is absolutely nothing wrong with that as there is nothing wrong with taking the depreciation hit. Do keep in mind that most RV's have a 40% markup from dealer cost (Interstates are 30%) and most buyers are astute enough to negotiate closer to cost than MSRP so don't take as big of a hit as you calculated.
Good Luck
__________________

c21bill is offline   Reply With Quote
Old 06-15-2019, 11:24 AM   #3
Rivet Master

 
2012 Avenue Coach
Corpus Christi , Texas
Join Date: Feb 2018
Posts: 955
You got a stupendous deal on your van purchase (at least 1/3 of normal used value) so you probably should calculate about $24K less cost to the original owner if they had sold at a reasonable price. Kudos to you on your great deal.

Still, I agree that RV's are spectacularly expensive to purchase, use, and maintain. There's just no logical way to justify their purchase. But for one of the rare times in our life, we cast logic to the wind and splurged because we could afford to (at least by purchasing used) and there was just no other option where we would travel the way we wanted to. Expensive yes, but no regrets.
rowiebowie is offline   Reply With Quote
Old 06-15-2019, 12:16 PM   #4
Rivet Master
 
lsbrodsky's Avatar
 
2012 25' FB International
Trent Woods , North Carolina
Join Date: May 2013
Posts: 1,915
I think the answer to your question is "if you cannot stand the heat, do not go into the kitchen in the first place". Vehicles of any kind, including boats, are rarely a wise investment. Freedom of choice is what is great about America!

Larry
lsbrodsky is offline   Reply With Quote
Old 06-15-2019, 12:45 PM   #5
Just an old timer...
 
85MH325's Avatar

 
2004 22' Interstate
Tipton , Iowa
Join Date: Mar 2003
Posts: 4,143
Images: 37
You guys are all missing the point of my original post. Yes, I recognize that all of us expect some expense in owning RVs, I understand there's going to some depreciation, and I understand what drives the market, and why folks want new.

What I'm asking is how anyone can afford a $50,000-60,000 loss to depreciation over two or even three years on a new <roughly> $190k coach?

I was talking to a service manager (former salesman) at an RV dealer where I had some service done, and he told me that they're selling every van they can get with TWENTY year mortgages. For an Airstream, even at a reasonable interest rate, that'd be $1200/mo for twenty years. I haven't calculated the break-even point where you can sell the van without being upside-down and fund a negative-equity position... but I'm interested in hearing how folks plan for that kind of loss.

Do you just have to have the cash to lose? How do folks manage that?
__________________
AIR 2053 Current: 2004 Airstream Interstate "B-Van" & 2006 Born Free 32 RQ Kodiak Chassis
Former Airstreams: 1953 Flying Cloud, 1957 Overlander, 1961 Bambi, 1970 Safari Special, 1978 Argosy Minuet, 1985 325 Moho, 1994 Limited 34' Two-door, 1994 B190 "B-Van"
85MH325 is offline   Reply With Quote
Old 06-15-2019, 12:51 PM   #6
Just an old timer...
 
85MH325's Avatar

 
2004 22' Interstate
Tipton , Iowa
Join Date: Mar 2003
Posts: 4,143
Images: 37
Quote:
Originally Posted by lsbrodsky View Post
I think the answer to your question is "if you cannot stand the heat, do not go into the kitchen in the first place". Vehicles of any kind, including boats, are rarely a wise investment. Freedom of choice is what is great about America!

Larry
Larry,

You've made my point elegantly. Vehicles are a depreciating asset. How do you deal with losing $60k in two years with no income from it to offset the loss of current value? As far as I know, there's no tax write-off for that kind of loss, and it's not a casualty loss... it's merely depreciation.

It's not about "freedom of choice," it's about wealth retention. I'm hoping to hear how some of the members here handle that loss.
__________________
AIR 2053 Current: 2004 Airstream Interstate "B-Van" & 2006 Born Free 32 RQ Kodiak Chassis
Former Airstreams: 1953 Flying Cloud, 1957 Overlander, 1961 Bambi, 1970 Safari Special, 1978 Argosy Minuet, 1985 325 Moho, 1994 Limited 34' Two-door, 1994 B190 "B-Van"
85MH325 is offline   Reply With Quote
Old 06-15-2019, 01:06 PM   #7
3 Rivet Member
 
2017 Interstate Lounge Ext
Jacksonville , Jacksonville, Fla, Sautee, Ga, Boca Grande, Fl, Breckenridge, Co
Join Date: Jun 2015
Posts: 135
Images: 1
Many of our friends think nothing of spending 25 to 50 thousand dollars a year for elaborate vacations to exotic locations outside of the US, with expensive travel and lodging costs. They treasure the experience and can afford the cost. The decision to pay the cost of depreciation is similar with a different experience.
If the cost is affordable and understood and poses no financial risk, then you can understand the decision is more about optimizing our limited life span than money. Many have more discretionary money to spend than time left to spend it.
busb2 is offline   Reply With Quote
Old 06-15-2019, 01:30 PM   #8
Rivet Master
 
Piggy Bank's Avatar
 
2019 27' Flying Cloud
Kansas City , Missouri
Join Date: Apr 2014
Posts: 1,433
It's pure discretionary spending, to be sure.

We are still working, so our "free time" is very valuable to us. We can airstream with our adult kids, they can bring the dogs, we can go on national park adventures, to local weekend spots to relax, and to visit friends.

We don't find flying vacations all that relaxing, as it is such a hassle anymore, and also very time-consuming with all the additional screenings.

We used to have a golf membership, but doing the math on that now that our kids are adults we would have to pay a guest fee to golf as a family, on top of the membership dues and fees.

Plus dreaming about where to go gets us through the winters.

We have friends with lake houses, that is more work than camping and more money too. Plus you go to the same place all the time.

This is our version of the lake house I guess.
__________________

Piggy Bank
Piggy Bank is offline   Reply With Quote
Old 06-15-2019, 01:39 PM   #9
Rivet Master
 
Piggy Bank's Avatar
 
2019 27' Flying Cloud
Kansas City , Missouri
Join Date: Apr 2014
Posts: 1,433
As to your second question about how we handle the loss.

It's by owning the choice.

There are things our friends and neighbors do, that we choose not to do.

I haven't remodeled my bathrooms, I decided I can live without international vacations, I decided I can live without fancy trips to major US cities, we cook vs eat out when we travel on vacation and at home, we don't feel the need for a lot of fancy showy jewelry or cars, etc.

It was a leap for sure to get into the rig we have now vs what we started with. That happened because there was an accident and we had to fish or cut bait. We took the option to get a rig large enough for a retirement rig even though we are a decade away from that. Not a sound financial decision on paper maybe, but it mentally is what we want to be doing between now and when we retire. And thinking about the long fun trips we can take when we have the time is also a lot of fun.

As to wealth retention, a real need to stay strong, fit, active, and engaged in our relationship has a lot of value as well. I know I need to lift weights at the gym so I can hitch up the trailer, move the generator, or get that cooler into the truck. If you believe health is wealth, then camping is a great investment .
__________________

Piggy Bank
Piggy Bank is offline   Reply With Quote
Old 06-15-2019, 01:49 PM   #10
Rivets?
 
nvestysly's Avatar

 
1992 29' Excella
2010 22' Interstate
Van By The River , Georgia
Join Date: Feb 2002
Posts: 1,765
I suspect there is no way to rationalize the matter of depreciation when it comes to owning an RV. With both our trailer and the addition of our Interstate we purchased a used rig to minimize the depreciation hit to us.

Your back of the napkin calculations are an interesting way to think about this but some of your presumptions may require another look. For instance, even though MSRP of a loaded Interstate may be approaching $190k there are some models as low as $150k. Tomato / Toma(h)to... I know. More importantly, not many people are paying MSRP. The folks I talk to a usually getting 20% discounts and sometimes more so that makes the purchase price more along the lines of $120k - $152k.

When we looked at used Interstates, 1 - 3 years old, they were not discounted much from the original MSRP so we avoided them. We found 5 - 7 years old gave us much more "discount" and we actually liked those models better because they had less electronic gizmos. We wanted to stay in the NCV3 body style rather than the T1N.

As somebody mentioned above, your $12k purchase is nearly unheard of so count your blessings.
__________________
Lucius and Danielle
1992 29' Excella Classic
2005 Chevrolet Suburban K2500 8.1L
2018 GMC Sierra K1500 SLT, 6.2L, Max Trailering
Got a cooped-up feeling, gotta get out of town, got those Airstream campin' blues...
nvestysly is offline   Reply With Quote
Old 06-15-2019, 02:16 PM   #11
Rivet Master
 
Mansderm161's Avatar
 
Currently Looking...
2018 Interstate Grand Tour Ext
NORTH MYRTLE BEACH , South Carolina
Join Date: Dec 2017
Posts: 651
I love my Interstate. I bought it new. I only considered it AFTER and ONLY IF I got a good price on the sale of a 2nd home as I downsized and retired. That money was already tied up in a home for years, then I paid cash with the proceeds from the house sale so I never withdrew it from "investments." I did not pay near 190K. I knew what I wanted to pay, and I shopped for months until I found someone willing to sell me EXACTLY what I wanted for the price I wanted to pay....ended up being Nov. 30 for the sale..."camping season winding down." I had several say "you will never get an Airstream at that price, perhaps you should look at other brands." When you call or shop at the dealers, give them your contact info....they will keep hounding you with "a better deal" until they know you purchased....some still hound me. I also wanted to put as much as I could on a credit card for "points". The place I purchased from let me charge 5% with no added fee. I cannot comment on financing because I would never finance an RV...just my personal view. I save for cars too and just pay cash. I did research for years on RV life in general, and you are really paying for the freedom to come and go wherever you want to go. I don't think camping with an RV is cheaper than other forms of vacationing, it's just different. Going full time is a different subject in regard to financing, but I can't see many full timing in an Interstate. After a year, I did upgrade my solar and bought lithium....that was a little painful since I did withdraw money that was earning money, but it was really life changing for me. You do need to really think about where you want to go in it, how long at one time, how often, do you always want hook up, etc. This is just my view.
Mansderm161 is offline   Reply With Quote
Old 06-15-2019, 03:37 PM   #12
Rivet Master
 
2014 Interstate Coach
Arroyo Grande & Central Point , California & Oregon
Join Date: Sep 2011
Posts: 611
As in all things financial, cost, expense, depreciation etc are relative. Those that take a large depreciation hit are probably higher income earners. That's why they make $20,000 camping trailers as well as $2,000,000 motor homes. In my case, I am retired and on a relatively fixed income. Before buying my newest rv I determined what percentage of our net worth it would consume to purchase the coach we wanted and found we could justify it. Once you own one, it is a relatively economical way to travel. We do a lot of sight seeing around the USA and it is much cheaper to stay in an rv park then a hotel. (not to mention the fact that you can save on meals and you sleep in your own bed at night).
c21bill is offline   Reply With Quote
Old 06-15-2019, 05:44 PM   #13
Rivet Master
 
InterBlog's Avatar

 
2006 22' Interstate
League City , Texas
Join Date: Oct 2014
Posts: 4,514
Quote:
Originally Posted by 85MH325 View Post
....
What I'm asking is how anyone can afford a $50,000-60,000 loss to depreciation over two or even three years on a new <roughly> $190k coach?
....

Do you just have to have the cash to lose? ...
Yes, they absolutely do. It really is that simple - some people have the cash to lose. Airstream attracts a lot of luxury buyers.

I was an 'academic superstar' (for lack of better term; meaning, full graduate fellowship to one of America's top 20 private universities - they paid me to go to school, not the other way around) and for a while I was on that treadmill to be a top career earner as well. People expected it of me.

I put the brakes on around 1991, and decided I wanted a simpler, more balanced life - less work-is-eating-my-whole-life, less income, more experiences. My husband and I bought our Interstate in late 2014 when it was 7 years old (already as depreciated as it was going to get) and turned it into a marriage project. It was a good fit to each of our personalities.

When I see wealthier people these days, occasionally I'm reminded that I was "supposed" to end up there, too. If I had, I know that I would have been so limited in my non-top-earner skills that if I wanted a few nice things, I'd have to deal with hella depreciation and whatnot, just like they do.

Instead, what I do these days is get filthy crawling on the ground under our 13-year-old rig with its 3-day-old engine that just brought me back from Austin Texas.

We only get so much of X, Y, and Z in life, and X + Y + Z is capped, due to our bandwidth limitations. We have to choose which one we max out. Some people chose the cash variable. I chose to become a skills generalist (many of those skills being non-paying!) because that's what keeps me engaged in life.

InterBlog is offline   Reply With Quote
Old 06-15-2019, 05:49 PM   #14
Just an old timer...
 
85MH325's Avatar

 
2004 22' Interstate
Tipton , Iowa
Join Date: Mar 2003
Posts: 4,143
Images: 37
Quote:
Originally Posted by rowiebowie View Post
You got a stupendous deal on your van purchase (at least 1/3 of normal used value) so you probably should calculate about $24K less cost to the original owner if they had sold at a reasonable price. Kudos to you on your great deal.

Still, I agree that RV's are spectacularly expensive to purchase, use, and maintain. There's just no logical way to justify their purchase. But for one of the rare times in our life, we cast logic to the wind and splurged because we could afford to (at least by purchasing used) and there was just no other option where we would travel the way we wanted to. Expensive yes, but no regrets.
Yes, I'd not seen ANY Interstate selling for much under $40k. I just happened to be the first caller on a dealership's ad in RV Trader. Once in a while, you're in the right place at the right time. It wasn't without issues, but most of them I've gotten repaired now. It seems to be a solid van.

My last B-Van was a '95 Coachmen that I'd bought in Oklahoma for $5k with 26,000 miles on it in 2015. I put 40k miles on that van in four years, put an additional $6k into it in maintenance and repairs and sold it last month for $19k.

I'll tell a brief story that has shaped my view of wealth preservation. In 1992 I was visiting Monterey CA for some continuing education for my job. I visited a friend who lived in the area, and he took me to a mutual acquaintance's house which happened to be the castle on 17 mile drive, if you're familiar with that area.

We got the tour of the castle which is more opulent inside than the Hearst Castle. There is a carriage house that had seven garages. They held a Lamborghini, a Lincoln Town Car, and five other luxo-motives. There was a '65 Malibu station wagon painted olive drab (Army surplus car from Fort Ord) and a big dent in one of the rear doors. I asked our mutual acquaintance why, with all of those high-dollar luxury rides at his disposal, that he'd drive an Army surplus car. His simple reply: "It's only costs me $0.15 a mile."

He was the heir to a huge family fortune and was free of pretense.. He lived modestly in some apartments in one wing of the castle. With an almost unlimited fortune at his disposal, he drove a car that cost him $0.15/mile. That was a significant lesson for me in wealth retention, and I began to look at how I spend MY money very closely as a result.

Although I'm far from "wealthy," we'll be comfortable in full retirement (I retired nine years ago, but my wife is still working full-time.) Unlike some here I don't have ANY friends who spend $50k/year on lavish trips, nor do I have a lake house. I DO have some residential apartment buildings that will be our inflation-resistant retirement income after my wife retires. BUT I've spent less than $130k in two new-ish cars, an '04 Interstate and an '06 Born Free 32 RQ.

$60k in my pocket instead of depreciation loss in two years would pay for half my total auto and RV debt.

Thanks for all of your thoughtful and insightful replies. I appreciate your thoughts. This is fascinating stuff.
__________________

__________________
AIR 2053 Current: 2004 Airstream Interstate "B-Van" & 2006 Born Free 32 RQ Kodiak Chassis
Former Airstreams: 1953 Flying Cloud, 1957 Overlander, 1961 Bambi, 1970 Safari Special, 1978 Argosy Minuet, 1985 325 Moho, 1994 Limited 34' Two-door, 1994 B190 "B-Van"
85MH325 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Sat Radio (SirusXM) for New Interstates Fix sthrngary Sprinter and B-van Forum 3 01-31-2018 10:17 PM
Near total redo cost? Silverfan General Interior Topics 21 05-05-2015 06:55 PM
Newbie to the board and to Airstream Ownership Lisa M Member Introductions 1 07-22-2013 08:13 PM
Total Cost Of Ownership? macninja Buyer Guidelines 16 02-10-2009 01:58 PM
The Agony And The Ecstasy Of Airstream Ownership - 2004 Classic flyfisher 2001 - 2005 Classic 33 07-27-2005 06:45 PM


Featured Campgrounds

Reviews provided by

Disclaimer:

This website is not affiliated with or endorsed by the Airstream, Inc. or any of its affiliates. Airstream is a registered trademark of Airstream Inc. All rights reserved. Airstream trademark used under license to Social Knowledge LLC.




Copyright 2002- Social Knowledge, LLC All Rights Reserved.

All times are GMT -6. The time now is 01:58 AM.


Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.