The Buying Equation

Don Cohen Don Cohen  |  01.31.2016

The first of the year has found the global markets roiled with uncertainty. Many American households are enjoying a “tax cut” with significantly lowered energy costs.  But on the other side of the coin, many folks’ investment and retirement portfolios have been taking a beating.

The RV business is cyclical and can be deeply effected by the cost of fuel and, as an non-essential luxury item, recessions in the economy.  The US has been on a very slow, but consistent expansion of the economy since the 2008 recession.  Historically, some economists say that expansions of this length are rare and the time is drawing near for a slowdown.  On the other hand, there’s a group of economists who think that this long expansion will continue due to its very nature of growing slowly.

The consensus opinion of leading economists is that there’s not probably much in the domestic landscape that would cause a true recession, but one does need to be mindful of the slowdown in China and the softness of the European economy.  Now that economies are essentially globalized the US can be effected by poor performance elsewhere.

Amidst this macroeconomic uncertainty, there’s two bright lights — the low price of gas and diesel and low interest rates.  Here in Colorado we’ve been seeing diesel prices pretty consistently under $2.00 dollars a gallon.   Given a slackening in world demand, new-found abundance of resources, and general oversupply, it’s reasonable to expect that prices will remain pretty affordable for the next few years. . .if not longer.  And given that the cost of fuel is a huge variable in RV travel budgets, this is very welcome news.

The cost of money remains to be attractive with interest rates at a generational low and little concern that they will rise. Lower rates can extend purchasing power allowing you to consider product upgrades or a step-up in class while keeping monthly payments within your budget.

Behind buying a house, the purchase of an RV is probably one of the larger financial decisions many of us make.  Is buying an RV a good investment?  It depends how you’re measuring that investment.  A few years ago I sat around a table with several venture capitalists who I worked with in my public company career.  Typical of VC’s they mercilessly poked at me to uncover the soundness of the economic value of my decision to buy a motorhome.  What about depreciation?  Cost comparisons to other modes of travel? On-going maintenance?  The thrust and parry went on for a few minutes until I drew the debate to a close with, “I’m simply converting capital to memories.”  One of them paused, looked at me, smiled, and then said, “that makes perfect sense.”

Over the years I have bought and sold a good deal of residential and commercial real estate properties.  Some choices (like primary and second homes) were more emotionally driven than others (income and appreciation generation properties).  In real estate calculations the expectation of a rise in equity is always a key factor.  An RV purchase is like a car where there is an expectation of depreciation.  In the face of purchasing a known deprecating asset how does one arrive at a thoughtful decision?

Many buyers narrow the depreciation gap by buying a used product.  It can be a very good strategy, but the older the unit the higher the maintenance risk becomes.  Finding a unit in the sweet spot of price and age takes careful thought, research and experience.

Buying new gets you a reasonable period of warranty coverage and state of the industry design and technology.  These days it’s amazing how much the underlying components in an RV change within 3 to 4 years.  Buying new can make a lot of sense especially if you plan to keep your unit for 5+ years.  Yes, it will have depreciated, but that equates to the useable economic life and enjoyment value you’ve consumed.

And then there’s the “exit strategy.”  Just like home buying, we are all prone to get tangled up in the romance of features and floorplans.  And why not?  We’re the ones who are going to be using them.  However, if but for a few brief minutes, put your investor hat on and think about resale.  Is this a flexible and livable floorplan?  Is this a popular model?  Is it built with materials that are durable and will look good after some years of use?   Sometimes looking at a product through someone else’s eyes will cause  you to think of things like, “we’ll never use that upper bunk, but it might be attractive to a family in the future when they’re looking at this as their first RV purchase.”

Through calculation, evaluation, and rationalization we all get there in different ways.  Often the hardest intangible to qualify is the value of the RV experience.  For me, the most visible measure appears on my screen savers to which I am always adding photos of our trips.  The collection continues to grow and there are times where I’ll sit at my keyboard and not tap on any keys to watch the pictures dissolve by.  We’ve been to a lot of great places, had some fantastic experiences, and plenty of good memories.  And looking at the “evidence” that has proven to be a very good return on investment.


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  1. Manie Posted on 11.28.2016

    We have a Trend 23B and are having a great time with it. I highly recommend this layout as we can easily have 2 people sleep on the “first floor” and 1 person sleep “upstairs” in the motorized bed. In addition, the bathroom provides great access and good size. We recently completed a cross country round-trip vacation and it was a blast!

  2. Di Posted on 10.23.2016

    Great info! I need Help! I have a 40 ft. Winnebago Journey & tow a Tahoe. I am considering downsizing to a more manageable, park anywhere RV. I would like to stop towing. I know I will miss my washer & dryer more than anything but, I think the convince of unplug & go would make up for it. Btw, it’s a 2011 & only has approx. 5700 miles on it. If anyone is interested. Can you please give me advise on something around 24 ft. I would like an over driver bunk for when my nephew travels with us. Thank you so much.

    1. Don Cohen Posted on 10.24.2016

      In the Winnebago product line there are three great choices of compact RVs. The Trend (RAM Promaster chassis), the Fuse (Ford Transit Chassis), and View/Navion (Mercedes Sprinter chassis). Coming from a big rig you may be most comfortable in the View/Navion (the only thing that’s different is their color choices and which dealer you prefer). The View/Navion offer the largest living space of the three models and all floorplans can have the over the cab bunk. I have driven all three products and can confidently tell you that you’ll find them exceptionally easy to drive. They are much more car-like in their driving feel. As the top of the Winnebago compact product lines, the View/Navion can be equipped with almost all the features you have in your larger Journey, from a couple of flat screen TVs to aftermarket HWH leveling jacks. Truly about the only thing missing is the washer and dryer.

  3. Dean C Posted on 09.11.2016

    Hi Don , My wife and I live in Highlands Ranch , CO and are considering our first rv . We’re sold on the quality of Winnebago products and have been doing research for a while on the type of rv we might get . Being a truck driver I lean towards a motorhome of some type and my wife REALLY likes the micro Minnie travel trailer . We go back and forth about the virtues and drawbacks of both . The largest vehicle we own is a 2000 Nissan frontier 4×4 pickup that would be our tow vehicle . According to the info that I’ve been able to find the truck has the capacity to handle pulling the trailer but I’m afraid of the tail wagging the dog . I could more easily see us towing one of our vehicles behind a motorhome . What do you think ? GREAT article ! The company that I work for does LOTS of business with Transwest .

    1. Don Cohen Posted on 09.11.2016


      I’ve got to own up to my own bias toward a motorhome. Recently we were in a campground in Idaho and I watched as a couple pulled into a campsite with their trailer next to us at the same time we arrived. I was jacks down, slide out, and plugged in within 5 minutes. They were leveled and set in about 20. Another big upside for us that, when traveling, the bathroom, fridge, and galley are always “open.” We haven’t seen the inside of a gas station restroom in 4 years. A close college buddy of mine recently bought a Micro Minnie that they’re pulling behind a new 4Runner. Their style is more akin to camping while ours is more “touch and go” mobile living. We have towed a vehicle behind us for the past three years, but on our recent trip to Idaho, left the Focus in the garage. It reminded me of how easy and simple having a compact motorhome was as we did everything we wanted to do without missing the car.

      A motorhome easily costs 2x or more than a towable (not counting the car) and that’s a BIG economic differentiator. Ultimately your decision will hinge on both your checkbook and travel style. The good news: Winnebago makes solid, long lasting motorized and towable products.

  4. jim shook Posted on 09.10.2016

    We just purchased a new 2015 ,32D Adventurer, we use it to travel around Florida. We love it..and would do it again.

  5. Robert and Norma Posted on 09.02.2016

    Hi Don,

    Thank you for all the good articles on Navion 24J/View24J. We live in Denver and had visited many RV dealers. My husband and I have been contemplating whether to go with a cheaper and bigger RV versus smaller, dependable, agile, quality, good mileage, etc., 24J. We’ve come to a conclusion that bigger doesn’t always mean better. The 24J fits our needs. We currently have a bigger trailer that we pull with our Toyota Tundra, but it’s a pain to hitch/unhitched every time. Later this week we are driving to Forest City, Iowa to possibly purchase a 24J. We’ll appreciate any tips you could give us. Thank you.

    1. Don Cohen Posted on 09.10.2016

      Hey fellow Denverites! I’m sorry in the delay responding to your post as we’ve been in some very remote and internet-less areas in Idaho and Montana. In our Navion, of course. After a two week 2,000+ mile trip I think we love it even more than when we first got it. It’s a delight to drive (I did a non-stop six hours from Little America, WY back to Denver today and don’t feel a bit tired). Surprisingly, with 26,000 miles on it this is the first big trip we didn’t take a tow car (took the e-bikes instead). Mileage popped up about +2 MPG and it was very liberating not having the car behind us in getting into virtually any gas station and making quick work of back-in sites. Hope you find or found one you like!

  6. Bob Ginn Posted on 08.24.2016

    Hi Don, nice article and keen observations. My wife and I are getting ready to go full time for “hopefully” for 5 years and are confronted with so much information. The nice price on the used is tempting, but I can appreciate your buy new logic. This will be our last big investment so we really are hesitant. Where ever you find a “Do”, there is a “Don’t” for the same thing. I think I would be farther along in my choice if there was no such thing as the internet.

    1. Don Cohen Posted on 08.25.2016


      Before making any big lifestyle or business decision it’s good to do as much due diligence as you can. Follow the link below for a listing of contacts for the WIT Club. Specifically, look for the the Area Representatives. These are couples who serve as Winnebago Ambassadors and live full-time in their rigs. They are great folks, warm and welcoming, and can provide a lot of insight into the financial and social considerations of full-time living.

  7. Colton Wayan Posted on 08.06.2016

    You know, I’m a young RV buyer. I’ve done hours of research. Every time I run the math I think, “Bad investment.” After reviewing this article it reminded of why I started out down this path and it was to see the country, not save money. I have a dream of doing it now vs later. Thanks for the reminder.

  8. Grey Dog Posted on 02.26.2016

    Excellent article, we are a couple years from full retirement and are starting to research the RV lifestyle by renting one on vacations. We are just having trouble justifying outlaying so much of our savings in ONE go for something on wheels! Yet, the memories, the adventures, a slower pace, the opportunity to bring our little grey dog…not having to search for dog friendly h/motels.

    In the meantime, I enjoy reading about the Winnebago adventures this site provides.