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 > A tale of two trailers, or prices are thru the roof.

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Timmo!

South-central Oregon...on the river

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Posted: 10/22/21 10:45am Link  |  Quote  |  Print  |  Notify Moderator

LOL, and I was cleaning out my old papers and came across the purchase contract for my 2000 Nash. I paid $13,000 and I had notes for an Airstream Safari (24') for $30k (our 2nd choice). And a few years earlier we purchased our So Cali home for $205k, which we sold in 1999 far north of $650k.

NADA guide shows the 2022 19B is just under $38k and the 2021 Flying Cloud (23') just under $79k, and comps on our old home are now in the low $900k.

I have received unsolicited offers of $12k for my 20 year old TT.

Yeah, I know technology and styles have changed, but entry level for consumers buying a new TT is really out of reach for many "common folks". Wonder what the prices will be in 2024?

* This post was edited 10/29/21 08:17am by an administrator/moderator *

Brandon the Traveler

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Posted: 10/22/21 11:14am Link  |  Quote  |  Print  |  Notify Moderator

Timmo! wrote:

L but entry level for consumers buying a new TT is really out of reach for many "common folks".


They just finance them for 12 years or longer. A TT that was @ $20K 18 months ago is now @$35K or more, and banks are lending towards them. Let the inflation continue including the ever rising cost of fuel and watch this house of cards come crashing down. When these inflated prices, actually values drop, it will be ugly.


I went.

bukhrn

Lanexa, Va

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Posted: 10/22/21 11:41am Link  |  Quote  |  Print  |  Notify Moderator

"Have you priced lumber, steel and other materials lately?" Yes, and that's exactly why the Amish are selling Rough Cut lumber as fast as they can cut & mill it, at a very fair price.


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Gdetrailer

PA

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Posted: 10/22/21 12:40pm Link  |  Quote  |  Print  |  Notify Moderator

bukhrn wrote:

"Have you priced lumber, steel and other materials lately?" Yes, and that's exactly why the Amish are selling Rough Cut lumber as fast as they can cut & mill it, at a very fair price.


Be aware, "rough cut lumber" is not typically "graded" nor is it finished and will be what is known as "full dimensional" lumber which may or may not be the exact same size as graded lumber and not kiln dried (shrinkage, twisting and cracking can be worse if wood has not be properly and carefully dried).

Many places now days will require graded (stamped) lumber in order to get a structure to pass inspections.

Not to mention, unless you have a pretty nice powerful planer it can take a lot of time to plane down rough cut into a nice smooth finished surface and multiply that by the tens of thousands of foot board time becomes a critical factor in the cost.. My time ain't cheap.

And yeah, the trailer builder that I bought the heavy trailer deck screws from mentioned that even they were still having issues getting the oak decking they needed for their orders.. I ended up using PT pine instead of the Oak that was on my trailer because I couldn't wait another yr for the Oak prices and stock to get back to a more normal place.

Timmo!

South-central Oregon...on the river

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Posted: 10/22/21 12:40pm Link  |  Quote  |  Print  |  Notify Moderator

Brandon the Traveler wrote:

Timmo! wrote:

L but entry level for consumers buying a new TT is really out of reach for many "common folks".


They just finance them for 12 years or longer. A TT that was @ $20K 18 months ago is now @$35K or more, and banks are lending towards them. Let the inflation continue including the ever rising cost of fuel and watch this house of cards come crashing down. When these inflated prices, actually values drop, it will be ugly.


IMO, when the amount financed exceeds FMV at the very beginning, then the entire deal will always be "underwater".

When a person makes a deal based on "how much is my monthly payment", and not on "how much does it cost", then it is proof positive that we have a generation of people that are absolutely "financially illiterate". (shakes head)

How many know that charging their credit card $5 for a Starbucks cup of Joe and then paying for it over 10 years at 25% interest...the real cost is $13.65. But it's only costing you 11 cents a month.

Financial illiteracy at it's finest.

afidel

Cleveland

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Posted: 10/24/21 12:59am Link  |  Quote  |  Print  |  Notify Moderator

Timmo! wrote:

Brandon the Traveler wrote:

Timmo! wrote:

L but entry level for consumers buying a new TT is really out of reach for many "common folks".


They just finance them for 12 years or longer. A TT that was @ $20K 18 months ago is now @$35K or more, and banks are lending towards them. Let the inflation continue including the ever rising cost of fuel and watch this house of cards come crashing down. When these inflated prices, actually values drop, it will be ugly.


IMO, when the amount financed exceeds FMV at the very beginning, then the entire deal will always be "underwater".

When a person makes a deal based on "how much is my monthly payment", and not on "how much does it cost", then it is proof positive that we have a generation of people that are absolutely "financially illiterate". (shakes head)

How many know that charging their credit card $5 for a Starbucks cup of Joe and then paying for it over 10 years at 25% interest...the real cost is $13.65. But it's only costing you 11 cents a month.

Financial illiteracy at it's finest.


My RV loan I took out last year is at 3.5%, inflation is currently 5.4% so as long as any investment I made instead of paying cash is at least keeping up with inflation I'm well ahead, and they are. But I did a normal 60 month loan knowing that I'll be trading up to a 5er about a year or two after that so I didn't want to have anything left on this one (going part time on the road after I get the younger one through college).


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Timmo!

South-central Oregon...on the river

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Posted: 10/24/21 07:05am Link  |  Quote  |  Print  |  Notify Moderator

afidel wrote:

Timmo! wrote:

Brandon the Traveler wrote:

Timmo! wrote:

L but entry level for consumers buying a new TT is really out of reach for many "common folks".


They just finance them for 12 years or longer. A TT that was @ $20K 18 months ago is now @$35K or more, and banks are lending towards them. Let the inflation continue including the ever rising cost of fuel and watch this house of cards come crashing down. When these inflated prices, actually values drop, it will be ugly.


IMO, when the amount financed exceeds FMV at the very beginning, then the entire deal will always be "underwater".

When a person makes a deal based on "how much is my monthly payment", and not on "how much does it cost", then it is proof positive that we have a generation of people that are absolutely "financially illiterate". (shakes head)

How many know that charging their credit card $5 for a Starbucks cup of Joe and then paying for it over 10 years at 25% interest...the real cost is $13.65. But it's only costing you 11 cents a month.

Financial illiteracy at it's finest.


My RV loan I took out last year is at 3.5%, inflation is currently 5.4% so as long as any investment I made instead of paying cash is at least keeping up with inflation I'm well ahead, and they are. But I did a normal 60 month loan knowing that I'll be trading up to a 5er about a year or two after that so I didn't want to have anything left on this one (going part time on the road after I get the younger one through college).


Yes, this years' inflation is abnormally high at 5-6%, but, imo, there are some fallacies in your line of thinking.

For the period 2011-2021, the annual inflation rate averaged 2.2% (try using this number in your analysis). In normal times, the rate of inflation will usually be close to, or below the prime interest rate (3.25% today).

Certain assets traditionally increase in value over time (real estate, stocks, precious metals, etc) and certain assets don't (vehicles, RV's computers, etc).

To value an asset purchased 10 years ago in terms of today's dollars, one starts with purchase price (say $10,000) and adjust it for inflation (10 years at 2.2%--lets keep it simple and call it 22% or $2,200). Ergo, an asset purchased 10 years ago for $10,000 is valued at $12,200 in today's dollars (inflation).

But this math does not work for assets that depreciate (RVs)--as the values are determined by the marketplace, called Fair Market Value (what a willing buyer will pay and what a willing seller will sell, neither under any duress).

Imo, we are witnessing in the RV industry an excellent example of "market aberration"; aka abnormal conditions.

I stand by my claim: If the amount financed exceeds the asset's FMV, the entire deal will always be underwater (loan < FMV). Said differently, if an RV is worth $20k but I pay $30k for it, and is financed 100%, when will this deal ever be above water (amount due on loan be less than FMV)? But I hear the howls, "what if I pay the loan off and sell it for $1"

Well,we have this thing called carrying costs, (aka interest). Difference between all cash purchase and 100% financed. Add all those interest payments to the purchase price and you have your actual cost.

* This post was edited 10/24/21 07:18am by Timmo! *

wing_zealot

East of the Mississippi

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Posted: 10/24/21 07:34am Link  |  Quote  |  Print  |  Notify Moderator

You’re missing the key part of his post
“as long as any investment I made instead of paying cash is at least keeping up with inflation I'm well ahead”.
You’re comparing interest to inflation, he’s comparing interest to ROI. I don’t know about him but the ROI on my investments have beat inflation (and my interest rate) several times over for quit awhile. We are however in new territory now.

* This post was edited 10/29/21 08:21am by an administrator/moderator *

Brandon the Traveler

SC, NY, PA, WV

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Posted: 10/24/21 08:46am Link  |  Quote  |  Print  |  Notify Moderator

Timmo! wrote:



Imo, we are witnessing in the RV industry an excellent example of "market aberration"; aka abnormal conditions.



That's a great assessment which I think is dead on.

The value sites, Nada, Bluebook, etc, recently adjusted RV values in a massive way. To the tune of 30% to as much as 50% higher. They've never done that as long as I've been following them. It's always went down a few percent every so often. At the same time quality went to hell in a hand basket. It's unsustainable but the RV Industry does not care, they're not your friend and could care less about repeat business. It has always been that way and always will.

So you ran out and bought an RV for $50K 3 months ago which you could of easily purchased for $30K 18 months ago. You received the same junk, just paid more for it. Even if you paid cash, when the values get adjusted back to a more realistic level, which they will, you are going to get a good financial screwing. If you financed that purchase long term, your going to get your screwing dry with some sand added in. With the quality I have seen over the last year and a half coming out of Indiana and elsewhere they will not be able to give these turds away two years from now.

Timmo!

South-central Oregon...on the river

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Posted: 10/24/21 09:04am Link  |  Quote  |  Print  |  Notify Moderator

wing_zealot wrote:

You’re missing the key part of his post
“as long as any investment I made instead of paying cash is at least keeping up with inflation I'm well ahead”.
You’re comparing interest to inflation, he’s comparing interest to ROI. I don’t know about him but the ROI on my investments have beat inflation (and my interest rate) several times over for quit awhile. We are however in new territory now.


Yes, if you overpay something today and it is worth more tomorrow, than you are dollars ahead. But, there usually is a day of reckoning, when prices return to "normal" (whatever that means, lol).

Remember that housing bubble we had years ago? Cheap money made overpriced homes affordable, but when home prices retreated back to "normal levels" (mortgage balance now exceeds value of home), what happened? It was cheaper for many homeowners to walk away and start over. Negative ROI?

If one is a savvy investor, your overall portfolio performance should be up (in both up and down markets), but among the winners will be losers; you have a paper loss if not sold--real loss if sold. Savers on the otherhand are being eaten alive when interest rates are well below inflation.

* This post was edited 10/29/21 08:22am by an administrator/moderator *

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