Why Selling Your RV Can Be a Big Problem
There was a time when people who owned campers, motor homes and travel trailers found it easy to sell their units, but this is no longer the case.
Many are left owning coaches they no longer need, want or can afford to own and purely because of buyer ignorance about the recreational vehicle marketplace.
The RV industry has chosen to remain silent about this issue because to address it would mean reduced income. They feel that it is better for consumers to face financial catastrophe than for them to suffer reduced profits.
However, they are well aware of how the game is played and that many who purchase their products will eventually find themselves in financial trouble simply because they were not aware of the rules!
A Financial Disaster Waiting to Happen
The underlying problem is that buyers are
- paying much more than in the past,
- getting less for their money and
- finding later that selling is almost impossible.
As a result there are thousands of beautiful motor homes, campers and travel trailers sitting vacant while their owners desperately try to figure out how to save themselves financially.
They are upside down on their RV loans, don't understand valuation and think they can recoup by asking unreasonably high prices for their units.
These RVs sit for years and keep depreciating and deteriorating while their owners keep hoping that someone will buy them.
Many never get sold, and the financial losses to their owners are staggering.
How Does It Get to This Point?
The basic story of how people end up owning RVs they cannot sell is always the same.
A couple decides to buy a recreational vehicle for living or travel that they can enjoy during their early retirement years.
- Some sell their homes to pay for their coaches.
- Others borrow money to cover these costs.
In most cases they pay upwards of $100,000 because they want luxury and have found the means to obtain it.
They rarely understand the real costs involved in RV ownership, but they just keep paying because that's what you do when you own a recreational vehicle!
All goes well until tragedy strikes..
- It can come in the form of an accident, illness or death.
- It may also show up as a major financial loss.
- Sometimes it may simply be the result of old age setting in.
Whatever the case, the tragedy that has taken place makes the couple (or the remaining spouse) realize that it’s time to sell the travel unit.
What they don’t understand is that they most likely will not be able to do so for one or more of these reasons:
- They owe more for it than it is worth because they paid too much for it to begin with.
- Banks rarely finance older RVs.
- There is too much competition from others who also need to sell.
- Their coach is outdated.
- It has unpopular features that are known to cause expensive problems.
- They can't afford to sell it!
A Sad Real Life Example
In 2005 a couple purchased a motor home that cost $187,000 when new. They sold their home to help pay for the coach, which today is worth $39,900. They financed the balance and used the rest of their home equity to help pay their retirement living expenses.
Towards the end of year 14, the couple decided to sell the RV. Because they assumed this would happen fairly quickly, they went ahead and purchased a home and spent the rest of their cash ($30,000) on upgrades.
Three months after they moved into their home, the husband died.
The new widow
- lost a good deal of her income due to her husband's passing,
- now pays several thousand dollars a year to own and store her RV,
- does not have enough money to cover the difference between what she owes on her travel unit and what someone would be willing to pay her for it,
- has no home equity from which she can borrow,
- will not be able to refinance her RV loan for the difference that will be due and
- no potential buyer will be able to find financing, either.
Furthermore, the coach has issues that are serious enough to cause a savvy buyer (if she can even find one) to offer her much less than the estimated value.
In short, due to unforeseen circumstances and some very poor mistakes in judgement, this woman now owns a recreational vehicle that she can neither afford to sell or keep!
Sad as it is, her story is not unusual.
Buying an RV is much easier than selling one.
How to Keep This from Happening to You
Having read all that has been written here, the lesson should be clear, but here it is in black and white.
The worst RV buying mistake ever is to purchase a travel unit that costs more than you will be able to afford to pay if problems occur down the road.
The story I just shared with you is a common one. The details may vary from one person to the next, but the bottom line is that to protect yourself, you need to be extremely careful about how much you pay to buy any coach.
Not only does their value drop quickly, but they are all expensive to maintain, store, travel and live in.
You should research the costs involved in these issues long before you make the mistake of purchasing an RV you may not be able to afford down the road.
To do otherwise is to make the worst RV buying mistake ever.
Where many unsold RVs end up: a Recreational Vehicle Auction
Has this article made you think twice about buying a recreational vehicle?
© 2016 TIMETRAVELER2