An Important Insider Warning for RV Consumers
As many of you who read my articles know that I not only have been an RV enthusiast for more than 50 years, I also have sold travel units and am friends with others who still do.
I also have made it my business when doing my research to talk to sales people, parts dealers and mechanics about current trends within the recreational vehicle business.
As a result, I am seeing issues within the industry that are badly damaging consumers.
Today, the average guy who wants to own a unit is
- paying much more than in the past,
- getting less for his money and
- finding later that selling his coach 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.
A Hidden Problem
For several years now, this issue has mostly been hidden.
However, as time has passed, it has become evident that many people who purchased over priced and poorly constructed RVs are now facing financial ruin.
If you don’t believe this is happening, do some Google searches to see what’s on the market.
What you will find is a bevy of coaches that are for sale at unrealistically high prices, many of which have been on the market for years and keep depreciating and deteriorating while awaiting buyers.
How This Happens
It used to be common for people to start camping in tents, then move up to fold out trailers or pull trailers and eventually to motorized units.
By doing this, they were able to learn the pros and cons as they went so that they could make good buying decisions.
Today, however, the public has been hyped into starting their RV adventures with large fifth wheels or motor homes.
These units promise luxuries buyers think they need, and manufacturers are happy to provide them.
However, they do so at prices that are far more than they are worth.
The Pricing Spiral
As new prices rise, so do those of previously owned coaches.
The result of this upward pricing spiral is that people who used to be able to purchase a 6 year old luxury coach for about half the price of a new one, now will pay that same amount of money for one that is 12 or more years old!
This is a bad deal for buyers.
A coach that old has generally deteriorated and depreciated to the point that it’s true value is far less than its asking price.
It may look great, but buyers should remember that it now has 12 or more years of normal wear and tear on its appliances, furniture, wiring, tires, chassis, engine, generator, inverter and other systems.
On the surface, buying it may seem to be a smart move because the unit looks good and is affordable, but when it comes time to trade or sell it, you’re going to have problems.
Newer RV Selling Problems
Few consumers ever think about selling something when they are in the process of buying it, but when it comes to recreational vehicles, this becomes an important issue, especially if you paid a good deal of money for the coach you now own.
If you purchased a new unit, you paid top dollar for it. You probably also financed it, which means you also are paying interest on your loan.
Since the biggest depreciation occurs in the first year of ownership, your RV is almost immediately worth far less than what you paid. Worse yet is the fact that the longer you own it, the less it is worth.
The result is that you soon owe more than what your vehicle is worth.
- You may think a potential buyer will pay off your loan, but this will never happen because he won’t want to pay more than the coach is worth.
- A dealer may be willing to buy it from you, but he will only give you half of what your coach is worth. He may also be willing to trade, but to get him to do this you’ll have to buy another coach that is worth more than the one you are trading for because dealers never “trade down”.
In the end, you will find that you will either be stuck with your purchase or will have to take a major financial loss in order to sell it.
Older RV Selling Problems
If you purchased a much older RV, selling it will be somewhat easier because it will already have mostly depreciated by the time you bought it.
However, if you financed it, you will need to pay off your loan so that you can have a clear title.
Furthermore, you’ll run into the same selling problems as those mentioned above, except for the fact that your buyer may have problems finding a bank that will finance his purchase.
The good news is that you paid less, so you will lose less. However, selling will be tough unless you can find a cash buyer.
Even at a lower price point of $20,000 or less, few people have enough cash to make a buy.
The RV marketplace has become glutted with units that sit languishing and vacant while awaiting buyers that may never show up.
There Is No Easy Answer
The ugly truth is that it does not matter whether you decide to purchase a new or pre-owned coach because selling or trading it is going to cost you a good deal of money unless you get lucky.
It’s also going to be difficult to do because
- the market is now glutted with recreational vehicles people have not been able to sell,
- dealers no longer have to negotiate because they know they’re in a “seller’s market” and
- they now concentrate on selling the most expensive units, which leaves consumers little choice in terms of what they spend to buy.
These Warnings Are Real
The whole point of what I’ve discussed here is to warn consumers that they need to pay close attention to what they are doing before they make a purchase, because the dream they buy can easily turn into a financial nightmare when it comes time to sell.
You never want to become the person who
- is never able to find an affordable travel unit,
- can never sell the one you already own or
- loses thousands of dollars because you did not understand the problems associated with RV ownership before purchasing your coach.
How to Avoid The Worst of These Problems
Only a very astute individual will be able to sidestep the pitfalls I mentioned here. Even then, there will be financial losses at the point of sale, but at least they will be minimal.
The trick is to
Make sure that you purchase a coach that
- is in excellent condition,
- you plan to keep for many years,
- meets both your present and future needs and
- is affordable.
You will do better in the long run if you give up some of the excess luxuries, buy as low as possible and pay cash if possible.
Finding a unit like this will not be easy, so you should plan on spending a great deal of time searching and analyzing.
In the end, you may lose a few thousand dollars when you sell, but that will be much better than losing tens of thousands of dollars.
Remember that once you buy an RV, you own it...possibly forever!
Don’t Buy the Hype
Salesmen and dealerships want you to think that everybody is buying the most expensive new and used RVs. They finance them for you to make things easy and offer perks to make you think you’re getting a good deal.
Just remember that once you sign your contract, you own your vehicle.
Whatever problems come with it will be yours alone.
- You should remember, too, that in most cases what you buy is a vehicle that you probably will only use one or two months out of each year whose purpose is to take you from one spot to another.
- Since you use it temporarily, you don't need all the fancy amenities and can be very comfortable without them.
If you heed the warnings and information discussed here, you can consider yourself to be an informed consumer who will be able to buy today with an eye to the future and thus protect yourself financially.