RV Financials, Part 5: RV Resale Expectations and Upgrade Costs
This article is Part 5 of a five-part series of data on what an owner needs to know and understand about buying, trading, and selling an RV.
RV Financials and Seller Expectations
RV Resale and Upgrade Costs
As you can tell by this point, there are so many different things that can affect your potential re-sell or trade value for your RV that you have to first of all take a serious look at what your expectations should be. And if you want to get the highest offer for your RV then you should be prepared to make certain upgrades or acceptable concessions, as necessary to get the best deal.
But always remember that some upgrades will not pay for themselves. So you should select only the appropriate upgrades that fit the expectations of your potential buyer and do not cause your RV to get a lower net price.
Make Smart Decisions on Upgrades for Your RV
If you are going to sell or trade your RV, you will often need to consider making certain upgrades in order to make it worth as much as possible to the potential buyer or dealer.
But when you start considering making such upgrades, you need to understand that upgrading an RV is very similar to what you would do with a house. You need to objectively evaluate which potential investments have a reasonable payback in product value for you.
And in reality, your selection of upgrades will depend on whether you are planning on selling your RV to an individual buyer or trading it with a professional RV dealer, for re-sale.
So, before you try to sell your RV, always, always do your research and get the numbers about its trade-in value, as well as its potential retail value. Then consider what repairs and upgrades you can afford to do while keeping your necessary bottom line price as competitive as possible.
For example, if the tires are still good but obviously worn, and new ones cost $500 each, it might be best to just clean them and the rims, put a little tire black onto them, and if a potential buyer mentions the wear, just accept the fact that your asking price may have to take a hit to close a sale with that potential buyer.
As another example, if your RV engine compartment looks dirty and everything is covered with dust and grime, it will most likely be a good investment ($100?) for someone to steam clean the engine compartment.
Then you should wipe everything in the engine compartment down with a revitalizing cleanser such as Armor-All. These cleansers will make the plastics, metals, and hoses look much newer.
Which Upgrades Are Right for Dealers?
An RV dealer is going to use their book pricing, typically NADA values, in their initial valuation of your trade-in while dealing with you, often never even looking at your unit, for the time being.
Believe it or not, they usually don’t care very much about such things as:
- basic cleanliness inside and out,
- average expected wear and tear,
- and other such cosmetic things one would expect with an RV the same age as yours.
You see, an RV dealership has a team of professionals who are very efficient at cleaning up an RV and even doing quick minor cosmetic repairs on an RV to make it as presentable as possible at a low cost.
But they do care if you try to hide the fact that serious problems exist, such as with the drive train, or any of the major appliances or accessories that might not work properly.
Many times they will make a deal contingent on their inspecting your old unit before the paperwork is finished.
Unless you specified that your trade-in was being traded as being “as is” then they will usually have some fine print in their contract specifying that they can come back on you for compensation to repair certain (hidden) things they might find when they are preparing your unit for re-sale!
They do care about serious problem items such as: non-functional appliances and accessories, worn-out tires, smoking engine exhaust, and any significant body damage. And they will always ask you if you are pet owners and if are you smokers.
Each of these negative points would usually be found during their inspection of your RV, because they use some very experienced inspectors. They know such problems will drive a potential buyer away unless they are fixed.
Odors in Your RV Can Kill a Sale
Two of the worst things that damage a potential RV sale, whether by yourself or a dealer, are the smells that will eventually get into the RV carpet, curtains, ceiling material, and upholstery.
The top two sale-killing odors to find in an RV are the smell of pets and the smell of cigarette smoke.
To date, I don’t know of a cleanser used to hide these odors that doesn’t smell worse than the original problem. So, these odors can, and do, drive a lot of potential buyers away.
Which Upgrades Are Right for Individual Buyers?
You need to prepare for dealing with an individual RV buyer a little differently than you would for a dealer.
These buyers, like you, want to walk up and see a shiny, new-looking RV. Then they want to go inside and see one that looks like it was never, or at least rarely, used.
You might be able to drop your price if the microwave doesn’t work, or if you have older analog TVs in the RV, or if the carpet is clean but worn.
But again, the individual buyer, like you would yourself, is going to question everything his eyes see that looks like it might be a problem. Remember, he is planning on purchasing an RV that he expects to use for years, and it has to look like new to him.
Here are a few tips for preparing your RV for sale to an individual;
- Wash and wax the exterior. If you can’t do it, get a local professional to the job. Your RV must look as good as possible.
- Wash and polish the tires and tire rims, and put tire black on the tires.
- Have a professional steam clean the engine compartment so that it will look as clean and new as possible.
- Clean all hoses, plastics and metals inside your engine compartment with a cleanser like Armor-All to make everything look like new.
- Clean all of the RV windows, inside and out, so the potential buyer gets a clean, clear view through them.
- Make sure that all of the RV lights, both interior and exterior, function properly.
- Open all of the curtains to let as much light into the RV as possible when you are going to show it.
- Shampoo the carpet to get all of the stains out. Even if it’s worn a little, make the carpet look as new and clean as is possible. If there is a badly worn area in the carpet, place a small rug over the area.
- Clean the driver’s seat, passenger seat, chairs and the sofa along with any seat cushions to brighten them up as much as possible.
- If they are torn or badly worn, go online and order some nice-looking fitted seat covers for them. Remember, no buyer wants to have to purchase new furniture for their new RV.
- Clean the stove/range. Make sure it shines and there are absolutely no grease or food stains on it. Make sure it turns on and heats properly.
- Clean the fridge/freezer and be prepared to demonstrate that it works properly. With a two-way fridge design, turn it on the night before showing it, so it will be nice and cold when you show it to a potential buyer.
- Clean the filters in the roof AC units, and clean any dust or stains on your ceiling air ducts.
- Be prepared to demonstrate that the AC cools properly. It should take only five minutes or so before it starts blowing cold air.
- Be prepared to demonstrate that the TVs all work properly, using the roof TV antenna or even the satellite antenna system. This is a real selling point for almost every buyer.
- If the customer makes a serious offer, then be prepared to take them for a drive, to demonstrate that it runs well and handles properly.
- But if they want to drive it, make sure your insurance covers them if there is an accident. Remember, many first-time buyers don’t have a clue how to drive or tow an RV.
Handling Low-Ball Offers and Buyer Tricks
Everyone is looking for a deal: that’s the one basic piece of knowledge you need to understand when you try to sell anything, and selling an RV is no different.
So, don’t get upset, it’s not just you that’s looking for a deal; it’s also the dealership and the individual buyer who will try to low-ball you for the lowest possible price when you start your negotiations.
As Shakespeare would say if he was alive today, “gird yourself” when you start to talk a trade with an RV dealer, or an individual buyer. Don’t be surprised when they come to you with a low offer for your RV and don’t be insulted.
Even though almost all of the dealers and most individual buyers will try to get you to accept the NADA Average Low Retail Value (or lower) for your RV if it’s in good condition, there are some who will even tell you that they only allow wholesale for trade-ins.
Look at this as the starting point in your negotiation process, you have a real task on your hands to get your best price. When you see such low numbers, it’s obvious to you that this dealer (or buyer) has truly low-balled you and they’re hoping you take it. On the other hand, you need to get their offer back up to, or even above that other, more realistic, Average Low Retail price.
Of course, you will be tempted to just walk away, go home, and consider seeing another more realistic dealer or selling your older RV yourself. Your job is to explain the positive attributes of your RV to the dealer or potential buyer, and convince them that your RV is worth much more than what they are offering.
Paperwork Tricks at Closing
But even if you end up with a good deal, you should watch every dealer carefully when they do that final paperwork,
There are some dealerships who might play with the numbers on their final paperwork, adding special fees and other charges that were not part of your agreement, and then presenting them to you in a way that confuses the actual deal.
Always confirm with the sales person that you are talking about an OTD price. That’s an OUT THE DOOR PRICE. Nothing is added and nothing is hidden in such a price and it will be the bottom number on their paperwork.
And dealers are not alone in having their own little financial tricks. Some potential web buyers may also want to low-ball you with their final offer, hoping you don’t have any other option than to accept what they think your RV is worth to them.
Don’t immediately blow them off, but instead start your negotiations with these people trying to get a better offer.
Can This Person Afford Your RV?
Also, you should make sure this potential buyer has a plan to pay for your RV. Many people will tell you they have the cash, but in reality, most will need to go to a bank and get financing on at least part of the sale price.
One note to remember about a buyer who needs financing is the fact that the lending bank will often require that a professional inspector, that they select inspects your RV.
Make sure it’s clear that the buyer pays for such an inspection.
Whichever option the potential buyer tells you he prefers, push them to commit as quickly as possible, and to give you a set date by which they will be able to go to the bank and close the deal.
Too often you can end up dealing with a “dreamer.” Or even worse, a person who acts like he is going to buy an RV, but he's just looking at RVs for his entertainment and always backs out at the last minute.
Look Out for Scammers
It's sad to say, but with the RV market, like so many others, there are people just watching and waiting for the unknowing RV seller who they think they can scam out of some money.
When any potential buyer of your RV mentions they may need to get financing, you should tell them, up front, that your banker demands that you must both sign the papers and close the deal in their presence, after they confirm the money has been processed properly.
This is especially true if you still have a loan on your RV. There are a lot of scammers out there looking for a seller who doesn’t know how to close a financial deal themselves, and they're ready to take advantage of you and your ignorance.
And always remember, as you go through all these sales situations, you the seller or trader want to have that top offer for your RV. Even if it's for no other reason than your opinion that your RV is the greatest one on the market. So you should never listen to anyone who tells you your vehicle isn't worth what you have looked up as an appropriate price.
Time on the Market Is Critical to Your Sale
So let’s assume you did everything you were supposed to do. You did your pricing research, you took your high-quality pictures, you cleaned up your old RV, and you placed it on the market. Then, you happily sat back and waited for the calls to come in. And you waited. And you waited.
So, there you are, with no one contacting you for weeks about your RV.
Maybe you even had one of your friends who called you after he had his on the market for just a few weeks and let you know he had received an offer on his RV in just two weeks. You hang up and think: “Here I am. A full month has gone by without anyone calling me."
In fact, you haven’t heard from anyone who might even be slightly interested in your RV. Panic slowly sets in and you even go back and reevaluate your all of your numbers, wondering if you have the right asking price.
But your numbers probably still look good. Your RV is a very popular model, and your asking price is realistically placed to make it a decent value for any buyer. So again, you think: “What’s wrong?"
Actually, this happens a lot. You just need to do the thing that no one likes to do, and that’s the hardest thing of all to do quietly: you just wait.
Selling your RV at a reasonable (or even great) price can take time, and it’s not unusual for one to stay on the market for months before you get a good lead with a realistic offer.
RVs are unique forms of entertainment for people. They often cost a lot of money, and the actual potential market is small when compared to that of an automobile.
So, as time goes by and you watch your RV value drop every month and continue to worry about how to actually sell your RV, you really only have two options:
- You hold on and keep waiting for a sale, or
- You drop your price, hoping it catches a watcher's eye.
Sorry, but that’s the reality of selling an RV in today’s world. You need to do everything properly to advertise your RV and make it as enticing as you can. But, everyone has to eventually just sit and wait.
Even with all of this advice on things you can do, all I can say to you is, GOOD LUCK!
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
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© 2016 Don Bobbitt