Thinking of trading your RV? Consider THIS before you do…

RV Trading Tips… Thinking of trading in or selling your RV?

rv trade in tips
Think its time to trade in your trailer? Here are some helpful “RV Trade in tips”

In addition to being a full time traveler (with a NEW 5th wheel soon!!), I spend my summers consulting and selling RV’s. I often approach folks with the following – “How can I help you lighten your wallet, put you in debt for years to come, and sell you something that will do nothing but depreciate from the moment it leaves the lot?”

Truth? You bet! RV’s – virtually ALL of ’em are NOT a financial investment – instead they are an investment in lifestyle, quality time with the family, quality experiences, etc. Agreed? Oh, and most folks laugh, but then contemplate it and say “you’re right!”

So, knowing you’re buying something that IS going to depreciate (but you WILL have lots of fun as it does), is there a better (or worse) time to trade it in?

Fact: The average rv’er keeps their rig for 3-5 years. Does it matter whether you trade closer to 3 or 5 years? TIMING is everything. Consider my thoughts in the following brief video…

There are better – and worse times to trade your RV

Join me in this brief video as I set the stage – then below I clarify the example I discuss in my video

Lets consider the example I offered in the video:  (take your time with this!!)

Original purchase price: $35,000, then you decide to trade your RV in after about 2 years…

NADA Avg. Retail value after 2 years on your trailer: $23,000 (real value to the dealer: $14,000*)

You want to trade your 2 year old trailer for a new one – lets say the new one is $60,000. (retail price.) You know the NADA avg. retail on yours is 23,000 and you’re not happy that its already 12,000 less than what you paid just 2 years earlier (and you REALLY don’t want to hear its actually worth 14,000 to the dealer!!) AND since you’ve paid mostly just interest, you still owe the lender $33,000.

So here is what happens when you try to work a trade on your current 2 year old RV…

You visit a dealer, see a shiny, new, featured laden RV that “stickers” (MSRP) for $60,000. Without a trade, the dealer may offer you that 60,000. trailer for 51,000. as a purchase price (perhaps even better.)

BUT… with your trade, he “shows you” 23,000. for the trade – but he does it against the $60,000. price, and asks you for a difference of 60,000 – 23,000 = 37,000. to get the new trailer.

BUT remember, you still owe 33,000. on your original loan (remember – you did a $0. down loan!), so now, your new loan will be for the 37,000 difference noted above and the 33,000 you currently owe, or in other words, you’ll be carrying a loan for $70,000. which can’t work because the new trailer retails for… $60,000. so thats the most you will get a loan for. To get the trailer for a 60,000. loan, you’ll have to come up with 10,000 cash! THIS is why when you trade with a high balance due (and a low NADA book value), you HAVE to step up to a MUCH more expensive trailer! And… you end up carrying a BIG “note” on that new trailer.

You’d better be happy with that new trailer for SEVERAL years to come as you pay down your new loan!!

*Note: If you take 23,000 (retail for your trade) and subtract 14,000 (real or wholesale value for your trailer), this yields $9,000. If you think that is the profit the dealer will make on your trade, think again! The dealer has costs – in addition to basic overhead and salaries/commissions, your trade (by law) must be (at a minimum) “safety checked” and many dealers will execute additional repairs before selling it to the next buyer. Further, the longer your tradein sits on the dealers lot (sometimes YEARS), it is continually depreciating. So, while some trades result in good profit for a dealer, others see the profit fade away as potential buyers (for whatever reason) fail to purchase it. This is the risk the dealer takes and a good part of the reason he won’t offer you anywhere near the 23,000. that NADA shows as the “average retail” value for your 2 year old trailer.

Ok, when it comes to trading in your older RV, two thoughts…

  1. If you do want to get rid of a “recent purchase” (lets say up to 3 years old), you’re likely to be better off selling it yourself than trading it – you’ll get closer to the NADA average retail value. To advertise your trailer, you will find several free resources to advertise it including Facebook classified groups for your area and classified groups for those who like a particular type of RV (5th wheels, Class B Motorhomes…) Additionally, Craigslist offers free advertising (be careful of scams – read their advice on their own site.) Lastly, RV Trader (.com) and “RVT” are both worth considering, RVT is free, but RV Trader will charge you about $60 for 12 weeks.
  2. If you are can live with your RV longer, by years 4 or 5, you’ll be in better shape with your loan as you’ll have paid down more of the principle AND the depreciation rate slows after year 3. As such you will be in a far better negotiating position with the dealer that has the new RV of your dreams!
rv trading tips
If you bought it then… its probably safe to trade your RV in now!

Does all of the above make sense? If not, ASK ME BELOW – or – post in my Facebook group and if you can identify where I lost you.

Hey, while you’re here, my earlier two posts on these lines can be found HERE: Summer 2017 Reflections and The REAL cost of a RV loan (and how to reduce it).

Lastly, as I write this, I’m about to “hit the road” to begin my journey west to Oregon and Idaho. I’m CERTAIN to have some stories for you – stay tuned. While you’re here, have a look at some of my other articles. RV Across America is broken down into 9 broad categories and from the home page, you can find these along with recent and popular articles. Enjoy – and please DO keep in touch. You can join our mailing list (look above or below) for a place to enter your first name & email address.

FYI, Links to related articles can be found below…

 

 

12 thoughts on “Thinking of trading your RV? Consider THIS before you do…

  1. What is the oldest Class A, either diesel or gas, you would buy? For example, it is currently 10/2017, would you consider a high end diesel pusher built in 2001?.

    Thanks

    • Probably about a 2000. BUT – I’d get as much of an extended service contract (which I can get you a quote on) to cover repairs that can be costly.

  2. I think the math is a little off: $60,000 (new rv) – $23,000 (trade in) = $37,000. $37,000 (what is left over on new rv after trade) + $33,000 (left on original loan) = $70,000. Now you are carrying a $70K note on your new MSRP $60K RV. Not best of ideals.

  3. Loved your piece ..we have seen couples do this time and time again…usually at or around six months ..and we just shake our head?? Brand new Diesel Trucks and Fifth Wheels being traded in on new ‘Coaches’ I was in the car business most of my life and as far as I can see the RV business was very similar …These people that I am referring to had just come off some huge retirements, and life insurance benefits …guess maybe I am jealous deep down but cannot believe the beating they must have taken in these transactions..we currently OWN a 1999 Ford F350 7.3 diesel and a 2009 Keystone Laredo 265 Fifth Wheel..key word here is OWN..first six years we had the luxury of heated indoor storage, and now winter in Florida, upon return in the spring to Michigan we keep her in covered storage…Enjoyed your video but we are owners just watching what you are too LoL..

  4. I want to sale or trade I have a bad credit I think I want something easy I have 1994 truck with a newer camper but it needs TLC and it’s got come alongs have holding it on the truck should be on a 3/ quarter ton want do you as suggest. Thanks Brenda Degeyter

  5. I’m really hating all dealers for RVs or autos. Last year I bought a used 2011 Heartland Elkridge 27RLSS 5th wheel. Dealer firm on $24K. NADA inline says $14.5K to $20K. Lender says $24 is good according to THEIR NADA book. I’m wanting to but a new 2018 E293. MSRP $40K. Selling at $30,300. Out of the kindness of their awesome heart they will give me $8K for my trade in. Right now online NADA says my trailer is worth $14.7K to $17.7K. Guess I am going to sell myself.

    • Jim, May I be brutally honest and frank? Can ya handle it? 🙂

      Allow me to “school” you on the facts of life: First, dealers are simply doing what they do – they buy at wholesale and sell at retail. Now, if the dealer wanted 24k and NADA online said $20k is the ‘average retail’, WHY did you buy it? I trust that the dealer was not holding a gun to your head, right?! (By the way – Elkridge, after selling it for the past 3 years is TRULY nothing special. I’d FAR more recommend buying a USED trailer like an Arctic Fox over a new Elkridge.

      Now… you tell me you want to REPEAT your mistake (I hope I’m not being too rough on you here, but I gotta be real!) You want a E293 – well, the dealer has dropped their price from 40 to 30k… thats a VERY fair price. Now you have a trade – NADA says its worth about 17,700. Look at it this way – you are asking them to take your trailer on trade, and they NEED to buy it at a below wholesale price. So, 8k is about right in this case (again – remember they’ve already discounted the new trailer) Why? 3 reasons – 1) they have overhead and they’re there to make a profit 2) they (by law) have to pay service techs to check & often fix trades 3) it may very well sit for weeks/months (even YEARS) and all the meantime, it is DEPRECIATING. So, only in a perfect world will they turn it next week for close to 17,700! (and rarely do they get OVER nada book).

      Selling it yourself WILL likely net you about 15,000. so, yes, you’ll come out ahead, THEN, honestly don’t buy another Elkridge! Have you looked at Arctic Fox? Perhaps the 29-5K or 29-5L – and perhaps a 2012 to 2015 model will fit in your price range of 30,000. But realize, those who are “in the know” will scoop these up when they come available so they’re hard to negotiate on. Yeah, they’re THAT good.

      By the way, if you had come to me in my store with the same scenario – I’d give you $18k for your trade BUT I’d charge $40k for the trailer – if you do the math – its the SAME thing as your dealer is offering you.

      Al

  6. It all comes down to greed. My trade in was a 2014 Cruiser RV. got $16K ($1K under low book) they turned around and sold it for $24K. More than I paid new for it. The Arctic Fox is OK but not liking the floor plan. At $60K it’s much more than I want to pay. Dry weight is a lot more than the Elkridge.

    • Jim,

      As I stated before, you can get an Arctic Fox for far less than 60k if you buy a used one – which I would encourage you to do instead of buying a mediocre (at best) trailer. As to what the dealer got on your trade – if it worked out well for them, good for them! No one forced you to trade it in to them, and for every deal that works out well for them, there are others that do not as I explained previously. As to dry weight – the elkridge is light for a reason – it is built to MINIMAL standards whereas the Arctic Fox is WELL built. So, yeah, its heavier! Al

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