Could this be the "Dirty Little Secret" of RVs?

[Roadtrek 1]

How hard is it to really sell your coach? 

What do you think about this recent article online?    

See this link, 

https://axleaddict.com/rvs/An-Important-Insider-Warning-for-RV-Consumers

 

[pjstough]

People who dont manage money or risk very well, will, no doubt, have money problems whether they ever buy an RV or not.

[Roadtrek 1]

51 minutes ago, pjstough said:

People who dont manage money or risk very well, will, no doubt, have money problems whether they ever buy an RV or not.

Understood... but, this article has a lot more points.... supply and demand ... number of units for sale .... etc.

My particular RV sold in 2012 for $114,000 base price... however, the same RV in 2017 sold for close to $140,000.....

Look at the price drop of the new Tesla cars...$40,000 price cut...

I suppose that a sudden increase or decrease in the price of a commodity definitely affects the used market.? 

[NatAngell]

and, people will only look at how much per month. Buy a new RV no matter what size, form or cost and the dealer will tell you it is X dollars per month. Now being a fairly savvy buyer ,I buy at 68% of MSRP and keep it for 5 years and want to sell it. I offer it for a very reasonable price but the buyer for a 5 year old unit doesn't typically have the x thousand dollarsso if the dealer tells them he can put them in a brand new unit for x dollars per month guess which route they are going to go. It leaves me trying to sell a used unit, because the dealer won't allow me anything for mine anf the young couple that just bought the new one are way upside down in theirs before thet leave the lot

 

[pjstough]

13 minutes ago, Roadtrek 1 said:

Understood... but, this article has a lot more points.... supply and demand ... number of units for sale .... etc.

My particular RV sold in 2012 for $114,000 base price... however, the same RV in 2017 sold for close to $140,000.....

Look at the price drop of the new Tesla cars...$40,000 price cut...

I suppose that a sudden increase or decrease in the price of a commodity definitely affects the used market.? 

Certainly supply and demand have an impact on prices of RVs, just as they do on houses, but that is part of the risk, and needs to be assessed before buying in the first place.

[Darryl&Rita]

Nothing really new, or eye opening in the article. RV's are not an investment.

[sandsys]

The sky is falling! The sky is falling!

[Kirk W]

2 hours ago, Darryl&Rita said:

Nothing really new, or eye opening in the article. RV's are not an investment.

I agree that this has happened and it does happen but it isn't common. I have been around RV people for more than a few years and have only known of 2 cases of what he describes. I have known several more who have had to come up with money as the difference between the loan principal and the selling price as well. I think that is more common than most realize. 

21 minutes ago, sandsys said:

The sky is falling! The sky is falling!

👍

[Barbaraok]

3 hours ago, Roadtrek 1 said:

My particular RV sold in 2012 for $114,000 base price... however, the same RV in 2017 sold for close to $140,000.....

And there was absolutely no change in the models over the years?  Everything exactly the same?  Labor stayed the same.  Cost of materials?  Demand for product?  

 

[Ray,IN]

What do people expect when they are buying a deprecating asset? Then again, perhaps they do not know the definition of a deprecating asset.

[Smitty77_7]

While I'm sympathetic to those who find themselves in a position similar to the one where the spouse died... I also feel that people have responsibility for their own decisions. Not trying to kick someone when they're down, but all kinds of bad decisions in the example used in this story. And as mentioned, RV's are like Boats - where they're a depreciating asset the bulk of the time... 

Bad decisions by others, frequently get added to all our overheard costs, due to bad debt. 

And a big thanks to so many of you on this board, a few who have posted in this thread. As I received decades of experience input from so many Escapees - as my DW and I were retirement planning. Having an exit strategy was one of the key items I picked up, and added to our yearly review (We have two or three scenarios mapped out, based upon various situations that may occur over the years. We review these yearly.) 

And the decision we made upfront, was that we would not count any of the funds 'invested for fun of life usage' in our RV, towards out Exit Routine's... If we could not pencil things out to do so, we'd either buy lower costs units, or not do it at all:)! 

So many thanks to this board for so many of your's input and Burn as you Learn experiences:)!

Best to all,

Smitty

 

 

[Roadtrek 1]

3 hours ago, Barbaraok said:

And there was absolutely no change in the models over the years?  Everything exactly the same?  Labor stayed the same.  Cost of materials?  Demand for product?  

 

Yes, pretty much everything is the same... especially for the RS Adventurous model... maybe different seats... same layout....

I looked at the 2017 model brand new at the local dealership...price $152,000..and it didn't have solar panels or the proximity sensors.   Mine had those features plus the upgraded satellite navigation, Android Auto and extra cameras....  

Look... I paid $79,000 plus sales tax.. it's true mine had 26,000 miles... the 2017 model had 2,500 miles.....  Where's the value of paying the extra money for a brand new one?   Especially now that the warranty is gone.... Roadtrek is out of business.

Probably was extra cost for labor, inflation or maybe they underpriced their product....

Both are on the Sprinter 3500 170 inch chassis with the dual wheels....

[Roadtrek 1]

4 hours ago, Kirk W said:

I agree that this has happened and it does happen but it isn't common. I have been around RV people for more than a few years and have only known of 2 cases of what he describes. I have known several more who have had to come up with money as the difference between the loan principal and the selling price as well. I think that is more common than most realize. 

👍

Kirk, may I remind you that I didn't write the article about the warning to prospective buyers....of course you have heard of instances like that... but, what evidence do you actually have that isn't pervasive.? 

Regarding the article... yes.. I believe it..... financing an RV is an economic disaster... plain and simple....As I said before...the schedule of payments over 20 years... which is what I originally planned was an extra $57,000.....by the end of the first 10 years... I would easily been upside down on the loan to value...I'm surprised you can't see that. I don't know... maybe you do? 

In the article...she pointed out that this couple purchased an RV brand new for around $187,000 in 2005...and today 14 years later it's worth $39,000.... I wonder if they even paid off the payments?    That's a lot of money down the drain... just like rent on an apartment...

Yes... houses are certainly expensive, but, they go UP in value not down.

In another post someone asked me.. what kind of return on your investment have you got....you were foolish to pay off the RV...and  you could have used that as an opportunity cost to make more than the 6 percent you're saving..... REALLY??

How about 600 percent increase in value over 36 years... that's almost 17 percent every year....

4 hours ago, Kirk W said:

I have known several more who have had to come up with money as the difference between the loan principal and the selling price as well. I think that is more common than most realize

  That's money right out of their savings?   Or from somewhere? 

How is this different from paying off the loan early and saving the interest payments? 

[Kirk W]

13 hours ago, Barbaraok said:

And there was absolutely no change in the models over the years?  Everything exactly the same?  Labor stayed the same.  Cost of materials?  Demand for product?  

1

As well as average annual incomes and lots of other economic factors?

12 hours ago, Smitty77_7 said:

Having an exit strategy was one of the key items I picked up, and added to our yearly review (We have two or three scenarios mapped out, based upon various situations that may occur over the years.

1

It is just one of the parts of money management. Some practice it and others do not. Some people will learn from others while some just never learn. Most of us come here to share experiences and knowledge and to learn from each other, while others come to argue and criticize. I try to learn something from all who contribute to the forums, even if I don't agree with them. 

[FL-JOE]

9 hours ago, Roadtrek 1 said:

Kirk, may I remind you that I didn't write the article about the warning to prospective buyers....of course you have heard of instances like that... but, what evidence do you actually have that isn't pervasive.? 

Regarding the article... yes.. I believe it..... financing an RV is an economic disaster... plain and simple....As I said before...the schedule of payments over 20 years... which is what I originally planned was an extra $57,000.....by the end of the first 10 years... I would easily been upside down on the loan to value...I'm surprised you can't see that. I don't know... maybe you do? 

In the article...she pointed out that this couple purchased an RV brand new for around $187,000 in 2005...and today 14 years later it's worth $39,000.... I wonder if they even paid off the payments?    That's a lot of money down the drain... just like rent on an apartment...

Yes... houses are certainly expensive, but, they go UP in value not down.

In another post someone asked me.. what kind of return on your investment have you got....you were foolish to pay off the RV...and  you could have used that as an opportunity cost to make more than the 6 percent you're saving..... REALLY??

How about 600 percent increase in value over 36 years... that's almost 17 percent every year....

  That's money right out of their savings?   Or from somewhere? 

How is this different from paying off the loan early and saving the interest payments? 

It would be hard for me to believe that anyone who would sell their home and invest all their money into an RV would be foolish to think they had just made a good financial decision.  If someone is purchasing a new RV with a MSRP of $150,000 then they had better be able to get the deal down to around $95,000 to $100,000, plus put down around $40,000.  If they don't then of course they will soon be upside down on that RV if financing long term.

What about full timing folks who used to pay $1,000 or $1,100 a month just in property taxes when they had a sticknbrick.  You can have your house paid off but it can still cost you a considerable amount of money each year.

Here is the simple truth of why some people will dump money into RVs and run all over the country exploring and some will sit in their sticknbrick and wait for the grandkids to stop by for a visit.   To some people it is very important to accumulate money and for some they understand the clock is ticking and you can't take it with you.   We try not to be foolish with our finances, but the time for "planning for our future" has come and gone.  It is time to enjoy what we worked for and what our investments have yielded.   

[DJohns]

I know this is against the grain of most people but DO NOT finance  ( pay interest) on a depreciating asset. you will sleep way better at night.

[noteven]

Do houses go up in value or does money go down in buying power over the years?

[D&J]

1 hour ago, Dan Johnson said:

I know this is against the grain of most people but DO NOT finance  ( pay interest) on a depreciating asset. you will sleep way better at night.

2X

Denny 

[TXiceman]

Like others have said, too many get into RVing with starry eyes, minimum down payment, long term loan and lowest payments.  They never look at the total cost of the loan.  Inexperience or lack of education"  I do't know.

The 5er we now have is financed for a very simple reason.  We got a loan for less interest than the investments are making.  We could have easily moved some funds and paid for it, but it is cheaper to finance.  Plus our credit score went up for having a hard money load.  Without any owed money, our credit score dropped and as a result our insurance rated went up.  Better credit score, rates went down.

Another issue is people do not plan for repairs on the RV...tires, brakes, roof repairs, engine, transmission, etc.  I know of one fellow that I have lost touch with now had a nice diesel pusher.  He was traveling and having a great time and while out west, had a major engine problem and no funds for an expensive repair.  So there he sat in an RV park and no way to move or repair the motorhome.

Another snowbird we met, had to go back to work for 6 months to make enough to cover an engine replacement in his diesel truck.

So a lot of issues are lack of money handling or finance experience and lack of planning for the life.  Full timing in an RV can be less expensive, but you need to plan around a depreciating assets and its repairs.

 

Ken

[Roadtrek 1]

3 hours ago, noteven said:

Do houses go up in value or does money go down in buying power over the years?

"NO.....do you see how fast I answered your question?

It's all about location, location, location..... different areas command higher prices and you can get a lot more house in a rural area or depressed city.

[Roadtrek 1]

3 hours ago, D&J said:

2X

Denny 

If you can..it's a good idea.   As I said before ...I would have paid 66 percent more by paying over time.

[Lou Schneider]

3 hours ago, noteven said:

Do houses go up in value or does money go down in buying power over the years?

Usually older houses in a given area sell for less than an equivilent new house plus improvements (landscaping, etc.) so I'd go with the latter.

The "Dirty Little Secret" of home ownership? 

[Roadtrek 1]

1 minute ago, Lou Schneider said:

Usually older houses in a given area sell for less than an equivilent new house plus improvements (landscaping, etc.) so I'd go with the latter.

The "Dirty Little Secret" of home ownership? 

Lou...yes, it's true... new houses usually do net more money... however, you have to consider the location...

Crime is one of the biggest "killers" of home value...no one wants to live in a crime ridden neighborhood.   Also, the lack of services, medical care, schools and transportation ....it's a very complicated picture.

[2gypsies]

5 hours ago, FL-JOE said:

Here is the simple truth of why some people will dump money into RVs and run all over the country exploring and some will sit in their sticknbrick and wait for the grandkids to stop by for a visit.   To some people it is very important to accumulate money and for some they understand the clock is ticking and you can't take it with you.   We try not to be foolish with our finances, but the time for "planning for our future" has come and gone.  It is time to enjoy what we worked for and what our investments have yielded.   

Excellent!!

[Roadtrek 1]

21 minutes ago, 2gypsies said:

Excellent!!

It's all about the "lifestyle".