Considering RV Living After Being Priced Out of Housing

[Kittykamper]

Thanks, Gary. Your post contained a lot of very good points and things to consider. As you mentioned, renting an RV would be a very good next step, rather than leaping head-first into a large investment.

 

[Kirk]

renting an RV would be a very good next step, rather than leaping head-first into a large investment.

In addition to what Gary just told you, it is very important to realize that while buying a house is an investment, buying an RV is not. Most RVs will depreciate at a rate of about 10% per year to some minimal value and then stabilize to a factor of condition and depreciate very slowly. That begins after 10 or 15 years in most cases. We bought a new class A and kept it for 14 years, living in it as our only home for 12 of them. When I sold it I got back a little more than 10% of original cost. But that was also based on a purchase with a lot of experience in RVs behind me and a lot of hard bargaining over several states and paying significantly less than the dealer's asking price. You can save money by purchasing used but that can be tricky for an inexperienced person.

 

[Kittykamper]

In addition to what Gary just told you, it is very important to realize that while buying a house is an investment, buying an RV is not. Most RVs will depreciate at a rate of about 10% per year to some minimal value and then stabilize to a factor of condition and depreciate very slowly. We bought a new class A and kept it for 14 years, living in it as our only home for 12 of them. When I sold it I got back a little more than 10% of original cost. But that was also based on a purchase with a lot of experience in RVs behind me and a lot of hard bargaining over several states and paying significantly less than the dealer's asking price. You can save money by purchasing used but that can be tricky for an inexperienced person.

So true, Kirk. And boy it sure stings selling something for so much less than we paid for it! I’m very familiar with that sting! You do remind me of something I was curious about. Is there the same style of “haggling” involved when buying a new RV as when you’re buying a car? Does the salesman disappear from the office to go ask his boss while you sit there in the chair with sweaty palms and armpits?

 

[Kirk]

There are parts of it that are very much the same way, but RV dealers that sell the same brands are usually at least 100 miles apart, so it is very difficult to make them compete and comparing different brands and models is very difficult, even for the experienced buyer. The salespeople work for a commission and the more that they get you to pay, the more money they make on the sale. The typical dealership then sends the buyer into the office to close the deal and you again have to defend yourself with a fellow who gets a commission on the things that he gets added into the sale like special coatings and fabric protection, extended warranties, and several other items. If you have good credit, it is usually better to arrange your own financing before you buy the RV.

 

[Derby6]

So true, Kirk. And boy it sure stings selling something for so much less than we paid for it! I’m very familiar with that sting! You do remind me of something I was curious about. Is there the same style of “haggling” involved when buying a new RV as when you’re buying a car? Does the salesman disappear from the office to go ask his boss while you sit there in the chair with sweaty palms and armpits?

In my experience--Cars/Trucks there is less “haggling”--May come off the sticker price a little bit but not like the old days.
But when I bought my trailer, we ended to getting it 29% less than the sticker. From what I understand this is not uncommon...

This is NEW vehicles/RV's I reffering to.

 

[Mark_K5LXP]

If you're at a price point you're haggling with salesmen, you can afford a house. The 'value' priced RV's are cash and carry from classifieds. You're not turning a fiberglass or aluminum skin R2 insulated box into an arctic rated home I don't care what you stuff in the windows or skirt it with. It's one thing to pull this off for a week or two, but any more and you're going to be battling keeping the thing heated, plumbing from freezing, damage from condensation and general extended periods of discomfort. Running an RV is a nonstop job under normal conditions. For a couple weeks at a time on vacation it's a distraction. 52 weeks a year it's a job. Throw in it's a space the size of a tuff shed and you have to really, really want to make this work. The novelty wears off quickly. People that pull this off isn't because they live a little frugally or are handy with tools. It's a daily slog that takes constant work and attention. So any economy realized will be hard fought, I would offer an effort better put into a more lasting solution. If it were a choice between a camper and homeless then your hand is dealt. But if you have any means at all there are better choices.

Mark B.
Albuquerque, NM

 

[Gary RV_Wizard]

The MSRP on an RV is pure fiction from the manufacturer and there is no "Monroney" law that even requires it to be disclosed. It's common at some dealerships to create their own inflated "list price", perhaps including dealer options or maybe just an inflated value. . Nor are RV dealers subject to many of the franchise constraints that dictate how car dealers do business. The RV manufacturer has almost no control over the dealer. For example, the only dealer who has to honor your warranty is the dealer who sold it to you.

Typically an RV dealer will make a big deal out of a high list price and advertise or quote a discount that sounds fantastic. 20% or more off the alleged normal selling price. But often that discount price is misleading, i.e. you can't actually drive away with the new rig at that price. There will be extra required fees, called "prep" or "make ready", that should have been included in the selling price to begin with. Don't get hung up on the sale or discount price - the only price that means anything is the "out the door" price, the bottom line. And ignore dealer add-ons like "paint protection", "tire protection" and extended warranties - they are just over-priced extras and rarely worth it.

Used RVs are another story entirely - there is no credible used book value, aka NADA book price. The dealer asks what he thinks he might be able to get, maybe from a naive buyer, and you can counter with a really low offer. Then haggle your way to something agreeable. You need to do a lot of market research to get an idea of what a reasonable price is, and that price can vary by the region and time of year. One model or type may be in high demand, while another sits on the sales lot begging to be noticed. Walking away is your best negotiating tactic - they will almost surely call within a day. Might even chase you out to your car as you walk away. .

 

[Kirk]

Walking away is your best negotiating tactic -

My advice is to never buy on your first visit to a dealership. If they try to tell you that this is a one-time opportunity, and that if you don't buy you will miss out, walk away as that is one of the techniques used by the most crooked salespeople. It is very common for dealers to offer an extra commission on a difficult to move RV in order to get the salespeople to push it. I spent 32 years working in customer service with commissioned salespeople and while there may be a few honest ones, salespeople who never lie are extremely rare.