By Chuck Woodbury
RV shows can be a good place to get a good deal on an RV. But most often, you can get the same price back at a dealership a week later. Salesmen at RV shows get “spiffs” on RVs they sell at a show. These are cash bonuses for making sales. As a result, they have an extra incentive to sell you something right there and then.
Anyone in the market for an RV should be aware that a salesman has this extra motivation to close a deal “now,” and not “later.” Some will make promises and claims that may not be entirely true. As an RV show progresses, the buzz among dealerships is how many sales each made. “Did you hear that XYZ dealership closed 20 deals?” one salesman will ask another. Numbers matter, both for profits and bragging rights, and sometimes buyers are the innocent victims.
Still, great deals are available. My advice to a would-be buyer is pretty simple: always “sleep” on any offer. Never make a decision based on the emotion of the moment. And never buy an RV without having already researched a make and model thoroughly. It’s much too easy to “fall in love” on the show floor without knowing the facts: an RV that looks good may not be so good upon closer inspection. To me, buying an RV you just found, right on the spot, is like rushing to the all-night wedding chapel with someone you met at the tavern at 1 a.m.
At RV shows, never buy with no money down. Some RV dealers are now pushing this option. And except on very expensive motorcoaches, avoid financing it for 20 years, which can make monthly payments look downright cheap. I consider either of these practices to be poison.
Buying a motorhome with a price of $70,000 with zero down and interest of 6.9 percent, results in a monthly payment of $538. Affordable? Not really. The catch is that those “low” payments extend for 20 years! Do you think that a modest-priced rig will last that long? No way! But once you drive off the dealer’s lot, your rig is now a used RV and its value dives faster than a nuke submarine. At the end of three years, if the owner wants to sell it, he will still owe $64,577: of the $19,368 in payments he has made thus far, $13,963 went to interest. If the RV has depreciated by a third at the end of three years, that means the RV is worth $46,900. If the owner wants to sell it he will have to come up with the difference between what he owes and the RV’s value — which means he will have to PAY someone $17,677 to take it off his hands. In RV financing lingo, this situation is known as being “upside down.”
“A fellow came to me recently whose payments were $690 a month,” a salesman at an RV show told me. “He had lost his job and couldn’t make his motorhome payments anymore. He wanted to know how much he could sell it for. I told him, but it turned out it was $10,000 less than he owed on it.”
It happens every day. The moral of the story: Put as much down on a vehicle as you can afford and avoid loan terms that will likely last longer than you will. Such financing is fine for a home, which normally appreciates. But it seldom works on an RV, which loses value every year.
And, for the record, an RVer who buys a $70,000 RV with zero down and finances it for 20 years at 6.9 percent — and keeps on paying for the life of the loan — guess how much he will pay all together? How about a total of $124,245, of which $59,245 will be interest.
All that said, I believe that RV shows are most valuable as a place to see hundreds of different makes and models of RVs in one place, whether you are in the market to buy, or simply want to see what’s new. They provide a wonderful opportunity to talk to a lot of people — salesmen, other RVers and even factory representatives. Free seminars on various RV subjects are almost offered and are worth attending.
And one more tip if you plan to attend an RV with the intent of buying: be sure to pay close attention to how much weight an RV can hold and tow (in case of a motorhome). It’s very easy to overload a vehicle, and that can be dangerous.