RV How-Tos

Determining the Trade in Value for an RV

January 7, 2019

When preparing to buy a new camper, the questions of: “How much is my camper is worth?” can be really important. This article is about how the dealer determines an RV’s trade in value. I wanted to make this article because I see customers often irritated by what they are offered for their trade in when buying a new camper.

An easily avoidable misunderstanding is to know what you owe on your camper. Unfortunately, a lot of people find themselves owing more on their camper than what that camper is worth.  This happens frequently when people are wanting to trade in their second camper for their third camper. One reason they may owe more money than the RV is worth is because when they traded in their first camper to buy the second they still owed money on the first one. The dealer then rolled the pay off for the first RV into the loan for the second camper. Thus the second camper is carrying that extra debt. Understanding what you owe will save you a lot of headache and heartache at the dealership.

NADA

The NADA (National Automobile Dealers Association) is likely the first place the dealer will look to find your RV’s value. Most dealers are going to look your camper up on the Dealer NADA RV price book. This is similar to the Kelley Blue Book for autos. The dealer will type in a year, make, and model in the Dealer NADA. NADA will give them a trade in value and a retail value. This information is going to give the dealer an idea where to start their price evaluation.

Average Depreciation Rates

Depreciation rates an important factor in trading in an RV. If you buy a new camper, on average, the depreciation the first year is about 20%.  The second year the depreciation goes in half to about 10%. Every year after that the RV loses about 10% of its value. This holds true until about 6 years of age.  The Dealer NADA book on campers goes back about 10 years. After 10 years your camper will be worth whatever somebody might be willing to pay for it. Often people will look online and see what people are asking for that make and model of camper. Keep in mind: sellers often ask for more than they expect to get. Simply seeing an ad for an RV priced at a certain point does not mean that is what the RV will be sold for.

Other things the dealer must take into account

Is this RV popular?

The RV dealer will decide if the RV a popular model that will sell quickly or if the dealer will be holding onto it for a long period of time before it sells.
Sometimes it’s as simple as a camper that was once a very popular model or floor plan is not popular anymore.  In addition, some campers are more popular in certain parts of the country. For instance, a bunk model might be very popular out east and not so popular in Southern Florida or Arizona.

Is this RV known to have problems?

The sales manager will have the experience to know whether that particular make or model has been known to have issues that the customer may not be aware of.   Some examples are:  a known building issue such as widely spaced floor trusses making the floor feel soft, a weak frame, a builder who’s campers commonly delaminate, have water leak issues, etc.

Does this particular RV have any problems?

There is usually something wrong with every camper traded in, weather the customer trading it in knows it or not. Fortunately, most people that camp are pretty good people and will disclose known problems with their trade. The sales manager must be educated enough to find the big problems. Sometimes hidden, unknown or not mentioned at time of trade in.

Overhead costs

If a dealer buys your camper it will need to be inspected, repaired and cleaned for the next buyer. The next customer will expect everything to be working for the most part and clean.

Once your trade-in is received a service technician will have to go through it, inspect it and test everything in the camper. Even if there is nothing wrong with the RV, and it is in perfect shape, the dealer still has to pay a service technician four hours labor to go through your trade. If that technician finds any problems, the dealer has to pay the cost of the damaged parts and the time to repair it. Next the camper will have to be cleaned, vacuumed, the carpet shampooed and the exterior washed. The above is direct labor not including indirect labor such as salesmen, office staff, and other overhead.

What you can do

Maintenance is key. A well kept camper will be obvious to the dealer. Take care of your camper, and any water issues. This will causes your trade in value to go up exponentially.  You can expect your campers value to plummet if you have: water leaks, exterior damage, not done exterior maintenance, interior damage, missing cabinetry, do-it-yourself repairs, strong odors from pets, smoking, and cooking

These are the main things that determine your RV’s trade in value. If you enjoyed this article please share it on social media!

Happy Camping!

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