Did you buy your RV from an online auction website? If so, what was your experience?
A few weeks ago I wrote about what Dave Ramey thinks about RV loan debt. This conversation with Dave resulted in Jim and I agreeing to save up to pay cash for our next RV, which may take a few years but will be worth it to us.
When thinking about our next RV purchase, buying from an auction service hasn’t been our first choice, simply because we don’t know anything about the process or how to avoid RV auction rip-offs.
But thanks to David Rosemill, owner of RV Auctions Online, now we might consider buying our RV through an auction site.
David has provided the following guest blog post which explains the ins-and-outs of buying a RV online. We hope you find it as useful as we have!
Looking for your next RV online?
Written by by David Rosemill, RV Auctions Online
Buying an RV online can be a great way to save money. Here are some tips and strategies to find your dream RV, without risk at great price. There are many auction services online and it is important to understand the differences before placing a bid.
Know the Risk Levels of Online Auction Services
Avoid any service that charges a fee to see inventory. Most likely this kind of company makes money just selling lists or collecting up front fees. If they can’t show you current inventory without an upfront fee then chances are they are too far removed from the inventory. This is the highest risk online source for an RV.
Some legitimate companies will charge a small registration fee in order to bid on an RV. The upside, mostly for the company is that only qualified bidders will bid and they get to collect a small up front fee. The devil is however in the details. On this type of arrangement typically all units are sold as is, with no warranty, and if you are the high bidder you are obligated to purchase or risk a default fee in the thousands of dollars.
The third type of service and one that we recommend does not require an upfront fee and allows you to inspect the vehicle before going ahead with the purchase. Using this type of service the high bidder wins the right to inspect the RV either in person, or using a third party qualified inspection service before going ahead with the transaction. At this point and only at this point will you have to pull out your wallet and therefore completely minimize the risk.
Other Factors to Consider
Who gets your money? Are you paying a middleman who then passes the money on to the owner, or are you paying the owner of the RV directly? The fewer the people involved in the transaction the lower the risk. In the case where the owner is a bank or RV finance company you can get financing directly from the owner if needed making the process as streamlined as possible. This is quite common with repossessed RV’s.
Make sure you run the vehicle identification number with a service such as Carfax.com before going ahead with the purchase. You should know the history of your RV before making a commitment.
Delivery or Pick Up?
Is delivery included? Do they offer a service if you are out of state? Will they give you a discount off of the final bid price if you pick it up in person?
Depending on your location and the current price of fuel a delivery service can run $1000-$4000. Some companies will give you a discount off of the final price or a shipping credit. The beauty of an RV and perhaps the best option is to pick it up yourself if possible. Not only will you be able to inspect it in person, you get to test out your new RV immediately; and for the price of a one-way ticket plus gas it could work out cheaper than delivery.
Online Auction Strategy: Have a bidding style
The Intimidator -Likes to come in big and strong and scare off any of the other fish in the pond. The intimidator strategy can work but you run the risk of paying more than you should have initially or running up the bid if someone ups your bid by just a small amount.
The Sniper – You never see the sniper coming….takes one shot at the end of the auction. The sniper can be very effective if you come in really strong.
The Marathoner – He bids then you bid, then he bids again. He wants to wear you down. The marathoner strategy can work if you have a sense of what your final price is and you divide your bids into equal increments. This way you will not go over budget but you can still make multiple bids.
The 2 Stepper – Puts in an initial bid to get his foot in the door, and then saves the rest until the last day of the sale. The two stepper can be quite effective as it combines intimidator and the sniper. With this strategy put 90% of your bidding budget on your initial bid and hold out the last 10% for the final day.
The Bottom Feeder – This one is looking for a deal, has patience and only bids in low or no competition situations. The bottom feeder strategy takes a very long time but sooner or later a fish slips through the cracks.
How Much Should You Pay?
The objective should be to purchase your RV at wholesale. Wholesale is the same price that a dealer would pay before marking it up on the lot. The key to getting a great deal is knowing your prices and managing your emotions during the bidding process.
Most online auctions take place over a period of days or weeks. This gives you plenty of time to look up the model and get an idea of the retail and wholesale values for the RV you are interested. The wholesale price will be the one in the NADA guide that is called “low retail”.
By sticking to the “low retail” target price you will know that you bought your RV at a good price. Low retail is a better price than you will see on any dealer lot.
Buying an RV online in an auction format does not have to be a big risk and can save you significant money if you are willing to be diligent and don’t act on impulse.
Know your prices, understand the terms and conditions of the service you are using, and have a strategy.
Dave Rosemill owns and operates RV Auctions Online, a website specializing in quality lender-owned RV’s at an affordable price using a bidding format. RV Auctions Online offers a new set of inventory twice a month.