NADA Retail vs Trade Value Disconnect

[walaby]

I would say the trade offer you got was low because the dealer knows if you don't take it, someone else will.


Seems to be a sellers market currently, which is why dealers are less incentivized to "deal".


Mike

[Ejs4029]

Originally Posted by nomad297

When I bought my Windjammer in 2015, I worked out my deal with the dealer and got a great discount before even bringing my five-year-old travel trailer trade-in into the equation. The dealer didn’t even bat an eye at this last-minute “trick up my sleeve” and told me to “Bring it on in”. I based what I thought I would get for the trade off of NADA, assuming I would get a few thousand less than the NADA value. I was very pleased and surprised to get over $4,000.00 more than what NADA quoted.

I love my local RV dealer.

Bruce

Who is your local dealer ?

[moose074]

I agree with many of the statements. One dealers have to buy low sell high to stay in business. Having not seen your trailer the best route would be to go low. It’s always easier to offer more when trailer is seen then take off. Also by starting low their potential to make money goes up. If they moved the offer to the bottom level of the NADA. Most would feel they got a deal, or might focus more on getting more for the trade in than on dropping the price of the new unit.
When I worked for a dealership my used car manager once offered to tow a trade in for $100, the customer almost walked out. At end of the deal the customer got 1800 for the trade but paid full sticker for the car. After signing papers customer was bragging about getting 1800 for trade was happy with the deal. I confronted the salesmanger for almost costing me a chance at a deal. He explained why he did then ended the conversation with the fact he a,ready contacted on of his buyers who offered $2500 before he even made the first offer of having it towed.

Location location is everything, I tried selling my father-in-law’s truck in my home town. Never even got an offer after 3 months. I drove it to my part time job twenty mile down the road. Parked the truck across the street from where I worked cash in hand 2 hours later.

[Chuck_S]

Trade-ins are a shell game the dealer always wins. Dealer kickback (in automobiles for sure) also means they make money selling at "invoice" price. Those chrome and glass showrooms gotta be paid for somehow. Also remember a dealer has no emotional attachment to the product unlike the buyer and many private sellers who want their discard -- all used items were discarded for one reason or another -- to go to a "good home."

-- Chuck

[Jcape]

Originally Posted by Jeeper44

It seems to me that there is no correlation between NADA values when it comes to retail vs trade in value.


I was looking at trading my 2019 XLR Boost 36DSX13 fifth wheel for a class A motor home as my needs have changed and I really don't need a toy hauler any more. I currently have it listed for $39k privately, as the NADA average retail on it currently is about $45k, and the few that are for sale on the various RV sites are selling right around that price. I'm not even looking at the MSRP of $54k because I know that's not realistic.


Today I called the dealer that had the Class A I was looking at to see what they would offer on trade. He supposedly looked up my camper in NADA trade in values and came back and said it was $26k, so the most he could offer me was $24k. I understand that trade in will be less than retail, but almost a 53% discount (using NADAs own numbers) seems a bit excessive. Even using the value guides posted on here stating you should expect a 21% loss as soon as you take it off the lot would still be $10k higher than what the dealer quoted.


Dealerships need to make money, I get that point. But just based on real numbers out there, this dealer stood to make about a $15k profit on that trade if I was stupid enough to take that deal. Needless to say, I'll continue to try and sell it privately and look for another dealership to buy my Class A from.

NADA Retail is what a dealer would list a unit at on their lot. Tradin is about what an individual can expext to sell it for, maybe a little more. You can always dicker with a dealer for a better price, now you need to realize your unit is 2 years old and has deprecated probably 30%, and you are not providing any warranty when you sell, a dealer does, so they give you less and then mark up the price to cover any warranty work they may have to do and anything they may have to repair before the sell it, business costs like clean up, paperwork, commissions. Not everything between what they pay and what they sell for is profit.

[PatrickY]

What most people don't realize is how the dealer situation really works. They don't give a trade-in amount and then simply mark it up. The first step is that they look at the market to determine what they think the unit (boat, car, RV or truck) will SELL for.

From that amount they deduct their desired profit, the cost of reconditioning (if any) their cost of insuring it on the lot, the cost of having it on the lot (each square foot of lot space costs them money on their lease or mortgage), the commission they will pay the salesperson, and the interest on the money they have paid out.

NADA often sets the gross profit percentage at less than 10% - that is not realistic. Kelley Blue Book and Edmunds often sets the GP% at 20%+ - also not realistic. (These numbers are for automobiles). While I'm sure most dealers would absolutely drool at 20%+, while less than 10% wouldn't keep the doors open.

In the current market there is a shortage of used vehicles - cars, trucks and RVs due to the slow-down or shut-down of production of new units. The shortage of new units has created a greater demand for used units. The greater consumption of used units has created a shortage, and thus the used units command a higher price.

(I recently completed an appraisal on a one year old Tesla with 18,000 miles that had a used value of only $1,000 less than the guy paid for it brand new)

RVs of any kind are in high demand - due to COVID and the sudden interest to "get away" there is a shortage of supply which has driven prices up, meaning that the trade-in value SHOULD be higher - but probably not as high as NADA shows.

I would suggest looking at the advertised price of comparable units, deducting 5% to reflect the result of negotiation (to get the potential actual sale price) and then subtracting a gross profit percentage of between 12% to 18% to compensate for dealer profit.

Just my nickel's worth.

[sc_cmpr]

Just don't get into a big rush to sell and buy an RV. People are still looking everyday for campers and will pay top dollar for clean units. Don't give it away to a dealer. Find every way you can to advertise and good luck.

[Chuck_S]

NADA is pure fiction. They don't (and can't) set prices. The guide is a dealer sales shill. They're only used so dealers can convince you of the "good deal" they're giving you by offering "more than NADA" on your trade-in and "less than NADA" on what they're selling you. That's "more than Fiction" and "less than Fiction" of course.

Trades are a shell game the dealer wins. They don't want your used whatever unless they already have a buyer. Automobile auctions are trade-ins the dealer can't sell otherwise.

-- Chuck

[Sonic Blue]

This quote from Fred W. causes another point of view:

"Probably a better model is the one used by realtors and assessors - comparable recent sales. The problem for the RV world is that nobody has data for actual selling price, the only public info is the asking price, which will lead to inaccuracy."

It has been said that what an item brings at auction sets the true vale. There are huge auctions across the country every month and the results are published in Auction Sheets. Every dealer I have worked with professionally has used auction sheets as an important tool to calculate purchase and sale prices.

The best auctions are dealer only so if you are not a licensed dealer, go make friends with a small used car dealer and ask if you can accompany the dealer to the auction as a registered guest or if they will share their password and register you as a participant with their company for the virtual auction. It is not unusual to pay a used car or motorcycle dealer a small fee for the privilege of buying under their license.

The word now is that the auctions with the hottest activity are in Las Vegas and Phoenix, as far as the South West goes.

[Dsbrew1]

Originally Posted by Msgtret

In some states (like Indiana) under some circumstances, trading in at a reduced price rather than selling outright can save a little money on the tax side. For every $10000 off the final sales price you save $700 on the sales tax. Sometimes it’s a wash.

Beat me to it. NYS is the same with trade ins. You have to weigh it out because sometimes it’s sounds low but when you do the math, it is a lot closer than you realize when it comes time for sales tax.
As far as NADA, everyone who stated that anything added has to be a true upgrade that you actually ordered and paid for, is correct. You’re unit will automatically have the awnings and two 30# cylinders, etc. If you have indeed added slide toppers, then yes, that is an add on. Other than that, NADA is usually pretty close, at least for resale/trade in.

Be safe and stay healthy.

[Kirk S]

I recommend getting an appraisal, as mentioned earlier. NADA is an association of dealers.... the house always wins.

[Ozziee]

When I read your post, I thought that I was wrote the post and did not know it.
We had the same idea on trading in our 2019 Flagstaff, bought it for $55K, the NADA book says should get about 40K to 43K,which is what I see on RV trade for our same model. I know we won't get that much, But not take a huge loss what dealer said they would give us, about 25K. They advertise we need your used RV's, but only suckers' apply. Maybe it's just the dealership Lazyday's who seems to be taking over a lot of dealerships now. Over all what an insult, won't buy from them, when decide to buy our new one. I guess I will have to advertise it ourselves, don't want the hassle, but don't have much choice.

[GOTTOYS]

So many people brag about how much the dealer "gave" them for their trade-in. They never mention how much they then payed for their new unit. The only number you should ever be concerned with when trading is the difference you need to pay. End of story. Nothing else has any meaning.

[Bhrava]

I didn't even bother considering trade when we decided to upgrade. I already knew I would never get anywhere near what the value was and would be upside down anyway. Knowing the auto trade market and how the dealers work, I just knew that no matter HOW nice the unit is, no matter what extras were added, the dealer would only give what they feel they can make on it.

I wasn't in a rush, so what I did was spent time looking at the RV sites, RV Trader, and others, and looked for the exact same model I had in my area and what they were asking. Here's what I found, the same model down south were way low, but up here they were high. There were also far fewer of them up here, which supply and demand always gets higher price. So I listed it in the ball park of what I found and put a REALLY good description detailing the enhancements, with a LOT of pictures. It was a 2014 Coleman 274BH. It is a perfect first time RVer family trailer, no slides to contend with, but plenty of sleeping space. I added a few items inside that improve it's appearance, like replacing the awful plastic kitchen sink with a stainless steel one, adding a flip up countertop on the side, replacing the futon sofa that had 12" of arm rest with a Futon that is 72" of sleeping room, but fit in the same space, and made an armrest that blended and looked factory. I also kept it very clean and polished so it looked new inside and out.

I listed it in August of 2019, and bought a 1 year listing. I did not expect anything until spring, and I was right, first hits came in around March. I did drop the price a bit due to the market, but I still was able to sell it for what was owed, and above market value. I walked away free and clear and the new owners love it.

No matter what, you will take a hit, but patience and good marketing will give you less of a hit than trading it in. It's the If you can wait, or you gotta have it now that determines how much you get for it.

BTW Screw NADA and all those other books, you never get what they say no matter what you are selling or buying.

[nomad297]

Originally Posted by nomad297

When I bought my Windjammer in 2015, I worked out my deal with the dealer and got a great discount before even bringing my five-year-old travel trailer trade-in into the equation. The dealer didn’t even bat an eye at this last-minute “trick up my sleeve” and told me to “Bring it on in”. I based what I thought I would get for the trade off of NADA, assuming I would get a few thousand less than the NADA value. I was very pleased and surprised to get over $4,000.00 more than what NADA quoted.

I love my local RV dealer.

Bruce

Originally Posted by GOTTOYS

So many people brag about how much the dealer "gave" them for their trade-in. They never mention how much they then payed for their new unit. The only number you should ever be concerned with when trading is the difference you need to pay. End of story. Nothing else has any meaning.

You must not have read this post. While I don’t feel it is my duty to tell anybody exactly what I paid for my windjammer, I will tell you, I got it for about 33% less than MSRP...BEFORE my trade was even considered in the deal. The total amount due after the discount on the new unit and the amount given for my trade was almost as much as I had in loose change in my truck’s center console. I wrote a personal check to cover the difference.

Bruce

[herdsman]

I think the low quality of RV builds makes them a huge risk for any dealer looking to take a trade and then resell the unit. They have to offer some guarantee for anything but an as-is unit, and I'm sure they get blind-sided by "hidden" issues just like anyone else buying a used unit.

[GOTTOYS]

The build quality of newer trailers is not as bad as some think. My 2016 Cedar Creek has been nearly trouble free as have countless other newer brands. The manufacturing methods and materials haven't changed a whole lot over the years. I have had 3 units that I bought new over a period of 6 years. Had no to few problems with any of them.

[pgandw]

Because of the processes used, build quality varies greatly from one unit to the next. It's totally up to the assembly crew - their skills, capabilities, and desires balanced against pay and time incentives.

While everything functioned on all my pop-ups and A-frames - or at least functioned after the dealer got through fixing it - functioning is not the same as build quality. I define build quality as not only everything functioning, but excellence in fit and finish as well.

Wiring and plumbing should be standard from one unit to the next complete with location of each coupling or wire junction and fixture used to accomplish. With standardization, accurate documentation is possible and practical. Even more important is the material and labor savings resulting from standardization. With standardization, prefab wiring harnesses can be used. Even my John Deere lawn tractor used simple prefab wiring harnesses.

Seams should have minimal gaps, and properly trimmed where appropriate. Holes should be minimal, and properly trimmed or caulked. Finish scratches should be taken care of in a critical final inspection.

The reality is that RVs are built the way stick-built houses are built, instead of like trucks/autos/farm and military equipment. There are general layout plans and very general material lists. After that, it's up to the individual installer/assembler as to the exact location of stuff. Fit and finish is up to the skill and time of the installer/assembler. Defects upon delivery are expected - for RVs, dealers are given allowances to fix defects.

Fred W

[Chuck_S]

The reality is that RVs are built the way stick-built houses are built

Maybe the bottom feeders. (Yeah, Forest River makes plenty of those.) Bonded, laminated complete panels are common -- wall or roof etc. is one sealed structural piece for example.

-- Chuck

[pgandw]

Originally Posted by Chuck_S

Maybe the bottom feeders. (Yeah, Forest River makes plenty of those.) Bonded, laminated complete panels are common -- wall or roof etc. is one sealed structural piece for example.

I did not mean "stick built" in the sense of framing then sheathing a wall. I meant in the sense in that each house is individually assembled by the builders, carpenters, painters, concrete, electricians, plumbers, etc. It is a totally different process from what vehicle assembly lines use.

Even though an "assembly line" exists at an RV plant, the assembly is not the rigid process used by vehicle manufacturers - an assembly process so rigid and so standardized that robots can do it when quantities justify the capital costs.

What I meant is that when putting together an RV, the electrician makes the final decision as to exactly where an outlet will be located. He cuts wire as needed to connect electrical items and routes the wires in what appears to be the most convenient way at the time. Same for the plumber.

In a modern boat assembly line, jigs and templates are used to drill holes in the same spot on every boat. By doing this, wiring harnesses are practical. So are accurate bills of materials with little to no wastage. Not so in an RV or stick-built house. That's what I meant by RVs using the stick-built house model.

In the stick-built house construction model, quality is controlled by the skill and ability applied by the construction team AND by the materials used. These may vary considerably from one house to the next, even ones built by the same company.

In the process control world of vehicle assembly, quality is controlled by consistency and conformance to the standard. The idea is to have every vehicle be as close to identical as possible.

Hope this explains my point better
Fred W