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RV manufacturers destroying buyers financial s...

Yahoo Message Number: 9744
Damon,

I've purchased several motorhomes, the last two of which were Intrigues. I've always ordered the coach, and have typically paid about 73% of sticker, absent trade in considerations. Have I done well, relative to other's experiences, or am I kidding myself regarding my bargaining skills?

Doug Miller -'01 Intrigue 11254

Re: RV manufacturers destroying buyers financial s...

Reply #1 –
Yahoo Message Number: 9745
Hi Doug

From all of my research, I have found that there is a minimum of a 40% mark up from manufacturers price to MSRP. What the actual price is depends on a performance discount a dealer gets. So, if your coach had a MSRP of $400,000 the 40% rule would be $285,700. Usually the dealer gives you a higher price for your trade in to make you feel good. So if he did that, and you got your coach at 73% of MSRP, (292,000), you did not do bad at all. Now the thing is that as the price goes up the 40% goes as high as 60% on the top of the line coaches. this is because there is a higher holding cost and risk to the dealer and manufacturer.

If anyone else has better numbers, I would appreciate an up date.

Tom Wald

D4Miller@... wrote:

Re: RV manufacturers destroying buyers financial s...

Reply #2 –
Yahoo Message Number: 9752
Doug,

I think you probably did fairly well in your negotiations. A lot of variables come into play when buying a motorhome, such as supply and demand, excess inventory, time of year, trade-in, etc. I think the best way to know if you got a good deal, is to get bids/quotes (at least 3) from several dealers, on the model you are interested in, and see who comes in with the best price. In my case, Damon at Guaranty was the low bidder. His bid was better than he bids/quotes I received from Holland Motorhomes, Beaudry, and Lazy Days.
Also, I'm a little confused with the way Tom calculated the math. I always thought if the MRSP of the coach is $400,000 and you buy it for $300,000, the discount would be 25% off MSRP (100,000 divided by 400,000). Am I calculating the discount incorrectly?

Rick Barnette,

Fulltiming in a 2004, 36' Allure, 31018

Re: discount vs mark-up

Reply #3 –
Yahoo Message Number: 9754
Hi Surfside

You have discount calculated correctly. Mark up means how much the MS RP is marked up from the cost that the manufacturers charge the dealer. A 40% mark up example is: manufacturers price of $300,000 plus a 40% increase in price. 300,000 x 40% = 120,000. Add 120,000 and $300,000 to get the MS RP of $420,000. A 25% discount would bring the price down to $315,000. The real trick here is that there is no industry requirement to have a honest MS RP. So try to use the forformulad you could still pay way to much. The auto industry has an accacrosse country standard MS RP required by law. The RV industry does not have any mandatory MS RP laws. This is not common knowledge and for sure no RV industry magazine is going to discuss it as the industry are the ones who pay their bills through advertising.
Now think about it. The dealer makes a profit from the ignorant of $120,000. How much does the manufacturer write up his cost. The manufacturer is the one standing on the wwarranty Most manufacturers have a one year wwarranty How many times is the average vehicle in for maintenance. My Winnebago spent 35 days in the shop the first 70 days I owned it. It wrecked every trip I attempted to go on. The personal loss to me was huge in terms of anguish alone. It would have been a higher percentage of time if I had taken the coach in when the problems appeared. I put on 4500 miles and sold it at a loss. So that is a huge cost for the manufacturer and of course also for us. So lets say the manufacturer writes up his/her cost by 40% to get a profit and pay for "wwarrantywork", (which really is poor manufacturing and engineering). So divide 1.4 into 300,000 and you get $214,285. So the coach the consumer sees a sticker price of $420,000 was built for no more than $214,285. No wander there are so many people taking a hit when they sell.
We have dealers who make so much money up front they do not have the incentive to have a good reliable repair shop. Come to think of it, there is no mechanic standards for the RV industry. Is this industry living on the pockets of RV owners. It is certainly preying on its victims, I mean RV owners. When it comes down to it, we start off paying for the ineptitude of the manufacturers to put out a reliable RV and it does not stop until the RV goes to its grave.
Wouldn't it be better if their was a standard? Why do the dealers need such a high mark up? They get paid through wazuu for wwarrantywork but try to get into a repair shop. Auto dealers know they have to survive on service to make any money. RV dealers rake in so much money on the sale they don't need to make money in the repair shop. If mark up was less our industry would be better off. The prices would be lower and the manufacturers would have to do a better job on the assembly line and in the engineering department.

I could go into much more here but who wants to read a thesis.

Tom

Re: RV manufacturers destroying buyers financial s...

Reply #4 –
Yahoo Message Number: 9755
Rick,

Your math looks correct to me. A mark up is based on cost. A 50% mark up on a $300,000 unit would be $450,000. A discount is based on retail price. A 50% discount on a $450,000 unit would yield a $225,000 result.

Re: discount vs mark-up

Reply #5 –
Yahoo Message Number: 9762
close explaination of mark up vs discount, but maybe this will help clarify.
there is a difference between a cost plus mark up and a MSRP discount

a 40% mark up is equal 28.6% discount

here is the example

if a coach cost $200,000 times 40% mark up = $280,000 MSRP

you than divide the $80,000 mark up into the MSRP of $280,000

$80,000 divived by $280,000 = 28.6%
so with all these assumptions, it sounds like most of you are correct, you are just not understanding that, the 2 are 2 difference numbers, that actually are the same thing.

do you work from COST plus, or MSRP with a discount.
now with all that said, and alot of coach buyers buying at the 27-28% discount, one would assume that there is additional money, holdbacks, kickbacks from the manufacturer to the dealers. or no one would be able to stay in business.
in reguards to the how much does the factory make on the cost price to a dealer, well they need to have a good mark up as well. the factories, employees, R & D departments, and yes, the warranty repair cost, but i can assure that in the big picture, the warranty costs are a very small percentage of the overall cost of manufacturing a unit. compainies need to be profitable or there is no factory.
with all that said, i would really like to know what cost really is.

billb

Re: discount vs mark-up vs cost

Reply #6 –
Yahoo Message Number: 9764
hi just happy

The real cost to the consumer in the RV business is the amount of time spent getting the RV fixed. The down time when you really want to be on vacation rather than sitting at a repair facility. I would pay a fair price if I was assured i would be on the road enjoying myself rather than broken down someplace or having the coach cold and wet. A real warranty would be that the dealer/manufacturer would pay me $100 an hour for every hour my coach sat idle being fixed during the warranty period. That may increase the warranty cost sufficiently that it would be noticeable on the bottom line of the company books and the Board of Directors and the Stockholders could hold their management responsible for bad engineering and manufacturing. We as consumers should get what we paid for. That is a house that moves when we want it, a house that is dry, a house that is warm in the cold and cool in the heat, a house with hot running water, toilets that work and slides that slide in and out. That is not asking too much for our money. When these things do not happen the cost is too much.

Tom

justbehappy1@... wrote:

Re: discount vs mark-up vs cost

Reply #7 –
Yahoo Message Number: 9765
Quote from: Ann Wald\[br\
]
The real cost to the consumer in the RV business is the amount of
time spent getting the RV fixed. The down time when you really want to be on vacation rather than sitting at a repair facility.

From we used coach buyers to those of you who sacrificed to buy a new coach, a great big thank you!! We get to enjoy the coach you perfected and we experience very few problems, even though we expect lots of problems, and at a reasonable price. :)

Dean

95 Magna #5280

Re: discount vs mark-up vs cost

Reply #8 –
Yahoo Message Number: 9768
Dean,

But who wants a coach that somebody else may have screwed up. That new coach smell is really nice and money isn't everything. Besides someone has to give you used buyers something to buy. If you get what you want and the deal is acceptable then that's what is important. At one time I worked as a purchasing agent for a major oil company and my boss always said "did you ever meet a person that said he got a bad deal on a car" ? Life is to short to get upset about coach problems, You just get it fixed, bitch about it to the manufacture (hope he will pay for it) and move on. Owning an RV is not a money saving decision its a life style decision..

Bill G. 2001 Magna #5998, soon to be the new owner of a 2005 Magna

Re: discount vs mark-up

Reply #9 –
Yahoo Message Number: 9771
Good points Tom; I would like to see this industry regulated (mainly for safety require.) and a way to find out what the invoice price is (like the car industry).

Rick

Re: discount vs mark-up vs cost

Reply #10 –
Yahoo Message Number: 9773
Bill, I have to agree with Dean on this. The trick to buying used is to have complete records from day 1 coupled with a very thorough inspection. My coach had a whole raft of things that had to be fixed shortly after delivery. By contrast, I've had to do little.
It was even fully serviced before I picked it up. It had only 42K miles on it, hardly broken in, and cost me less than 40% of new so I could pay cash for it.

I too appreciate you guys who are willing to buy new. You take the huge depreciation hit for the first few years and you go through all the warranty fixes. We wouldn't be able to buy much better coaches than we could afford new if you guys didn't buy them first. I've found that most better coaches are owned by people who are very careful with maintenance and records. This is my third Class A bought used and all worked out very well.

Dan, 1998 Allure #30180
 

Re: discount vs mark-up

Reply #11 –
Yahoo Message Number: 9792
Based on what the executive from CC said at the Tenn. rally, getting a good deal on a CC unit for the foreseeable future will be very tough. Demand is far greater than the supply and CC cannot build units fast enough to satisfy dealer orders. This is obivously not a good climate to get a good deal. CC is increasing capacity to produce 300 more coaches in 2004 than 2003, but that gives me alot of concern. Mercedes is experiencing reliability problems and their E320 sedan was just given a bad rating. A veteran Mercedes salesman said that Mercedes bumped up production to meet demand and their quality is suffering. It will be a interesting to see if CC can increase production and maintain quality.