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Topic: What is the average % discount from MSRP for new, current model Class A rigs a cash buyer with no trade can expect to ask for?

Posted By: dextery on 01/11/03 01:09pm

When we are out kicking tires, looking at Class A
rigs at dealerships, how much should we go into the cubicle asking for? And then there are those dealer added options to add to the MSRP that the manufacturer placed on the rig. My experience is that the dealer added options were added on to a rig that is not selling well as delivered from the factory.

What has been your experience??


Dexter/Cherie
2004 40ft Dutch Star | Spartan Chassis | ISL 370 HP Cummins | Quad Slide
Our Current Location
FMCA F306636 SKP 75602




Posted By: Kirk on 01/11/03 01:31pm

The RV Consumer Group says to never accept a deal of any more than 80% of MSRP. I have seen claims of as little as 70% of MSRP, but I find those claims to be questionable. Usually in these cases there was a trade-in involved that they have been playing with the numbers. RVCG considers a deal of 75% to be a very good one and they say that the average mark-up built into the MSRP is between 28 - 34% depending upon the amount of optional equipment and the price range of the RV. I was able to purchase at 74%+ by dealing with six different dealers over a radius of 300 miles and using the exact same spec. sheet for each. And don't let them charge you extra for a special order RV eithere, since they have no appreciable overhead in a special order like they do when it is stocked on the lot. I did drive 180 miles to get it, but as a fulltimer, who cares? We won't be near the dealer when we need service anyhow. Be very careful of dealer add-ons, as most of them are just gimmics to inflate the price. As a case in point, a car dealer has about $50 total expense in the special treatment of the upholstrey that they charge so much for. RV dealers are much the same. And as with car dealers, never trust the sales person!




Good travelin! ........Kirk
Professional Volunteer
Fulltimer for 11 years,
URL: www.adventure.1tree.net



Posted By: Jim P on 01/11/03 02:15pm

Kirk is right on, but I don't think even the dealer bothers with upholstery. I believe this is treated at the fabric mfr before it is even sewed onto the furniture. I worked at 3M where you can buy the furniture treatment at the company store. The fabric treatment is also available at many retail stores at much less than you will pay a dealer or mfr to spray it on for you.


Jim P


Posted By: TexGeorgiaBoy on 01/11/03 02:23pm

Be sure you are getting "true" MSRP numbers. Most dealers don't show you the MSRP but their own modified MSRP sheet. Be careful just trying to get a "discount" off a MSRP. Better to look at what you want, then find out what others have paid. It's not as easy as buying a car. Takes a lot more research. Even the manufacturers don't always give you MSRP numbers. Coaches are all so different because of options. Be careful. Markup is "Very High". I would make a real low offer on the one I found that I wanted if I was not trading and had cash. Let them counter and go home and wait for the phone to ring. The market is soft and they "will" take less profits right now. Expect them to at least make 5-10% because they have bills to pay and want to stay in business. Good Luck. TGB


Posted By: Mississippi on 01/11/03 02:58pm

The industry standard seems to be to add 40% of the dealer invoice(cost) to arrive at MSRP. This results in a gross profit % of 28.5%. Depending on the price of the coach, this means that a purchase with a 25% off os MSRP is normally a good deal. Sometimes, the manufacturer will give the dealer additional incentives related to RV show units or to move excess inventory. If you are buying a new coach or ordering one, the 28% rule is fairly universal.


S. Keith Winfield,CPA
Carol Winfield, copilot
2013 Entegra Coach - Anthem 42RBQ
Ford F150 Crew Cab


Posted By: dicko on 01/11/03 08:20pm

I think you're asking a good question but when you're "...just out kicking tires" it's not the time to try to negotiate. When you're ready to buy you can negotiate but all you're doing is wasting the salesman's time if you're not serious.

In other words, if the salesman agrees to a 'great deal' you should be ready to close.

-Dick-



Posted By: Capt Vern on 01/11/03 10:12pm

We got 26 percent off on the new Islander.

Vern


Vern and Skippy
69 41' TC Hatteras Motoryacht,Twin Detroits
03 40' National Islander, 400 ISL Cummins
Saturn Dinghy


Posted By: dely on 01/11/03 11:02pm

If you are looking for a very reasonable quote with no negotiations and do not have a trade in, log on to www.worldwiderv.com. You can build a motorhome with your options and receive a quotation over the internet without ever having to talk to a human until you are ready to buy. Very professional organization. We pick up our Travel Supreme at the end of this month. Unless something happens soon, I highly recommend them.

Don




Posted By: msmith1199 on 01/11/03 11:43pm

I have found that many RV dealers are putting the MSRP on the motorhome and then going ahead and marking a dealer price of about 20% lower than MSRP. I know when I first started looking at motorhomes and didn't know much about them or the markup, the sticker price scared me away from a lot of them. Had they been marked at a price closer to their actual sales price I would have probably bought my motorhome a year earlier. It wasn't until I was really serious about buying and started doing my research that I figured out the motorhome I wanted was really going to be more affordable than I thought.

Also, one of the nice things about having so much room to play in the price is the dealer can build the loss of your trade-in into the price if you need to. I traded in a boat that I had difficulty selling. I was upside down in the boat by about $5k and I knew it. I got my 25% off the MSRP on the motorhome and then added $5k back in to cover the loss in the boat and was still able to get low down payment financing. I know it isn't the cheapest way to do things, but when you trade toys every few years and do minumum down payments, your toys get expensive.


2021 Nexus Viper 27V. Class B+
2019 Ford Ranger 4x4



Posted By: Deen on 01/12/03 01:29am

Our 2002 DSDP had a list of 211,000, dealer cost was approx. 150,000 and on a cash deal I could have bought for 157,000. So play with the figures. These are only approx, and may swing little each way.


Posted By: Ken Pugh on 01/12/03 05:54am

I would suggest that you find the model you want with all the options you want.
Then Fax/email evry dealer in a 300 radius to quote this unit. I would expect a 30% discount.
Ken


Posted By: MBGOVE on 01/12/03 06:11am

Average is difficult because most people rarely just buy the stock RV, there are trades, dealer install options, warranties, etc. If you look at discount from MSRP without ANY of those other things, you will see the % is far less then most deals you will hear about.

RVs generally have a 40% markup/28% discount so a $98K RV costs the dealer $70K. People are getting used to buying close to "cost" from car dealers....RV Dealers are very different:

- First the car dealer gets all kinds of other fees and kickbacks from the car manufacturer so what is shown on many differnt Web sites as cost, is far from real cost...the RV dealer cost is the real cost.
- Second the car dealer sells as many cars in 10 days as the average RV dealer sells in a year so each RV carries much more of the dealers costs.

So when you look at just the RV, nothing else, a good deal is 15%-18% off the sticker. You can easily get to deals that are 20+% off but that "deal" is because of all the high margin add on stuff.


Mike
2005 Beaver Patriot Thunder - CAT C13 525/1650
2004 Ford F350 CrewCab - PSD/TorqShift
2001 FourWinds Dutchmen C - Ford E450 V10


Posted By: jdavis1277 on 01/12/03 08:40am

Deen,

Per my math????, that would have been a discount of 29% off MSRP. That is very close to what I got from Leisure Tyme on my gasser. That was off the lot as built by Newmar with no dealer add ons. Perhaps Newmar dealers have a slightly larger cushion than some other dealers?

Some on the forum refuse to believe a 30% discount from MSRP is possible. I believe that several factors come into play. First, is manufacturer warranty support. If it's exceptional the dealer will not have to eat any warranty work and will not require a larger margin to make money on the deal. Second is the dealer's volume. If they move hundreds of units a year they need less margin per unit to remain profitable. Third is time of year. If it is Late June or later and several current year models remain in stock, it's time to move them before the next years models arrive. Fourth is manufacturer's promotions. Sometimes manufacturers offer discounts on reorders for some slow moving or discontinued models or models which are getting significant restyles in the coming model year. No doubt there are many other factors in play, but discounts of around 30% are possible, IMO.


Butch Davis
Dutch Star 3456


Posted By: taxgun on 01/12/03 09:07am

It's not that people don't believe you can get a
30% discount, but what is outrageous is to make
a statement "to expect it".
I'll bet your last dollar the average discount
is closer to 15% lol
Joe


Posted By: diesel Dave on 01/12/03 10:02am

I also see that "seasonal" or "off season" timing and the "popularity" of a model or brand will affect a dealers "openess " to deal.
Depending on what part of the country and what time of year motorhome sales increase and decrease. If a dealer is not selling many units they will be more liberal in there profit margine so as to not loose a sale, any sale. Dealers pay for the coaches on their lots like most of use do, by the month. So that a purchase on the second half of the month also provides pressure to deal. Same applies to auto dealers.


1997 40' American Tradition ( performance modified 300hp Cummins). Semi-fulltime traveler & fulltime adventurer.


Posted By: Charles Genrich on 01/19/03 01:20pm

I just signed the papers for a new 36 Horizon DP. I spent 8 months on research to get to that point. Some may say it is extensive but I don't spend that kind of money every day/year. Looked at lots of MHs, talked to lots of salesmen. Finally, settled on a unit. In the meantime, went to www.rvpublications.com at got their RV Buyer's Guide. I got a retail price list from Winnebago which lists the base MSRP plus all options and their retail price. From the Buyer's Guide info I used a 35% reduction to get dealer cost. Multiply the MSRP, with options, by 0.74 to get that dealer cost. Added 5% for overhead, etc, and then 5% for their profit. Then contacted four dealers by phone, faxed my info and let them respond. You will not "steal" a unit but will leave the dealership with a feeling that you have done the best possible. Do your research, get the numbers, and stick to them no matter what the salesman says.


Chuck G
Fallon, NV
36 Horizon


Posted By: HiTech on 01/19/03 06:34pm

I have not seen any discount for cash. In fact the lender seems to kick back some money to the dealer so they make more money if you take out a loan.

-Jim


Posted By: PUSHTOY on 01/12/03 01:20pm

I bought my ENDEAVOR for 130K the msrp was 185K with options.


GREG and LAUREN
2001 Endeavor 40FT. ISC 330
Dakota Quadcab 4x4 toad
FMCA 200924,GS Lifetime,CB.CH.13
Teamster Local 710 retired ">


Posted By: Deen on 01/19/03 11:06pm

This is our second DSDP in two years and both of them have been in the same range for discount. Our first one was 28% off, but dealer service was LOUSEY!! (dealer was about 35 miles away and we really expected better). In fact his incompetent repairs ruined the rig for us. Just took the joy out of it.

BTW, the 157,000 was qouted by one dealer (2,500 miles away) and a dealer 130 miles away quoted 158,000. I only contacted the two dealers and the further one has a reputation for "good deals" so I felt the deal I was getting was reasonable.


Posted By: RVRon on 01/28/03 12:15pm

The Dealer cost (actual) is usually considerably higher on a (in-stock) unit opposed to a "special order" one. They have to borrow the money to stock it in most instances, and the interest usually posts to the cost of the unit. My bet and experience is that a special order unit will be no more and often less than an in-stock one. Of course, if it's a left-over or has been around for 9 months with no action, a deal will certainly be in the offing.


Ron in NY
"Too young to retire, too old to work!"



Posted By: RV Having Fun? on 01/28/03 01:18pm

OK, Let's say that a MH has an MSRP of $150,000 and the dealer has a markup of 40%. That would be $150,000/1.4=$107,142.86 This is the dealers cost. If you offer the dealer 25% less than the MSRP that would be $150,000*.75=$112,500. This would leave the dealer with a profit of,
$112,500 - $107,142.86=$5,357.14.

Is this enough profit for the dealer or is it too much. Do they have any 'holdback' like they do in the auto industry? I, for one, would like to get it below cost but I'd worry about the service after the sale.


Posted By: Frank & Carole on 01/28/03 01:35pm

We have been through this process 9 times in 31 years and have yet to break the 28% mark. What we have found is that the dealer overhead is a BIG factor. We bought our Adventurer at Lazy Days-sells about 1,100 units a month compared to our local dealer who sells 1,100 units a year. Lazy days has a lot of buynig power, lots of over head but lots of sales. I am sure that they buy for less.

If you finance you might just do a little better because they do get a kick back on financing. Finance without a penalty for early payoff and pay the note in 90 days-the interest you gain will off set the interest you paid.

We did very well at Lazy Days-traded a 1999 for a 2002. Laid out all the figures-retail to retail and ended up with a discount on the new one of 23% before trade. Took us 7 hours to close the deal!! This was substantially less than our local dealer offered for the exact same package.

The important thing is that we left happy!!

ENJOY!! [emoticon] [emoticon]


Frank & Carole
2002 Winnebago-Adventurer 35U-2 sliders
2007 Saturn Vue-Toad
2007 Saturn Aura
Blue Ox Hitch/Brake Buddy brake supplement
FMCA F126104
GOOD SAM (LIFE) 56703
WIT 109591


ENJOY!! ">">



Posted By: TropicalRV on 01/28/03 02:59pm

Minimum 25%, but if you are a tough negotiator, you can get 28%. If the dealer won't cooperate, call any of the ones that advertise in the magazines, regardless of where they are located. The trip might be fun.


Paul
2015 Tiffin Allegro 32SA, Ford V-10
2002 Honda CRV 2WD


Posted By: MBGOVE on 01/28/03 03:39pm

Holdbacks, inventory financing are standards in the auto industry but they do not exist in the RV world. There might be some added bonuses here are there but it is rare.

If the dealer earned 5% margin on all sales they would be out of business quickly. If you can get 5%, jump for it. They need to make over 10% to break even.


Posted By: RV Having Fun? on 01/28/03 03:49pm

Thanks, MBGOVE

I assume that they make up the difference on the trade in.

Do they also get a portion of the interest rate?

thanks,
jg


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