Let me be clear here. My intent is never to generalize based on large groups of people or organizations. It is only to express my opinions based on what I have seen, experienced, researched, and felt. Industries like the RV industry are created to push the envelope a bit. This is no different than what the automobile industry did 20 years ago.
The Automobile Industry Evolution over the last 20 Years:
- Increased regulations that give the consumer a fair playing field.
- Reduction of MSRP markup to a point that in today’s market, the only real discount comes from the Brand or Manufacturer in the form of client rebates. The generic name for this is VALUE PRICING and it was started over 20 Years ago by Mercedes-Benz.
- For depth of knowledge on pre-owned selling prices and amounts for client trade-in values, dealerships use state-of-the-art online third-party sources that provide to-the-minute accurate values for retail pre-owned cars and client trade-in values. These VERY EXPENSIVE tools are platforms that ALL dealerships use to get a very clear view of what their pre-owned cars are actually selling for (not their asking price – their selling price) and what dealers are actually buying cars for based on year, make, options, mileage, and condition. The pre-owned cars game is OVER. Dealerships can prove in writing what 90% of cars should be sold and bought for in our market place.
- The financial services department (better known as the F&I department) has also had to change their approach and presentation. You might not know, without an F&I department, most dealers would not make a profit. Sometimes the F&I products’ gross profits are much higher than the actual profits on the sale of the car. Today, consistent prices for the same F&I products are a must. If not, the dealer can be found guilty of discrimination profiling. If they offer a product to one client, you need to offer the same product to all eligible clients.
- Paperwork is complicated. The Financial Services Manager must go to school to learn how to present and disclose ALL figures.
The above 5 examples exist because my fellow Automotive professional team members and myself are NOW in a situation where our past method of communication and lack of detail, are no longer acceptable. Consumers who buy today are much better educated prior to entering a dealership. This evolution allows a client to focus 95% of their time on researching the dealership, brand, model, and sales consultants, and only 5% on pricing. The old game of haggling is GONE forever. The methods of the past 20 years are extinct. Today, the industry sells a record numbers of vehicles and the emphasis is on the ENTIRE client-ownership experience – from sales, service, and body shop to parts.
What does the history of the Automobile Industry have to do with the RV Industry? Better yet, what are the “5 Things RV Dealers Do Not Want You to Know”? Interestingly enough, these 5 things are similar to the 5 things your Automobile Dealership did not want you to know, 20 years ago.
The following list comes from my personal experience when purchasing an RV. I always put my MONEY, where my mouth is as well as want you to benefit from my experience. Let’s get to it.
5 Things RV Dealers Do Not Want You To Know:
- Client Pre-Inspection: You have every right to do a 4-6 hour pre-inspection on your new or pre-owned RV/Trailer/Coach. This is done prior to signing paperwork or providing a check for full payment. Here are the steps: 1) Study your unit intensely: review blogs, videos, social media groups, etc. 2) Create two-inspection lists – one for you and one for the dealership when their normal Pre-Delivery Inspection (PDI) is being completed. 3) Let the dealership know your intentions by putting all correspondence in writing and respect the fact that they are not used to this type of request/communication (NOTE: one of their rules will be to put NO personal items in the unit until it is paid for completely). 4) Make it clear that you want privacy and don’t want to be rushed. That means YOU as a consumer should NEVER be rushed into doing anything having to do with any aspect of your RV. 5) Bring the list you created, the tools you will need, and be strategic. I am happy to email you my personal punch list. If you would like a copy, feel free to contact me at email@example.com. You can adjust the list to meet your needs.
- Service Department Delays: I understand the internal business of service departments (also known as the Fixed Department) and how they REALLY work. The cause of many delays has NOTHING to do with the shop being too busy or the slow season. In fact, the amount of profit-per-dollar spent in service and parts are usually over 55% on every dollar spent by a client (This is called, Customer Pay), the profit sales of a new or Pre-Owned RV/Coach under 7%. More profit made on Pre-Owned then New. Great RV dealers know that the real money-maker is the shop, not the sale of the Unit/RV itself. So then why the delay? Because RV industry brands have not figured out how to get a firm brand commitment agreement from the dealers on the exact number of hours, and the amount of the hourly rate given on warranty issues. The brand approves the warranty in less than 48 hours usually. The service manager negotiates with the brand for more hours/hourly rate to do the warranty repair. If they don’t get the brand to commit, they take the “customer pay” work first, even if your coach has been in the shop for weeks. When you get frustrated with the dealer and start putting the responsibility on the brand, it seems like things happen quite a bit faster. Interesting isn’t it.
- Agreeing on Price: In a previous blog, I explained in great detail, how I negotiate the price on my RV’s. The short answer is, I do my research first, then I allow the dealership to accept my or reject my price. I don’t negotiate but I am always fair. My last price discussion lasted 4 ½ minutes on the phone. With that in mind, I want to discuss something else here. When you have made your agreement, be sure to 1) Make sure there are NO additional fees like $1,000 for PDI/Tech Demonstration, hundreds of dollars for a so-called “Doc Fee”, added accessories/products you did not ask for or agree to. 2) Make sure you get all the details in writing before for you provide a deposit or pay for the unit. 3) Order the unit to get what you want and use the time it takes to receive your coach in order to sell your trade, create your punch list, and organize your thoughts. 4) If the deal is different when your coach comes in, “don’t talk – walk”. 5) Be prepared to lose your down payment if you get cold feet. Fair is fair.
- Vehicle Service Agreements: Since most RV Brands only provide a 1-year warranty (God bless Entegra, Airstream and RoadTrek) and RV’s WILL break down, Vehicle Service Agreements (VSA’s) are a very popular consideration. Remember some brands offer more time and miles for warranties. The caveat here is this is ONLY for new units, not pre-owned. When you create your transaction and come to terms with the dealership, ask to see the F&I manager and find out how much the VSA costs. Remember, get the contract and go over it with a fine tooth comb. Some of these contracts are structured as an “Exclusionary” agreement. This means everything is covered except what a specific list (for example, tires/rims). The other structure is called, “Named Peril”. The agreement simply tells you what IS covered – everything else is not. When you get your price from the dealership and the paperwork, read it, and then go on the internet and research the best VSA companies so you can compare prices vs. coverage. You might have to let the online company inspect your rig, but that is fine since you may be able to save a large sum of money. Also, pay special attention to the details. For example, what happens if you buy your coach in Florida and you break down in Texas? How will the other service center be paid? Great VSA companies have fast approval processes and pay the service department with wire transfers/credit cards. Others tell you to pay for it and they will reimburse you. It’s worth it to pay more for a company that pays directly and are known for their quick payment processing.
- The “We Owe” Document: The first time you see or sign a “We Owe” document, you may not think much about it. However, this document is very important. It is used to protect both parties. From the dealership standpoint, an example is if you owe them the Title to your trade-in RV, it clearly states it on the “We Owe”. The above “Client Pre-Delivery Inspection” will now make complete sense. When you found issues during your inspection, write them clearly so you can have a “We Owe” document for what the dealership owes you. If the problems with the coach are serious, don’t pay for the coach until it is fixed to your satisfaction. If the items are minor, then be sure to state the item (for example, electric blind on the driver’s side rear window does not go up and down). Then establish the actual date and time by when the item will be fixed. If there is a delay on parts, you want to know now. If they can’t tell you, don’t sign for the coach or give them any money. I bet you will get an answer quickly.
If we know and prepare for these 5 items (and proactively have our agreements in writing), everybody wins. These suggestions allow for GREAT communication on both sides of the table. I want to reiterate that the best method of communication in this situation is to put everything in writing.
So the next time I hear a client in-person or on social media give their one-sided story, I will ask, “Did you read or watch the video on the “5 Things RV Dealers Don’t Want You to Know”? If I EVER see these or other excuses on social media, I will not solely hold the dealership in contempt, because you are right there with them:
- I was in a rush and could not check everything. (Never Rush)
- The sales consultant promised me something and never gave it to me. (We Owe Document)
- The dealership slipped a bunch of stuff into my agreements. (Review the buyer’s order based on the financial agreement you made)
- I did not know about those expensive fees. (Did you ask and have the agreement in writing?)
- They told me the unit would be checked out completely from “Stem to Stern” by their world-class PDI department, yet when I arrived home, nothing was done. (How much time did you spend doing a client pre-inspection?)
- The dealership stole my down payment. (All deposits are non-refundable and must be considered that way from day one. It is merely your first payment for a business agreement.)
I hope this information is helpful. If there are any of my checklists, video’s, podcasts or speaking engagements that you would like to use/view as a resource, just contact me at Gary.Tilkin@GaryTilkin.com and I will be happy to share.