5 Reasons You May Want To Avoid RV Consignment
Selling your RV can be a time-consuming process. You have to list it and reply to all of the inquiries, most of which are tire kickers. If the RV isn’t stored at your home, this can mean making trips to show it.
Using an RV consignment is convenient in that it eliminates a lot of the leg work and endless email responses for you. Before you decide to leave the sale in someone else’s hands, here are some things to think about.
What is RV consignment?
A consignment is an agreement between parties in which goods, in this case, your RV, are left in the possession of a third party, likely an RV dealer. The third party is responsible to try and sell your RV for an agreed price over a set period of time. Once sold, you owe the third party a commission for their services.
Consignment is often seen in retail stores such as clothing stores. Automobile consignment is legal and safe provided it is done properly by a reputable seller.
There are, however, some negatives to selling your RV through consignment. You should consider these carefully before entering a contract to sell your RV. Here is the not-so-appealing side of RV consignment.
1. It will cost you money to sell your RV
When selling anything, the idea is to make money, of course. With consignment, you will not receive the full selling price of your RV.
This may seem crazy but of course, there is a fee for the advertising, storage, and sales pitches the dealer will be doing on your behalf. The fee will depend on your contract and the final selling price of your RV.
In general, there will be two options for these fees. The first is a straight commission, with 10-15 percent being a common amount. This means if your RV sells for $60,000, you could be on the hook for $9,000!
The second option is a pre-determined selling price. In this case, if your lowest accepted price is $55,000, and the RV sells for $60,000, your fee will be the additional $5,000 the dealer sold for.
Depending on the seller, there may be additional charges for cleaning and preparing your RV for sale. All of these details should be agreed to before signing a contract.
2. Your RV insurance isn’t valid while in consignment
That’s right, it is very unlikely your insurance will cover you while your RV is in the possession of a third party.
Odds are the dealer selling your RV has a fenced yard with cameras and your RV may even possibly be stored indoors, but things happen. A fire, for instance, could leave you with no RV and no payout.
You should be able to get consignment insurance if you choose to sell this way, but it will be a separate policy. This is another cost to using RV consignment.
The third party will have their own insurance, but be wary of anyone telling you that your property will be covered under their policy. Insurance is always a pain to pay since we rarely use it, but the risk isn’t worth the potential loss.
3. You can’t use your RV while in consignment
Once you sign your contract with a seller, your RV stays in their possession for the term of your agreement. If you have a 3-month agreement, that means they have 3 months to try and sell your RV.
What if a group trip comes up or you get some time off of work? Your RV will be unavailable for you to use. If you are selling over the winter months, this may not be a big deal.
Let’s say you are selling in the spring or start of summer to fetch a higher price, then this could be a bummer when the warm days start to pop up.
4. You may have to pass up potential buyers
Although the idea of a consignment is so that you don’t have to deal with the sale of your RV, this can hurt you as well.
If you have someone ask you about your RV or hear of someone looking to buy, you have to redirect them to the dealer. In some cases, this will deter potential buyers who don’t want to deal with a third party.
You can certainly send people to look at your RV, but they will have to deal with and buy from the consignee. Some people like buying from dealers even when it’s a used RV, but just as many like private sales.
Another potential loss of customers may come from price negotiations. If your RV is in consignment and your agreed bottom price is $25,000, that means the dealer will have to get buyers to pay somewhere in the range of $27,000 – $30,000 in order for them to make their commission. If someone comes along with $25,000, the sale won’t happen.
5. What’s best for the seller may not be best for you
RV salespeople are working to make a living like all of us. When your RV is in consignment, it is among other RVs of different layouts and prices. Some may be less appealing and some more.
Potential buyers who come to view your RV may be swayed to another they think is a better buy. This competition is also there during private sales. People can view as many RVs as they choose, however not parked right beside yours.
At the end of the day, salespeople want to sell something. If another RV looks to be an easier sell or may earn them some extra commission, you may lose out.
Maybe they have a chance to move that RV that’s been on the lot since last year and direct buyers in that direction. The point is your RV is not the only RV and no more important than the others.
Selling your RV is a big decision that can be best left to professionals if you are okay with the cost of a consignment. Your value on your time and your patience will have to be considered. With the RV market as hot as it is right now, selling an RV should be a breeze. Learn more about why now is the best time to sell your RV through National Vehicle.