How much off MSRP now?
How much off the MSRP of a new RV would you expect to get now that we're enduring this pandemic and economic shutdown. We all know to try to get 25%-30% off MSRP in normal times but considering the 20...
Forum Discussion
The economics of pricing are much more complicated than just lower demand equals lower prices.
First, sellers cannot a product for less than cost and stay in business. Vehicle sellers often finance their inventory and have to pay the balance owed on each vehicle at time of sale. That means a dealer would have to pay out of their financial reserves to sell a vehicle below cost.
Second, sellers know that within the laws of supply and demand, there is elasticity of demand to consider. Some products are very price sensitive. People will probably buy a lot more pizzas if the price falls to $3.00 and very few if the price rises to $300. On the other hand, the price of insulin really doesn't matter. People with diabetes will pay whatever the sellers are charging, but cheap insulin won't get them any more customers so the price competition is only between the various sellers with no real concern for the demand from buyers.
Within the RV sales business, both happen. Lower prices would certainly draw more customers, but the price changes needed to draw those customers may be too extreme for the sellers. Lowering the price of an $80,000 fifth wheel an additional 5 or 10 percent likely isn't going to motivate someone who is out of the market due to fear of losing their job. It is very likely the dealers are realizing the only people currently buying are those with a need to buy. Buyers such as a full timer who's motorhome had a catastrophic failure or a buyer who wants to flee a virus hotspot and really isn't concerned over the final $5,000 of a transaction.
And don't forget the dealers know it is more difficult to actually shop for an RV. Travel to distant dealers is more difficult and may appear to be dangerous to many. They know that there are many people stuck at home with nothing to do, so they shop the RV world on the internet with no real plan to buy today.
Dealers know that offering exceptionally low prices today may cost them profits in the future when things open up and buyers return. They won't want to be in a situation where the returning customers waive an email from the dealer offering to sell RVs at a price the dealer only wanted to accept during the shutdown. The dealers are likely going to adopt the policy of "good things come to those who wait".
First, sellers cannot a product for less than cost and stay in business. Vehicle sellers often finance their inventory and have to pay the balance owed on each vehicle at time of sale. That means a dealer would have to pay out of their financial reserves to sell a vehicle below cost.
Second, sellers know that within the laws of supply and demand, there is elasticity of demand to consider. Some products are very price sensitive. People will probably buy a lot more pizzas if the price falls to $3.00 and very few if the price rises to $300. On the other hand, the price of insulin really doesn't matter. People with diabetes will pay whatever the sellers are charging, but cheap insulin won't get them any more customers so the price competition is only between the various sellers with no real concern for the demand from buyers.
Within the RV sales business, both happen. Lower prices would certainly draw more customers, but the price changes needed to draw those customers may be too extreme for the sellers. Lowering the price of an $80,000 fifth wheel an additional 5 or 10 percent likely isn't going to motivate someone who is out of the market due to fear of losing their job. It is very likely the dealers are realizing the only people currently buying are those with a need to buy. Buyers such as a full timer who's motorhome had a catastrophic failure or a buyer who wants to flee a virus hotspot and really isn't concerned over the final $5,000 of a transaction.
And don't forget the dealers know it is more difficult to actually shop for an RV. Travel to distant dealers is more difficult and may appear to be dangerous to many. They know that there are many people stuck at home with nothing to do, so they shop the RV world on the internet with no real plan to buy today.
Dealers know that offering exceptionally low prices today may cost them profits in the future when things open up and buyers return. They won't want to be in a situation where the returning customers waive an email from the dealer offering to sell RVs at a price the dealer only wanted to accept during the shutdown. The dealers are likely going to adopt the policy of "good things come to those who wait".
