How much do dealers pay for the RV's they sell

[RobWNY]

I was talking to a guy that's snowbirding next to me and we were discussing RV prices, discounts consumers should expect etc. He works for a dealer in his home state during the summer months so he was able to buy his rig at dealer price. He told me his 2019 Jayco Pinnacle 5th wheel had an MSRP of just over $100,000 but he paid $54,000 for it. He said a dealer typically is paying 51%-52% of the MSRP + the freight cost to get the rig to the dealer. I told him I had recently gone to the Tampa RV Super show and dealers were advertising 20%-28% off MSRP depending on the rig, but no mention of the other costs dealers like to attempt to get consumers to pay for (Freight, Prep, PDI fee etc.) so there was no way of knowing if the prices were "out the door" prices. He said that you should start negotiations at 30% of MSRP and then get the dealer to "throw in some stuff". I said I got 28% off my rig plus tax but I didn't get anything else thrown in. He felt I could have done better. I felt if I walked away hoping the dealer would do better, I would have not been able to buy my rig from that dealer. I had a strong feeling that was as good a deal that I was going to get on the 5th wheel I bought.

So my thoughts are this...Why should a dealer be making more than 2 grand on any sale? That seems like a fair profit for them. Realistically I'm pretty sure we aren't going to get discounts that deep but why not? Why do we accept 25%-30% off MSRP, allowing the dealers to make a bundle on each sale, and then have to accept lousy customer service following the sale in many instances? If the 51%-52% numbers my neighbor talked about are accurate, shouldn't we be negotiating up from that number rather than down from the MSRP?

[DarkSkySeeker]

A salesman at an RV show told me they make very little on trailers and fifth wheels. Class A rigs were the best commissions.

Repeat, "a salesman told me..."

[JIMNLIN]

JALLEN4 wrote:
As a retired new car dealer, I can assure you that it would be extremely rare for some part-time dealership gopher to actually have a clue as to what the dealer is paying for product. He might well think he does. I can assure you very few people working for me did and none of them were part-time lot boys.

True this;
My wife was the company comptroller for a Skyline rv/mobilehome dealer some years ago.
No one but the dealer owner or his ceo knew how much monies the dealer had to give the trailer mfg for a certain line. Not even the wife knew this number.
And not every dealer got the same price. Generally... dealers with higher sales got the better mfg prices over mom and pop that sold 4-5 units a month.

I always check dealers price for a certain unit in a 200-300 mile area around me. This gives me a good idea what I'll have to give for that unit.

[Walaby]

Exactly CFerguson. Negotiations are most successful when both parties feel like they got a good deal and are happy. Whether it's buying a car, trailer, or negotiation a defense contract (which is my line of work). It has to be win-win for both parties, or it stalls.

As far as slamming folks for taking discounts, like OP does, you need to look at it differently. Dealers are well aware of the game. Why do you think MSRP is so different with different dealers on same models? They offer the discounts because consumers have come to expect them. They raise the MSRP a little if need be, or drop it a little, to show an even better deal. These discounts are already factored into their bottom line price they will accept for the unit. Even if they only paid 50% of the MSRP on the unit, don't forget there is interest they are paying while sitting on the lot, there's prep that has to be done before it goes out the door etc.. all that factors into their equation.

The job of the salesman (and dealer) is to make as much money as possible legally. The job of the consumer is to get the best deal they can get, and when both parties are happy, the contract is signed, and they both smile and walk away.

Why that is perceived as bad is beyond me.

Mike

[CFerguson]

I used to work for a very large company. When they first sent me to mgmt school I noticed that Thursday afternoon on the syllabus was the topic "Negotiations". I and every other attendee looked forward to that course, thinking 'o boy, I'm gonna learn from professionals how to screw my car dealer on my next auto purchase".

It wasn't anything like that. The takeaway was that there is a price where both parties in a deal walk away happy and it is our job to find that point. A Good Deal is one where everyone walks away happy.

If you are happy with the RV deal you got, don't beat yourself up thinking you could have gotten 2 more nickels because someone on the inturweb said you didn't 'win' the sale.

[mich800]

spoon059 wrote:

Lynnmor wrote:
The real question should be: What is a $100,000 RV really worth considering the manufacturer made a profit selling it for $50,000? Since much less that $50,000 in materials and labor was used, is it any wonder these things are of low quality?

I'm doubtful that a $100K MSRP RV sold for $50K new... Although I did read it on the internet, so it must be true.

Yes, I would put as much credibility in this story as the people getting 25 mpg pulling a 20k lb trailer.

[spoon059]

Lynnmor wrote:
The real question should be: What is a $100,000 RV really worth considering the manufacturer made a profit selling it for $50,000? Since much less that $50,000 in materials and labor was used, is it any wonder these things are of low quality?

I'm doubtful that a $100K MSRP RV sold for $50K new... Although I did read it on the internet, so it must be true.

[colliehauler]

It's total up to you to make the best deal that is acceptable to both parties. What you think the dealer should do is irrelevant.

[BarabooBob]

I bought my latest new TT after shopping for the best deal. Nobody had a gun to my head to make the purchase. We CHOSE to purchase a TT. It is not a necessity, it is a luxury. If you don't want the dealer to make any money to pay his employees, don't buy luxury items.
I am sure that the OP makes a profit at whatever he does or else he is a trust fund baby that does not understand business. Why can't the dealers make money like the OP does?

[JALLEN4]

As a retired new car dealer, I can assure you that it would be extremely rare for some part-time dealership gopher to actually have a clue as to what the dealer is paying for product. He might well think he does. I can assure you very few people working for me did and none of them were part-time lot boys.

[MitchF150]

Funny how everyone thinks the Big Bad RV Dealer is out to get you every time... Sure, there are the Snakes out there... But, if you fall for it, then, well.....

In the end, you either take the deal on the rig or not.. You either inspect the rig yourself or pay someone to inspect it for you..

I have dealt with a big time dealer and a family owned dealer in the 2 travel trailers I bought brand new each time in the last 18 years..

Both transactions were perfectly acceptable for me and I got the trailer I wanted at that time for the price I was willing to pay..

I saw the MSRP price on both rigs and I got them for far less than that. In the end, I have no idea what the dealer profited on the deal, but that's up to them to keep the doors open.. I made them an offer, they accepted, done deal... If they didn't accept, and I didn't want to deal anymore, I have every right to walk out and try some place else..

It's called doing business and being able to pay your employees and manage to keep the lights on..

I know I make more money for my company than they pay me... I guess that's why them employ me...

Anyway, in the end, you have total control in what you buy and what you don't buy.. Don't like the price, go elsewhere.

No matter who you ask, you will always find someone who got a better deal than you did... but, you will also find that you got a better deal than someone else... Be happy with that and enjoy..

Good luck!

Mitch

[valhalla360]

In addition to the OP not knowing how overhead impacts pricing and other business issues.

One guy told you this...he could have been talking out his &$%W&.

[B_O__Plenty]

Terryallan wrote:
Well. there is always the chance you could buy straight from the factory. I have heard of people going up and buying them from the manufacturer. Try it and see if you get a better deal.

Lucky to find a Mfg. that will sell direct. Maybe 3 or 4 that will on some small oddball stuff but none of the majors will.
B.O.

[DallasSteve]

romore wrote:
It is really none of our business what the dealer paid, if he/she chooses to share that information and is honest so be it. As others have said there are a lot of costs with running a business and margins are thin, they have to move a lot of product to stay afloat.

True that. I contacted a dealer about an RV and they replied telling me their cost. Like I give flying #$@! what they paid for it. The only thing that matters to me is the market price for comparable vehicles.

As to the original post, I'd say 30% was where you should start 5 years ago. I think manufacturers are wise to that and now it's closer to 40%. Do an RV Trader search for new models of anything and compare the highest and lowest prices for the same models. That will give you a good idea of the mark ups. If it's a brand that won't allow advertised discounts like Grand Design then you just need to look at comparable units from other brands.

[MitchF150]

...

[Lantley]

rexmitchell wrote:

Lantley wrote:

rexmitchell wrote:
I’d venture to guess that a majority of a dealerships profits come from service and not new sales. I can see them selling at a lower price and making it up on the back end with service.

Your correct there is variation and different margins, however $2000.00 gross a unit seems awfully low for the dealership is to be profitable.

Sure, I wasn’t speaking on a specific $ figure. For lower end units a 2k profit would be plenty. For the higher end units that number is probably closer to 5k.

You really need to look at it in percentages vs. an arbitrary $$ figure. If dealer cost is 50% of MSRP than dealer needs a gross profit of at least 20% to survive. Maybe if all goes well dealer can net 10 %