What Is The Markup On Travel Trailers (RV Best price, Sales Profit Margin)


What Is The Markup On Travel Trailers

Have you ever wondered what the markup on travel trailers is or what is the best price you can get on an RV? Look no more. We´ve got you covered.

We all know dealerships put their mark up on travel trailers to cover their costs and make a profit. Buying a travel trailer may be a considerable investment, and it is hard to know how low you can negotiate a fair price.

You might ask yourself just how much of a markup retailers place on a travel trailer? The markup on travel trailers is around 40% as an industry standard, and with overheads, an average dealer is looking at a 28.5% gross profit. Although MSRPs may differ from place to place, season, and the travel trailer model you chose, 20-25% off MSRP is considered a good deal. 

Sometimes RV industry figures, sales, and profits may be pretty mysterious. This confusion may make you uncertain how far you can drive down your RV price without being unreasonable.

Here are some REAL facts to help you negotiate the best deal on your travel trailer. 

How Much is the Markup on Travel Trailers?

As you can imagine, dealerships are not open-handed with specific markup figures for obvious reasons. Unlike new light motor vehicles, which often have dealer invoices on request, travel trailers are a bit trickier to pin down in terms of markup.

Dealer invoice prices are rare in travel trailer sales, and many external factors may influence the dealership price, such as manufacturers’ incentives and financing incentives.

Although some RV sites rate dealership markups as high as 50%, this is not likely a typical markup.

Most estimates place dealership markups between 34-40% depending on the specific factors influencing individual travel trailer sales.

So, you shouldn’t be afraid to haggle with your RV dealer and find yourself a discount that suits both your pockets. 

Read also: Buying An RV Through Costco (Discount – Step by Step Explained)

What Should I Expect To Get Off My Travel Trailer MSRP

According to several RV forums and RV-specific sites, the standard markdown you should expect for a new RV should be between 20-25% percent.

However, as the profit margin is far less for the smaller, more economical models, you will more likely get a lower discount than the larger, luxury travel trailer.

The average markup built into the MSRP is a point of debate. Still, online estimates average the dealership markup between 28-40%, depending onthe potential extras and the value of the RV.

Although each sale is unique, there should be leeway to negotiate between the MSRP between at least 15% and even up to 30% in cases of luxury rigs. 

What is MSRP?

The manufacturer’s suggested retail price, sometimes known as the ‘list price,’ refers to the price a product manufacturer recommends for retail.

This term is commonly used as a term in the sale of vehicles such as cars and travel trailers. 

Manufacturers typically place an MSRP on a high-value product such as a travel trailer to create some form of consistency of price from sales point to sales point. However, retailers don’t always follow this price.

If the economy is in a slump or inventory fails to move, they may lower their price from the MSRP to stimulate sales.

On the other hand, they may rise above the MSRP if the demand is high and the travel trailer is in limited supply.

How Does MSRP Work when Buying a Travel Trailer?

Manufacturers create The MSRP or recommended retail price (RRP) to help make prices of products consistent in various locations and stores. However, retailers and dealerships are not bound strictly by this price recommendation and may sell higher and lower than the MSRP.

 Vehicle dealerships must display an MSRP sticker on the vehicle’s windshield or at least on the aspect sheet so that consumers are ensured they are getting a fair deal.

Travel trailer buyers may use the MSRP to negotiate with a dealership to find a reasonable price for their trailer.

 Your travel trailer MSRP does not reflect the manufacturer’s value solely but includes:

  • Costs of the manufacturing and sales process
  • The average mark up by retailers 
  • Profit for both the manufacturer, wholesaler, and retailer of the vehicle/travel trailer.

Can Retailers Manipulate MSRP?

The MSRP value may rise when a retailer, for instance, buys in bulk from a wholesaler and advertises the MSRP price for smaller sales quantities through a distributor.

By purchasing low in bulk and promoting the MSRP according to smaller quantity recommendations, they may lower the price and advertise the sale as a bargain when it is not necessarily so.

What is Nada for Travel Trailers?

The National Automobile Dealers Association NADA provides a comprehensive value system for light vehicles, commercial trucks, and RVs.

Like Kelly Blue Book for travel trailers, NADA gives estimated valuations of both new travel trailers and depreciation averages on used travel trailers. 

Although some industry professionals criticize NADAs estimates as not based on sales data, you may still use NADA to aid you in negotiating a fair price for your travel trailer. NADA provides users with:

  • A suggested List Price (MSRP)
  • Low Retail Price 
  • Average retail Price.

You may supplement these average figures with another great source of estimated RV values on the RV Trader site. 

Read also: RV Depreciation // How Much Do Campers Really Depreciate?

How do I Negotiate My Travel Trailer Price?

Travel trailers don’t come cheap, and if you are planning a possibly substantial investment, you should get yourself prepared beforehand.

Having facts, figures, and information at your fingertips may take you a long way in negotiating down your price at a dealership. 

It may end up saving you thousands of dollars that you may better use on kitting your travel trailer for a stellar getaway. Also, first-time buyers often fail to consider operation, insurance, and maintenance costs after they have signed the dotted line.

Here are some top tips for getting the trailer you want at the price you can afford. 

Decide What You Want and What it is Worth

Renting various travel trailers is a great way to get a feel for what you seek in your perfect camper. Do research online and approach veteran RVers for unbiased opinions of the best makes and models (and what price you should expect to pay.)

The RV community is diverse and connected, and most RVers love to share information and tips to make newbies feel at home or pass information amongst the veteran players.

Once you have an idea of the exact make and model that ticks all the boxes, it is time to do serious homework about what you should expect to pay when you approach your dealer.

Check NADA for your expected MSDRs and depreciation should you seek a second-hand travel trailer. Supplement this information with other established online sites like the RV Trader site and collect your estimates to present to your potential dealer.

Cast Your Net Wide

Shopping around for the best prices may get you much closer to your target price. Some RV forums suggest you approach dealerships up to 300 miles around your location to ensure that you get the best deal for your chosen trailer. 

Once you show a local dealer a competitor’s offer, they might be willing to lower their price rather than lose the sale.

A great piece of advice is not to buy your trailer at your first dealership visit, no matter how tempting it may be. Shopping around may end up saving you thousands. 

Timing is Key

Most RV dealerships operate on a monthly and annual sales quota, so you may time yourself into a tidy profit by taking advantage of this fact.

Timing your negotiations to near month’s end, or preferably near the end of the year, may coincide with increased pressure to make quota at your chosen dealership. 

Unlike cars, RV sales are quite a seasonal affair, with sales dropping in the late fall. You may also look ahead to when the new models of RVs in your chosen brand are due for release. Often dealers mark down their existing stock to make way for a new model with higher initial sales due to its novelty. 

Look at sales trends in the RV market, such as the post-COVID-19 RV sales boom that is now resulting in an increased influx of used travel trailers on the market.

The market is primed to find a used RV in good condition for a lower price. 

Set Your Price and Stick to it.

Salespeople in RV lots know precisely how to put the pressure on to seal the deal on an RV. If you have done your homework and know your specific trailer model’s (realistic) value, you should be prepared to walk away if the dealer won’t budge on the price.

If you have all the facts about why you shouldn’t pay more, you will find a dealer who will negotiate with you. 

Read also: Can You Trade In An RV or Camper For A Car? (Campervan, Motorhome)

Conclusion 

Unlike car sales, you have far more leeway to negotiate your travel trailer price, especially the larger rigs.

MSRPs are, in fact, just a starting point, and you shouldn’t walk away without negotiating a deal where both you and the dealership will profit equally.

If one dealership doesn’t negotiate, try another, and you may be pleasantly surprised. 

References

https://www.nada.com/

https://www.investopedia.com/

Mike Gilmour

Hi, I'm Mike, co-founder, and editor of RV and Playa. My passion is traveling (with my RV) and enjoying the day at the beach (Playa)! Well, I originally created this blog as a way to share what I've learned by experimenting with the RV lifestyle, and I want to help others develop in life through new skills and opportunities.

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