A repossessed (also known as repo or foreclosed) RV is an RV that has been repossessed by the creditor (the lender) after its buyer has failed to make the required payments. No court proceedings usually occur with repossessing.
In order to cover the losses caused by the inability of the buyer to pay the due amounts, lenders usually sell their repo inventory. The price of a repo RV can go down half the RV’s retail price, depending on the amount that remains unpaid.
Thus, repo RVs are often much cheaper than used RVs of the same model, which is why people looking for an RV are so interested in acquiring a repo RV.
However, even though some serious money may be saved by buying a repo RV, there are many risks associated with repo inventory that may make the purchase pointless, no matter how cheap the item is.
The goal of this material is to make you familiar with the risks of buying a repo RV and help you with making an informed decision. Let’s start with the problem of finding good places to buy repo RVs from.
Where to find repossessed RVs for sale?
After quick googling, you will likely discover dozens of listings advertising repossessed RVs. Things may seem easy at this point, but there are a couple of risks that you need to know about in regard to the search results you’ve found.
The most important thing to be aware of here is that many of the units that are advertised as repossessed RVs aren’t actually repos. It is a common thing that RV dealerships disguise themselves as repo auctions in order to sell their used and even new RVs.
A buyer who isn’t aware of this and who hasn’t done proper research may not even realize that they are dealing with a full-priced new RV rather than with a much cheaper repo RV. Even if you were dealing with a used RV, you would need to pay a higher price for it than for a repo unit.
It often happens that RV dealerships acquire repo RVs, do some repairs and prepping on them, add their own markup, and then advertise the unit as a repo RV. The problem here is that these rebought repo RVs can cost no cheaper than their non-repo used counterparts.
The particular RV unit may have been a repo RV in the past, but it no longer is. And due to this, you are losing all the money-saving benefits of buying a repo RV unit, though you get some other benefits instead, which we will cover in more detail a bit later.
This is why it is important to realize that many of the deals that you find online aren’t actually repo RVs.
There are pretty much two places from where you can buy an actual repo RV – lenders who had originally sold the RV or auctions through which those lending parties try to sell the repo RVs. You may be able to find repo RVs in other places, but they would be riskier to buy a repo RV from.
Let’s now have a look at each of the options in-depth.
Buying directly from a lender
Lending institutions like banks, credit unions, or lending organizations unload their repo inventory through online auctions, physical auctions, as well as directly from their own websites. Here, we are going to talk about the latter option – buying directly from the lender.
Lenders have a variety of equipment in their repo inventory ranging from boats and ending with, of course, RVs. Usually, there are much fewer RVs available in repo inventories than other types of equipment so you may be unable to find an offer at the moment.
To get started, get in touch with a local lending institution. You shouldn’t try and get a repo RV from a lender in another state since it may be very costly for you. A good place to start your search is repofinder.com, which has a nice list of lending institutions sorted by state.
You may also do a manual online search, but repofinder.com should be able to provide you with a comprehensive list of lenders in your area.
Every lender is going to have its own policy so you will need to do in-depth research. Among the things that you should find some info about are the lender’s bidding policy, as well as what they will accept for the unit right now.
One benefit of working with a lender directly is that you can finance your RV through them, often with 0% interest rates. Not every lender may agree to this, so be prepared to pay the repo RV’s price in full.
It’s also crucial that you are able to inspect the RV to evaluate its condition and the extent of damage to it, if any. This is absolutely a must since the maintenance of a repo RV in a poor condition may, in the end, cost more than buying a used RV of the same model.
In addition, do in-depth research in order to find the average fair market value for the exact repo RV model the lender is selling. You can use the NADA guides to do so. Make sure to match the year, make, and model of the RV.
Usually, it is best to choose a repo RV that is much cheaper than its average market value. But don’t get surprised if the RV’s fair value is lower than the price the lender asks for. It may happen that the lender is owed more than the repo RV is actually worth.
The other place you could buy a repo RV from is an auction, whether online or physical. As we mentioned above, buying from an auction is reasonable only if the lender itself is selling their inventory via auction. You don’t want to buy an RV that is advertised as repossessed but is actually a unit that has been acquired from a lender, repaired, marked up, and sold at a price of a used RV.
There are many auctions out there, both online and physical. We’ll cover online auctions since they are more convenient and time-efficient, but what we will describe below will more or less apply to physical auctions as well.
One way of finding out whether a lender is selling a repo RV via some auction is asking them directly. Another option is to check out some popular online auctions. The ones that we want to talk about today are CrankyApe and Asset Management Inc. (AMI).
CrankyApe’s about page tells us that it specializes in remarketing bank-repossessed and insurance-repairable RVs together with their consignments. To bid on a repo RV on CrankyApe, you will need to become a member of CrankyApe, which requires you to pay a $50 fee.
There are many intricacies about bidding on CrankyApe, so make sure to check out their FAQ page in order to find information about payments, unit pickup, and whatnot.
A couple of key things to keep in mind with CrankyApe:
- The RV will need to be picked up by you within 14 days from the auction date. For each day past the 14-day time period, you will have to pay a $25 storage fee per purchased unit. You will have to pick up the purchased unit at one of CrankyApe’s warehouses.
- RVs are sold as is without any guarantees. As CrankyApe writes on its FAQ page, the auction makes a good faith effort to describe the items accurately. However, they describe their inventory only based on visual inspection.
So when buying from CrankyApe, it will be your responsibility to have the repo RV inspected. You will have to do so at one of their warehouses, but if you are unable to inspect the unit yourself, CrankyApe provides resources for independent contractors in their area.
AMI is another option for acquiring a repo RV via online auction. As AMI writes on their home page, it is the leading liquidator (party appointed to wind up the affairs of a company) in central Minnesota.
There’s less information available on AMI’s website on their process of auction, so you will need to get in touch with them to find out more about their bidding policy. However, it is more or less similar to that of CrankyApe.
Regardless of what auction you decide to go with, you need to make sure that you are actually dealing with a repo RV, not some rebought and repaired unit that is sold as a repo for a much higher price.
The easiest way of doing so is to find out the average fair market value of the RV and compare it against the price offered for the repo item. Generally speaking, if the RV’s price is close to the fair market value, you aren’t actually dealing with a repo RV.
What about RV dealerships?
We’ve mentioned above that RV dealerships sometimes buy repossessed RVs from an auction, bring them back to good shape, add their markup, and then try to sell them as repo RVs for a price close to that of used RVs.
While such RVs are no longer repos and cost more, there are certain benefits associated with buying one.
If you buy an actual repo RV from a lender or at an auction, you most likely will receive the RV as-is. Needless to say, you will have to deal with all the repair and re-equipment costs yourself, if any. There also rarely are any guarantees on repo RVs, so a bad purchase would essentially be a huge waste of money.
For a resold “repo” RV, you do pay more money, but you don’t have to deal with as much repair and maintenance costs. Plus, RV dealerships may offer some kind of a warranty on the RV.
Dealing with an RV in poor condition isn’t a thing that can be handled by everyone. If you have the tools and the skills to bring the RV back in shape with, buying a repo RV may be well worth it. Even with the repair costs accounted for, a repaired repo RV may be considerably cheaper than a used RV of the same model.
Though if you get unlucky with your repo RV choice, its repair costs may make it totally not worth it.
But if you aren’t particularly RV-savvy, then it may make sense for you to pay a little more money and avoid dealing with any repair headaches.
Identifying a great deal
After you’ve found a good place to buy a repo RV from, it is time for you to try and find a good deal. In this section, we’ll provide you with a step-by-step guide on identifying a good repo RV deal.
Pick a proper seller
Not all RV deals are equal, and we aren’t talking about the price yet. Not every seller provides comprehensive information on the RV. And any information you can gather about the RV is important.
Look for sellers who provide vehicle histories, VIN numbers, photos, and certified titles. If you have sufficient information upfront, you will be closer to getting the RV road-ready.
It is absolutely a must that the lender provides you with a title or certificate of possession on the RV. Stay away from deals that don’t have a title since it will be virtually impossible for you to claim ownership of the RV without it.
If you’re getting an out-of-state certificate of repossession that doesn’t require the lender’s signature for selling the RV, you need to find out whether your local licensing agency will accept it and issue a new title in your name to allow you to claim ownership of the RV.
Research the market
Now, you may have spent months searching for the perfect repo RV, and there may be one that you are particularly liking. Sure, you might have spent a lot of time and effort looking for a repo RV, but this doesn’t mean that you should rush a decision and go buy that likable RV.
After all, maybe the deal isn’t that great, and maybe there are some much better options out there than buying a repossessed RV. Plus, there will likely be a lot of extra costs that you will need to take care of with a repo RV.
Sometimes, repo RVs cost more than their actual NADA value. This shouldn’t be surprising to you since usually more is owed to the bank than the repo RV is worth, as we mentioned above. Thus, be prepared to negotiate on starting bids.
To figure out a starting point, find out how the desired repo RV costs on average according to NADA guides and at RV dealerships. Ideally, the repo RV should be much cheaper than its average fair market value.
If it is not, then buying such an RV may not be worth your money. Remember, you may need to transport, as well as do some repairs and prepping in the RV, which may in the end inflate your costs over the average fair market value of the RV.
If such a thing happened, it would mean that the repo RV has been a waste of money and that you should have instead gotten a used RV from an RV dealership, for example.
Inspect the RV
No matter how comprehensive the RV description provided by the seller may seem, you absolutely need to do an inspection yourself or have it done by a professional if you can’t do it in person. If the seller doesn’t allow you to inspect the RV before the purchase, look for another deal.
Determine when and for how long you will be able to inspect the desired RV. You may be able to appoint an inspection beforehand, and you might even be able to test drive the repo RV you are interested in.
No matter what options you are provided with, be sure to do an in-depth inspection of the RV in order to discover issues that require fixing.
Bid on the RV
Using the information you’ve acquired in the prior steps, come up with a sum that you will not go over when bidding on the desired RV. Bid at or just above the price given by the seller.
When bidding online, you may have the option of setting a maximum bid amount and enabling absent bidding. The system will then automatically bid up for you up to your set maximum.
Carefully read the seller’s terms and conditions
It is crucial that you carefully read the seller’s terms and conditions and understand all the disclaimers, instructions, and your obligations. If there are any kind of guarantees on the RV, you’re going to find info about it in the seller’s terms and conditions.
Pick your RV up and make it street-legal
After you’ve outbid other bidders, made the payment, and signed the necessary paperwork, go and pick up your RV from the lender. But before you can finally enjoy it on the road, you need to make it street-legal just like you’d do with any other car. Re-title the RV in your name, have it insured and registered, and make sure that you’ve done all the repairs in order to make it street-legal.
Is buying a repo RV really worth it?
Now, we’d like to help you answer the question of whether a repo RV is worth it.
You can indeed save thousands of dollars by buying a repossessed RV. But there are some factors that can significantly affect the real benefit you are getting from buying one. Let’s have a look at them.
Finding a repo RV can be very time-consuming
It could take months for you to find a repo RV in a good condition and for a price tag that is good enough for you. The factors that we’ve explained above really make repo RV research a time-intensive task, and you need to be prepared to put the time into it.
What this also means is that if you are in a hurry, trying to find a good deal on a repo RV isn’t the most efficient way of acquiring an RV.
Inspection & transportation costs
Among the extra costs associated with getting repossessed RVs is their transportation costs. Most likely, the desired repo RV isn’t going to be situated in close vicinity to you. Moreover, you may need to bring it across several states and hundreds or even thousands of miles.
And it’s not only about mere transportation. Before deciding whether to buy the repo RV or not, you or someone you trust will need to go and inspect it in order to evaluate future repair costs.
So at this stage, you need to decide whether you are willing to spend hundreds or maybe even thousands of dollars on going to inspect the RV (or having someone else inspect it) or on its delivery to your doorstep.
After the transportation costs come repair costs. Very often, repo RVs require some kind of repair works to be done. RVs may look impressive, but they are fragile and prone to problems, sometimes requiring expensive repairs.
And depending on how the previous owner has treated the RV, you may need to spend thousands of dollars on bringing it back to shape, not to mention that you may want to replace or add some appliances or install 50-amp service, for example.
Whether you are planning to hire someone to do the repairs or will be doing it yourself, determine if you will be able to afford the repairs in the first place. In addition, since problems can unexpectedly occur within the first week of RV use or so, determine whether you have enough room in your budget in order to afford extra repair costs.
If you are buying an RV from an auction, you will most likely have to pay some kind of auction fees. Well, how costly are those fees going to be? And won’t they make the entire repo RV buying process not worth it for you? These are just a few questions that should be given an answer when looking for a repo RV from an auction.
Check also whether there still is a warranty on the unit. If there is, check whether it transfers to you and if you have to pay any transfer fees. This will likely be a minor cost, but if you are tight on your budget, even an additional $100 is going to play a role for you.