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Old 05-18-2014, 03:28 PM   #15
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... Most people with higher end coaches are either going to sell their used coaches outright or trade them in at a dealer when they buy a new one. Most of the time when coaches end up at auctions is when a dealer who took a coach in on trade can't sell it and wants to get rid of it; or a finance company repossess one and wants it off their books.
Good points ... It does make sense that the ONLY supply of High-End coaches that makes it to Dealer Auctions would most likely be from bank repossessions. Not too many dealers are going to have trouble selling a Newell or Cornerstone that they took in as a trade in.

So this business idea may show a market need but not enough supply of high end coaches to make it practical to start a new used RV dealership.

Hey, in a few years, I'll be in Texas. DW is there already. I'll look you up in this forum in a few years. You never know. A high end coach may show up at auction one day. May be your friend can help me buy it from the dealer auction
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Old 05-18-2014, 03:41 PM   #16
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Feel free to hit me up anytime, happy to help if I can.

I still give my buddy crap for buying a MH with a dolphin on the side for $5k, but he sold it for $12k in under two weeks and did nothing to it. I think there is money to be made, just think the high end segment is pretty tight and crowded.

Good luck!
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Old 05-18-2014, 11:23 PM   #17
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15%? You can easily find dealers selling new and used units at 5 % over. People think dealers are making crazy money. Just not true. I've personally seen high end coaches with list prices of 600k go out the door making only 5k. Dealers don't always make the money you might think.
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Old 05-19-2014, 08:12 PM   #18
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Feel free to hit me up anytime, happy to help if I can.

I still give my buddy crap for buying a MH with a dolphin on the side for $5k, but he sold it for $12k in under two weeks and did nothing to it. I think there is money to be made, just think the high end segment is pretty tight and crowded.

Good luck!
Buyers of older, less expensive rigs will be less choosy easier to sell. I made just as much money on cars I paid $500 as one I paid $5,000. And you have the option of reconditioning it for extra profit, before or after the sale.
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Old 05-19-2014, 08:23 PM   #19
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Dealer auctions are cash only...right?

.
You got that right.

Anyone with enough cash can buy a license and become a "dealer". As long as they bring the cash (or letter of credit guaranteeing same) to the auction, of course.
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Old 05-19-2014, 08:54 PM   #20
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15%? You can easily find dealers selling new and used units at 5 % over. People think dealers are making crazy money. Just not true. I've personally seen high end coaches with list prices of 600k go out the door making only 5k. Dealers don't always make the money you might think.
No. It's 15% above the cost of getting the RV at Dealer Auction. I would think that most dealers that get an RV at auction would do so in the hope of marking it up 75% to 100% when they sell that RV out of the dealer.

Also, these are used coaches. Not new ones.

For example, I think that a used Cornerstone that goes for $200K from a dealer lot, if a dealer gets it from a Dealer Auction, it may go for about $100K to $130K at the dealer auction. I'm adding 15% to that price for a purchase price of $115K to $150K, instead of paying the dealer $200K.
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Old 05-19-2014, 09:33 PM   #21
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There are another issues to think about. Usually condition is not sale ready, so there will be things that need to be done. Complicating this is the fact that you are not an actual dealer and will not be able to submit warranty claims. You can use another dealer, but it will likely cost you for trying to directly compete with them. Last is the issue of taxes. I am no accountant, but you have all kinds of issues there, just buying one and converting it to personal use.
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Old 05-20-2014, 06:56 PM   #22
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You got that right.

Anyone with enough cash can buy a license and become a "dealer". As long as they bring the cash (or letter of credit guaranteeing same) to the auction, of course.
I looked into the details of getting a used Dealer License. Depending on the state, some will require a business address with an office of a certain size, telephone for the business, a few parking spaces for cars or the RVs, a business sign out front, business insurance, etc. Then, they'll send someone to inspect the premises to make sure that you're set up as a business. Most states won't allow you to operate out of your home.

There are exceptions for what they called brokers. But, those cannot sell to the public. They buy from the auction and resell to other dealers.
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Old 05-20-2014, 07:09 PM   #23
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I just logged onto Manheim's auction site. I ran a search for Newmars for the whole country. Returned 17 hits, only 10 were for motorhomes. The newest motorhome was a 2007 Dutchstar. The only high end was a 2006 London Aire that Bank of America owned. The highest condition report for all the vehicles was a 2 (poor condition). You are not going to find high end coaches.
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Old 05-20-2014, 07:48 PM   #24
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I looked into the details of getting a used Dealer License. Depending on the state, some will require a business address with an office of a certain size, telephone for the business, a few parking spaces for cars or the RVs, a business sign out front, business insurance, etc. Then, they'll send someone to inspect the premises to make sure that you're set up as a business. Most states won't allow you to operate out of your home.

There are exceptions for what they called brokers. But, those cannot sell to the public. They buy from the auction and resell to other dealers.


I'd be interested to see a link to an example of such onerous State licensing regulations for selling cars, especially from anyplace where such restrictions are Statewide.

Most "no home based operation" requirements, for example, tend to be imposed as zoning restrictions, and by local jurisdictions-?
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Old 05-20-2014, 08:52 PM   #25
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I'd be interested to see a link to an example of such onerous State licensing regulations for selling cars, especially from anyplace where such restrictions are Statewide.

Most "no home based operation" requirements, for example, tend to be imposed as zoning restrictions, and by local jurisdictions-?
In California the DMV states you must have a business location to be a retail auto/boat/rv/motorcycle dealer:
https://www.dmv.ca.gov/vehindustry/ol/dealer.htm
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Old 05-20-2014, 09:25 PM   #26
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Honestly, I think the requirements for "Opening" a business would far outstrip the savings, and you will always have to worry about getting arrested for fraud, or something similar.

The bond requirement and defrauding the insurer could be the start of a quick fall down hill.
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Old 05-20-2014, 10:02 PM   #27
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Honestly, I think the requirements for "Opening" a business would far outstrip the savings, and you will always have to worry about getting arrested for fraud, or something similar.

The bond requirement and defrauding the insurer could be the start of a quick fall down hill.
People do start used car dealerships all the time. And yes, you must do as required by law. Just like for every business you get into.

But, I think my idea would not work simply because of the lack of supply. Not many high end coaches seem to make it to dealer auctions. Bummer!
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Old 05-21-2014, 08:25 AM   #28
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From a tax perspective opening the business is the easy part. The difficulty is that you are assuming you can walk into an auction and find exactly what you are looking for in a condition that will be suitable. We have one client who does exactly what you are suggesting. He struggles to survive because he has to go to an auction, win the bid, and then find a sale for what he purchased. Traditionally auctions do not have high end motorhomes. Mostly he was dealing with low end or old rigs that may be hard to turn over into a profitable sale.

I understand the logic of the dealer only type of transaction, but I think it is being way over simplified in what is being stated here. No dealer in their right mind would take a rig worth $200,000 to an auction to get $100,000 for it. If the unit is worth $200,000 then the dealer will get that amount or close to it rather than take a huge hit. Any dealer that is auctioning off units for that much of financial hit won't be in business for very long.

The only possibility of success that I see in this type of transaction is the repo rigs and to find exactly what a buyer would want in exactly the condition the buyer would want is more than a little bit risky. Just like the foreclosed stick and brick house that the owner knows is going to be gone, the odds of that repo being well maintained are pretty slim.
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