Newmar Pricing - What dealers are willing to deal?

[Newmar nut]

Originally Posted by pasdad1

God information. Our coach also had a leak at radiator cap where the boiler neck had separated. How did you fix this?

We were at Newmar at the time having other work done, when it was discovered, and had to have entire unit replaced because no way (or time) to start disassemble of unit when still in middle of 4 month trip 2000 miles from home.

Mine leaked on trip too. I just ran it enought to get water hot before pressure built up. Wasn't ideal, but managed. I ordered another tank instead of trying to have mine repaired. $750 Tore the oasis system out and replaced myself. Simple to do. no wires can get crossed with the way they put ends on. Just mark your hoses on top. IN and OUT for fuel and hydronic fluid. Use a syphon pump to pull fluid out of tank and vise grips to block the lines from draining. Electrical wires I marked well. Time comsuming, but you learn your system and save a big cost. The people at factory were very helpful.

[Ebwhite]

Same issue here. Was in the market for about the last 2 years. Waited for the canyon star Fred then COVID hit and took a break. Family has grown and we need bunks. Now we are set on a baystar.

Newmar is really screwed buyers with this 2022 allocations. It’s going to limit dealers to certain numbers so no incentive to seller orders at bottom dollar. It’s creating another supply side issue for dealers. Spoke to north trail and their rig was 11% off, independence was 13% off MSRP. I wouldn’t buy a baystar unless it was minimum 25% off. Coach light has zero gas rig allocations for 2022. I guess unless I find my deal, I’ll be shopping for another brand or waiting till 2023+

[lakebuster]

Goodness about as bad as the new Truck market. Brother In Law wanted a new Ford Super Duty. They had one left on lot and had a mark up of 5k over MSRP.

[Ebwhite]

Originally Posted by lakebuster

Goodness about as bad as the new Truck market. Brother In Law wanted a new Ford Super Duty. They had one left on lot and had a mark up of 5k over MSRP.

A local dealer around here has a hybrid Toyota RAV4 for 70k. Includes approx 3k in junk “protection paint pkg “ and a 15k dealer markup. But you can’t fix stupid and some buyers are stupid.

[NewmarDave]

Contact Tom Lindstrom RV.

[Ebwhite]

Originally Posted by NewmarDave

Contact Tom Lindstrom RV.

Contacted him about 2 years ago when first starting the search, his prices were high for an order. If I remember right he was around 18% off on a Kountry Star. Maybe it’s because he’s in CA unless somethings changed but I doubt it. He was extremely arrogant on the phone too.

[NewmarDave]

Originally Posted by Ebwhite

Contacted him about 2 years ago when first starting the search, his prices were high for an order. If I remember right he was around 18% off on a Kountry Star. Maybe it’s because he’s in CA unless somethings changed but I doubt it. He was extremely arrogant on the phone too.

Wow! I’m sorry to hear that. He’s always been a pleasure to deal with. Maybe caught him on a bad day. I know of a couple recent deals that he was well over 20% discount. Might be worth the call or try Steinbring if he’s closer to you. I’m getting my LA from him.
Good luck!!

[Ebwhite]

Originally Posted by NewmarDave

Wow! I’m sorry to hear that. He’s always been a pleasure to deal with. Maybe caught him on a bad day. I know of a couple recent deals that he was well over 20% discount. Might be worth the call or try Steinbring if he’s closer to you. I’m getting my LA from him.
Good luck!!

Definitely could have been a bad day....I'll have to reach out to him again and see. Thanks

[Alberts46]

I have attempted twice to get a price in the last year from him (Lindstrom) and BOTH times he never got back to me with a number. He responded to my introduction email so I know he got the follow up asking for pricing. I thought it was quite surprising with all the good reviews he had.

[BrettDavis]

A couple of posts in this thread struck a chord with me on a subject I’ve obsessed over since purchasing my first coach in 1985. In the “FWIW Column” I’ll share a few of my thoughts, and hopefully I’m offering up some additional “food for thought” when it comes to the “brain drain” of purchasing a new coach.

In my opinion, there are some eternal truths when it comes to the supply and demand of all markets. My first truth is… markets are just like gravity. And no one can defy gravity! I paid a lot of tuition early in my investment career learning this truth, but every time I’ve let my ego, or my emotions rule my decision making, gravity won, and I lost money.

My second truth is… markets peak when everyone thinks they’re going higher. We can all make our own judgments on where we think coaches prices are currently on a historical graph, but I’m betting we’re much closer to the top than we are to the bottom. And, even in a year of allocations, I’m guessing we’ll still see model year 2022 inventory on some dealer’s lots long after the 2023 models have landed.

Which brings me to the third truth I’ve learned about markets, and we’ve all heard it before… “pigs get fat, and hogs get slaughtered.” In every market, to varying degrees, there will always be too much supply, or too much demand, but there will never be perfect equilibrium. It’s either a buyers market, or a sellers market, and the key is to know whether you should be the buyer, or the seller.

And, the final truth I’ve learned as a 42 year career investor is dumb money ceases to be dumb when it know it’s limitations. Information is truly king!

As coach owners, I suspect we can all agree on a couple of things. One is, the RVing industry has thrived because we as RVers love the lifestyle, and certainly not because we love the experiences of buying, selling, or getting our coaches serviced. I also believe we can all agree we’re going to lose money on every single coach we purchase. They’re not investments. They’re a lifestyle.

So, what should our objective be when it comes to purchasing a coach? For me, it’s always been “bang for the buck!” I’ve always wanted to lose as little as possible, while still living the lifestyle in as nice of coach as possible. And, in my opinion, it all starts with not falling prey to the industry’s intended deceit through their use of “smoke and mirrors.”

Every manufacturer has a different markup from invoice to MSRP, and every model has a different markup within the same manufacturer. And, just as the industry’s marketing departments intended, this makes comparing discounts from MSRP between manufacturers, as well as between models within the same manufacturer, a fool’s errand when shopping for a new coach, and one the consumer falls prey to more often than not. The markup from invoice to MSRP ranges from less than 20% to as much as 60% depending on the manufacturer, and the model. That’s a huge range! And, it makes for a lot stupid financial mistakes at the purchase, just as the industry intended. Hence… “smoke and mirrors.” You’d better know, and trust your dealer!

Using the previously mentioned “stakes in the ground” of a 25% discount on a Bay Star versus an 11% discount, and trying to gauge the likelihood of either, I would offer up this observation. A 25% discount on a Bay Star will leave the selling dealer with less than a 5% Gross Profit on his cost for the coach. I believe we can all agree, a 5% Gross Profit margin will not allow many businesses to stay in business. It’s a quarter of what we tip a waiter. Yet, when converted to absolute dollars, and after all the attendant costs associated with delivering a coach (advertising, salesman commission, flooring, a tank of fuel, PDI, walk through, detailing, a starter kit, etc.) it will leave very little, if any dollars, for the dealer to pay his occupancy costs, utilities, staff, and general overhead. Even pre-Covid, I believe the likelihood of obtains a 25% discount on a current model year Bay Star, to be somewhere between very difficult and impossible. Now, I’m sure 25% plus discounts can be obtained on new, but prior year models (lot queens), however, the annual cost of ownership for these coaches always ends up being higher. Yes, it may be new, but to the next purchaser of that new to you prior model year coach, as well as to his lender, it’s still going to be a used coach with a Book Value on it. The fact you purchased a one, two, or even three model year old brand new coach will be of absolutely no moment to the next purchaser. From a market value standpoint, it started off as a one, two, or three year old used coach, and the “good deal” at the time of purchase will be illusory. Heck, a dealer will gladly give you a 25%, 30%, or even a 35% discount on new prior model year coach, because the coach’s Book Value has gone down 12% to 15% for every model year it has sat on the dealer’s lot. Financially speaking, these types of deals ultimately end up being the most costly coaches for a purchaser.

Now at the other end of what was mentioned, an 11% discount from MSRP equates to over a 24% Gross Profit. On a big ticket item like a coach, “pigs versus hogs” certainly comes to my mind.

In my opinion, the only number we should be using for comparative values when shopping for a new coach is the annual cost of ownership, or depreciation if you will. And, it’s really not a black box.

There are only three things which go into determining how much the annual depreciation cost will be when purchasing a new coach, and they are:

1. How much did the dealer make off you upfront?

2. Are you buying a quality manufacturer? A new Book Value comes out every 60 days, and lower quality coaches start depreciating faster right from the git-go.

3. And finally, the biggest factor of all, what will the coach sell for in the used market four or five years from now.

Every manufacturer, every model, and every floor plan, sells in the used market at varying premiums, or discounts to Book Value. Again, the range is huge! If the manufacturer is no longer in business, their coaches sell at 30%, or more below Book Value. So, when a salesman is telling you “this is a steal of a deal at 10% below Book,” and “you can immediately resell this coach for a profit”… RUN!!! For active manufacturers the discount to Book Value in the used markets ranges from a discount of 17% below Book Value to a premium of 30% above Book Value. When you apply a swing of that magnitude to the sales price of a coach you can quickly see why #3 has the single biggest impact on the cost of ownership.

I’ll wrap up my already very long post (the pitfall of some rare free time on a holiday weekend) with… is this a buyer’s market, or is this a seller’s market?

If you currently own a coach, and are looking to upgrade, I’ve never seen a better time to do so in my 36 years of RVing. Why?

Well, thanks to COVID shutdowns, followed by continuing supply chain disruptions, we’re now seeing some unprecedented events, and arbitrage heretofore not seen in the coach market. First, for the past six Book changes (that’s an entire year), Book Values have gone up all six changes in a row! That’s unheard of on an asset whose Book Value has historically declined 12% to 15% per year after the first year of purchase. Secondly, due to a severe shortage of coaches, demand has caused more than a 50% increase in the historical margin of used coaches versus Book Value. Those are two very unprecedented tail winds! Yet, the price increases from manufacturers (intra model year) are about 6%. I don’t ever recall seeing that arbitrage, and certainly nowhere near current levels. We’ve all heard people authoritatively state they’re “going to purchase a used coach, and let someone else take the depreciation hit on the new coach.” I’d argue the fallacy of that statement when it comes to coaches in any market, but I’ll save it for another time. However, there’s certainly no denying it’s fallacy in the current market. Bottom line, after six consecutive increases in Book Value (an entire year), plus a 50% increase in the margin used coaches sell for relative to Book Value, I have certainly never seen a better time for a current coach owner to upgrade.

Sticking with Bay Star, let’s break this down a little. First, during normal times a 2020 Bay Star‘s Book Value would have decreased a minimum of 12% over the past year, but instead it has gone up 5.83%. That’s a 17.83% delta alone. Now, add a whopping 50% increase in the historical margin to Book Value, and you get a total of 27% versus the 6% price increase on new! (Now you can really begin to see why it’s a unique time to upgrade). A 27% inflated value on a used coach, when compared to historical depreciation in the best of years of 12%, equates to 2.25 years (27 months) of depreciation! And, without ever having had the use of the coach. To put an explanation point on how bizarre the used market has gotten, the mean length of time someone owns a coach is 4.3 years, or 51.6 months. The seller of a used coach today is receiving 27 months worth of depreciation on a coach the next owner will statistically only own for 51 months! Again, what goes up must come down. No one can defy gravity, and probably sooner than later, used coach values will come back down to earth. There’s little doubt we’re in a seller’s market if you have a coach to sell.

I’ll end my musings here, drop the mic, and go spend some time with my family over this holiday weekend.

I wish you all safe travels, and a fun filled Memorial Day weekend,

Brett Davis

[brynwood]

How do you respond to that? Good job Brett I'd hire you in a minute, but you already have a job?
Good luck!

[GW4607]

Brett great information. I certainly am glad I ordered my coach from NIRVC Dallas. Hope to meet you when I take delivery in a few weeks.....I hope!

[Ebwhite]

Brett, you make sure interesting points with your depreciation and cost of ownership comments. Right now is an excellent time to sell a used RV but most are not getting the greatest deal on a new rig. If you look at both ends it’s mostly a wash in most trades but a new buyer may come out better due to the higher used values if they can obtain a good enough price on the new one.

Getting back to the comments on the MSRP. I agree a 5% margin is short, especially on a stocked unit unless there is some anomaly. However, as a buyer who is basically only needing a dealer to order a unit and take delivery to transfer in an out of state deal, it’s still a 10k gross profit on a 195k rig. Not all deals are equal and with little work, there is still profit. All deals cannot be that for a dealer to stay in business unless they can have that as a extremely high volume sales program. But dealers trying to pull 35k-40k profits on a simple “submit an order and let me come pick it up and I’ll take the papers” is not my style. In that case, I don’t need the rig that bad. I may keep the rig 5-15 years and definitely know the market won’t repeat this trend in the long term so I don’t like to buy based on how the used market looks over the next 6-24 months. Of course, you are right- these are not investments but a lifestyle. Overly Lining a dealers pocket in a paper pusher type sale would probably ruin the taste of the new lifestyle for me unfortunately- lol...To each their own though. Enjoy the weekend...

[willwoods]

Originally Posted by BrettDavis

A couple of posts in this thread struck a chord with me on a subject I’ve obsessed over since purchasing my first coach in 1985. In the “FWIW Column” I’ll share a few of my thoughts, and hopefully I’m offering up some additional “food for thought” when it comes to the “brain drain” of purchasing a new coach.

In my opinion, there are some eternal truths when it comes to the supply and demand of all markets. My first truth is… markets are just like gravity. And no one can defy gravity! I paid a lot of tuition early in my investment career learning this truth, but every time I’ve let my ego, or my emotions rule my decision making, gravity won, and I lost money.

My second truth is… markets peak when everyone thinks they’re going higher. We can all make our own judgments on where we think coaches prices are currently on a historical graph, but I’m betting we’re much closer to the top than we are to the bottom. And, even in a year of allocations, I’m guessing we’ll still see model year 2022 inventory on some dealer’s lots long after the 2023 models have landed.

Which brings me to the third truth I’ve learned about markets, and we’ve all heard it before… “pigs get fat, and hogs get slaughtered.” In every market, to varying degrees, there will always be too much supply, or too much demand, but there will never be perfect equilibrium. It’s either a buyers market, or a sellers market, and the key is to know whether you should be the buyer, or the seller.

And, the final truth I’ve learned as a 42 year career investor is dumb money ceases to be dumb when it know it’s limitations. Information is truly king!

As coach owners, I suspect we can all agree on a couple of things. One is, the RVing industry has thrived because we as RVers love the lifestyle, and certainly not because we love the experiences of buying, selling, or getting our coaches serviced. I also believe we can all agree we’re going to lose money on every single coach we purchase. They’re not investments. They’re a lifestyle.

So, what should our objective be when it comes to purchasing a coach? For me, it’s always been “bang for the buck!” I’ve always wanted to lose as little as possible, while still living the lifestyle in as nice of coach as possible. And, in my opinion, it all starts with not falling prey to the industry’s intended deceit through their use of “smoke and mirrors.”

Every manufacturer has a different markup from invoice to MSRP, and every model has a different markup within the same manufacturer. And, just as the industry’s marketing departments intended, this makes comparing discounts from MSRP between manufacturers, as well as between models within the same manufacturer, a fool’s errand when shopping for a new coach, and one the consumer falls prey to more often than not. The markup from invoice to MSRP ranges from less than 20% to as much as 60% depending on the manufacturer, and the model. That’s a huge range! And, it makes for a lot stupid financial mistakes at the purchase, just as the industry intended. Hence… “smoke and mirrors.” You’d better know, and trust your dealer!

Using the previously mentioned “stakes in the ground” of a 25% discount on a Bay Star versus an 11% discount, and trying to gauge the likelihood of either, I would offer up this observation. A 25% discount on a Bay Star will leave the selling dealer with less than a 5% Gross Profit on his cost for the coach. I believe we can all agree, a 5% Gross Profit margin will not allow many businesses to stay in business. It’s a quarter of what we tip a waiter. Yet, when converted to absolute dollars, and after all the attendant costs associated with delivering a coach (advertising, salesman commission, flooring, a tank of fuel, PDI, walk through, detailing, a starter kit, etc.) it will leave very little, if any dollars, for the dealer to pay his occupancy costs, utilities, staff, and general overhead. Even pre-Covid, I believe the likelihood of obtains a 25% discount on a current model year Bay Star, to be somewhere between very difficult and impossible. Now, I’m sure 25% plus discounts can be obtained on new, but prior year models (lot queens), however, the annual cost of ownership for these coaches always ends up being higher. Yes, it may be new, but to the next purchaser of that new to you prior model year coach, as well as to his lender, it’s still going to be a used coach with a Book Value on it. The fact you purchased a one, two, or even three model year old brand new coach will be of absolutely no moment to the next purchaser. From a market value standpoint, it started off as a one, two, or three year old used coach, and the “good deal” at the time of purchase will be illusory. Heck, a dealer will gladly give you a 25%, 30%, or even a 35% discount on new prior model year coach, because the coach’s Book Value has gone down 12% to 15% for every model year it has sat on the dealer’s lot. Financially speaking, these types of deals ultimately end up being the most costly coaches for a purchaser.

Now at the other end of what was mentioned, an 11% discount from MSRP equates to over a 24% Gross Profit. On a big ticket item like a coach, “pigs versus hogs” certainly comes to my mind.

In my opinion, the only number we should be using for comparative values when shopping for a new coach is the annual cost of ownership, or depreciation if you will. And, it’s really not a black box.

There are only three things which go into determining how much the annual depreciation cost will be when purchasing a new coach, and they are:

1. How much did the dealer make off you upfront?

2. Are you buying a quality manufacturer? A new Book Value comes out every 60 days, and lower quality coaches start depreciating faster right from the git-go.

3. And finally, the biggest factor of all, what will the coach sell for in the used market four or five years from now.

Every manufacturer, every model, and every floor plan, sells in the used market at varying premiums, or discounts to Book Value. Again, the range is huge! If the manufacturer is no longer in business, their coaches sell at 30%, or more below Book Value. So, when a salesman is telling you “this is a steal of a deal at 10% below Book,” and “you can immediately resell this coach for a profit”… RUN!!! For active manufacturers the discount to Book Value in the used markets ranges from a discount of 17% below Book Value to a premium of 30% above Book Value. When you apply a swing of that magnitude to the sales price of a coach you can quickly see why #3 has the single biggest impact on the cost of ownership.

I’ll wrap up my already very long post (the pitfall of some rare free time on a holiday weekend) with… is this a buyer’s market, or is this a seller’s market?

If you currently own a coach, and are looking to upgrade, I’ve never seen a better time to do so in my 36 years of RVing. Why?

Well, thanks to COVID shutdowns, followed by continuing supply chain disruptions, we’re now seeing some unprecedented events, and arbitrage heretofore not seen in the coach market. First, for the past six Book changes (that’s an entire year), Book Values have gone up all six changes in a row! That’s unheard of on an asset whose Book Value has historically declined 12% to 15% per year after the first year of purchase. Secondly, due to a severe shortage of coaches, demand has caused more than a 50% increase in the historical margin of used coaches versus Book Value. Those are two very unprecedented tail winds! Yet, the price increases from manufacturers (intra model year) are about 6%. I don’t ever recall seeing that arbitrage, and certainly nowhere near current levels. We’ve all heard people authoritatively state they’re “going to purchase a used coach, and let someone else take the depreciation hit on the new coach.” I’d argue the fallacy of that statement when it comes to coaches in any market, but I’ll save it for another time. However, there’s certainly no denying it’s fallacy in the current market. Bottom line, after six consecutive increases in Book Value (an entire year), plus a 50% increase in the margin used coaches sell for relative to Book Value, I have certainly never seen a better time for a current coach owner to upgrade.

Sticking with Bay Star, let’s break this down a little. First, during normal times a 2020 Bay Star‘s Book Value would have decreased a minimum of 12% over the past year, but instead it has gone up 5.83%. That’s a 17.83% delta alone. Now, add a whopping 50% increase in the historical margin to Book Value, and you get a total of 27% versus the 6% price increase on new! (Now you can really begin to see why it’s a unique time to upgrade). A 27% inflated value on a used coach, when compared to historical depreciation in the best of years of 12%, equates to 2.25 years (27 months) of depreciation! And, without ever having had the use of the coach. To put an explanation point on how bizarre the used market has gotten, the mean length of time someone owns a coach is 4.3 years, or 51.6 months. The seller of a used coach today is receiving 27 months worth of depreciation on a coach the next owner will statistically only own for 51 months! Again, what goes up must come down. No one can defy gravity, and probably sooner than later, used coach values will come back down to earth. There’s little doubt we’re in a seller’s market if you have a coach to sell.

I’ll end my musings here, drop the mic, and go spend some time with my family over this holiday weekend.

I wish you all safe travels, and a fun filled Memorial Day weekend,

Brett Davis

Brett, this is a well written and easy to understand synapsis of what the current market situation is with coaches. Thanks for taking the time to do this and put it into perspective. Hope to share a cup of coffee with you when my coach gets in at your Dallas NIRVC location in September.

Again, thanks for the time to put this post together.