The RV Repo Marketplace: Save Thousands By Buying Used RVs From Repo

In this economy there is a lot of enthusiasm to buy RV repos. Buying RVs that have been repo-ed is a great way to save thousands, but it takes a lot of work, fortitude, patience, and a strong mind.

What is a RV bank repo?

A repo RV is the same as a car that has been repo-ed, or a house that has been repossessed. It’s an RV that has been repossessed by the lender (or repossessed) and now they’re selling it so they can get rid of it. Often times, these RV depots are sold at a deep discount so the lender can take them off the books for him.

Many wonder why a lender would sell something at a discount. They typically leave thousands of dollars on the table when they sell their repossessed items. The answer is: the lender’s business is to lend money. If you own an RV that you are not getting paid for, you are not making any money. They are not set up to sell the RV at premium prices, because they are not a dealer; they do not have the systems set up to market and sell the repo RVs at a high price. They just want to get rid of them. The federal government has laws that require lending institutions to keep a percentage of the money they have lent in cash.

For example: Let’s say the bank has $1,000,000 in cash. In accordance with federal regulation, they can lend up to $10,000,000. At 7%, that generates $700,000 per year for them. Now let’s say you have an RV that you have rested on. The RV has a balance due of $100,000. Because they have this RV on their lot, and because they don’t receive any interest payments on it, instead of it being an asset, they have to record it as a liability. That means they have to subtract $100,000 from their cash fund. For them this is a loss of $70,000 per year! (Now they only have $900,000 cash they can lend, so they can lend up to $9,000,000. At 7%, that’s $630,000. So $700,000-$630,000 = $70,000!)

So you can see why lenders are desperate to sell any repo RV they have.

So where do I find a good RV repository?

First: The place NOT to find them is at a dealership. Many dealerships will find these lenders and develop business relationships with them. They will buy many RVs at once, get a excellent deal (often the lender will take a huge loss on an RV repository just to get you off their lot). The dealer will then advertise repo RV deals and try to get people to come buy these “amazing” deals. But typically, the dealer has marked up the repo RVs just below market price. If you go to a dealer, you are missing out on thousands of dollars in savings.

The first place to look is in your local newspapers. Auctions are usually advertised in the newspaper. You can also check with county offices to see if your state holds public auctions. When looking at repo RVs, make sure the lender’s name is on the title. This will tell you right away if the RV is a repository or not.

You can also check online. Beware of online scams! As a general rule of thumb, if you find an auction online (unless it’s an eBay auction), don’t get involved unless it’s local to you. You want to be able to see the RV you are bidding on and local is a much better way to go. Ask lenders if they lend on RVs, and if so, if they have any repos. Check with local credit unions, as they are the largest local lenders on RVs. This may take some time to develop a relationship with the lender before they will allow you to view any of their RVs. Remember a lender, having repossessed items is like having a messy house. They don’t want to let anyone they don’t know in because it’s embarrassing.

One of the largest subprime lenders for RVs is American General Finance. Subprime loans are loans made to people with less than perfect credit for a higher than normal interest rate. This is another place to look. Just be careful, it will be more difficult to work with someone who is not local.

Lenders who sell repo RVs will want to sell them as soon as possible and typically want cash on the title. However, sometimes if you’ve done a great job putting together a good report and have good credit, they’ll finance you on the purchase and may also give you a favorable rate.

What can I expect when buying a RV repository?

These banks may not do much to prepare the RV for auction. This is okay because if you know what you’re doing, you can get a really good deal.

You should look for units with low mileage and RVs that have not been lived in. Generator hours is a good indicator of usage and worn upholstery is another. Most RV Repos will be in excellent condition. Some may even come with many “upgrades” included in the base price, such as satellites, Internet access, and multiple slider outlets. Upgrades in used repositories affect the price much less than a new RV. The bottom line is that by purchasing a VR repository you can get more for your money.