In today’s world, RV dealers must be more creative and innovative to stay ahead of the competition. Dealers also need to provide the best products and service for their customers.
One of the greatest opportunities coming to the RV industry is a new buyer who was not previously in the market for an RV. This new buyer is the “unbankable” consumer. According to Experion, this new “unbankable” buyer is composed of several groups of future buyers and is one of the fastest-growing segments of consumers in our society today.
Many of these buyers have good income and the ability to offer down payments but do not have bank accounts, a credit history, or even Social Security numbers in some cases (such as people in the country on work visas). In this blog, I will review the five groups of new consumers that will be coming to your dealership looking for their RV purchase.
The first one is the younger buyer, typically in their 20s. This buyer previously lived in their hometown, usually with a family member and obtained a job nearby. Or, they would rent an apartment, usually committing to a minimum of a one-year lease, pay required deposits, and all utilities. This 20-something buyer is making a shift to a more flexible option with less commitment, deposits, and expenses. The RV dealership that offers affordable inventory will be prepared for this buyer. This younger buyer can own an RV for less than $25,000 and have a very functional, comfortable, movable, and downright fun place to live. Their jobs have become more flexible and many of them can live in whatever town they like.
The second potential buyer is “the hunter.” It does not take long to notice all the travel trailers on the move on our major highways and interstates. It also doesn’t take long to notice all the gear piled high in the back of their pickups, such as four wheelers, ATVs, deer corn, feeders, ice chests, and gas cans, etc. Many people have been cooped up for months and they are looking for any place to get away, unwind and enjoy some fresh air.
The third new buyer in the “unbankable” space is the family vacationer. This buyer is typically towing a bunkhouse model easily spotted with the double elongated windows filled with small stickers placed there by young kids in their respective bunks. In addition, the bike rack on the rear of the trailer with a concoction of bicycles thrown together is a sure sign as well.
The fourth is the single person between 40 and 60. This buyer is usually still in their prime working years, but usually is someone wanting less commitment than owning a house with yardwork, house maintenance, and property taxes. They usually stay for longer periods at local RV parks and might move to different locations that are requested by their jobs or type of employment. What easier way to accomplish this than by hooking up the trailer or vehicle to tow behind and wave goodbye while still owning everything around them.
The retired person, age 70-plus is the last group of “unbankable” buyers. While entering the later years in life, many Americans are ready to downsize, de-clutter, and just plain simplify their way of life. They want to be able to travel where the grandkids are and also see places they might not have visited in their earlier years.
The previously mentioned, these five groups of future RV buyers have one thing in common. About 30 percent (or 9.9 million people) of each group do not have access to traditional financing sources. Many are first-time buyers, part-time students, have no credit, have previous credit issues due to divorce, loss of family member, gaps in employment, or a previous medical condition. Not having a Social Security number or a bank account are additional reasons this buyer may not qualify for traditional financing.
The time is now for RV dealers to fill this need and offer a type of financing that is fair for the customer and for the dealer. This type of financing is called “In-House” or “Buy Here Pay Here” financing where the dealer becomes the lender for the RV purchase.
When structured properly, this type of financing provides an option to help the customer with the purchase, help with credit improvement, and prepare for all future purchases of RVs.
There are companies called “loan servicers” that will handle the collections side of in-house financing so the dealer can focus on sales. Many times, RV state associations will have a listing of these loan servicing companies.
Happy selling!
Eric Batchelor is the president of Alamo Financial, a Boerne, Texas-based loan servicing firm for “Buy Here, Pay Here” auto and RV dealerships. For more information, visit
http://www.alamofinancialcorp.com or email Batchelor at eric@alamofinancialcorp.com
