Motorhome Basics | FMCA
In addition to foot traffic on a sales lot, a consignment dealer can expose your motorhome to potential buyers through advertising, direct mail, Web sites and e-mail. Some dealers market to a large customer base and claim to have an existing buyer for your particular coach.
Services that consignment dealers usually offer include:
- Establishing a fair market price for your RV
- Advertising in traditional and electronic media
- Handling the paperwork to get your RV paid off
- Accepting trade-ins or paying immediate cash for your RV
- Arranging RV financing for buyers
For a fee, dealers may offer these services for your RV:
- Systems check
The typical consignment period is one month or 90 days. The dealer may charge a set commission, such as 10 percent of the selling price. Or, the commission may be based on the value of the motorhome and the final selling price. Some dealers might charge a one-time set-up fee as well.
PPL Motor Homes in Houston, Texas, charges a 10-percent commission, due once the RV is sold. The minimum commission is $1,475 for diesel pushers, motorhomes and van conversions.
The insurance factor
RV consignment dealerships are often visible from major freeways. Dealer lots may be fenced, paved and well lit. Some may have surveillance cameras or conduct random security checks at nighttime.
Despite safety and security measures, a consigned RV still can be damaged by fire, vandalism, falling objects, inclement weather, or in a traffic accident during a test drive.
Therefore, before signing a consignment agreement, ask your insurance agent whether your RV will be covered while it’s consigned on a dealer’s lot.
Chances are it will not. Your policy probably contains a consignment coverage exclusion. For example, under Physical Damage or Dealer Possession for Sale, it may state:
“If your insured recreational vehicle is in the custody of someone else for the purpose of selling, renting or leasing.”
Most dealerships advise RV owners to consult their insurance company prior to consigning a vehicle. If a dealership does not broach this topic — they’re not required to do so — RVers might presume their RV is covered by their own insurance, if not the dealer’s.
But not everyone reads or remembers the fine print of a lengthy insurance policy. And when reviewing coverage, agents are more apt to focus on what is covered, rather than point out what’s not covered should the owner decide to sell it.
Different insurance companies use slightly different language to describe policy features, and policies vary by state and company. So, be sure that you understand the specific terms used in your policy quotation, and what they cover.