By Ron Burdge
RV LEMON LAW ATTORNEY
Thinking of buying an RV that doesn’t come with a factory warranty? Be careful.
With Hymer North America shutting down, two things have happened. First, owners of the company’s RVs, camper vans and class B motorhomes [including Roadtrek], etc., have no warranty at all and no company to call for help. If that’s you, you are on your own.
You can go back and try to get coverage from your selling dealer, but it probably has no legal obligation to you and won’t get paid for any work they do unless they charge you for it. So you can bet what the result will be.
Second, RV dealers may have a lot of Hymer RVs on their lots and have to really chop the price to sell them “as is” and that may give you a good deal — or a bad deal!
Take a look at that MSRP price sheet first. The dealer profit margin can be gross, really gross. Using round numbers across the industry, it is pretty common for an RV of any type that has an MSRP of $90,000 to have been bought by the dealer from the factory for about $60,000. The dealer’s 1/3 profit margin is where you want to negotiate. Some will cut into the bone to get rid of stale tin or lot rot (an RV that’s been on the lot too long) or a new orphan (a new RV where there is no factory warranty).
If you are mechanically inclined, you may be able to fix some things that go wrong yourself. If you have enough money, you may be able to pay someone else to fix the things that you can’t fix. And, by the way, you can bet the odds are that things will go wrong.
So should you buy a dealer service contract (sometimes called an extended warranty) with that new Hymer over at your local dealer? Maybe, but watch out. First, it isn’t really a dealer service contract since most are just a contract that the dealer sells but doesn’t back themselves. The backer is usually some out-of-state company with a name that you may or may not have ever heard of.
Next, make sure the company that backs it is legit and not hot on Hymer’s trail. In other words, do your research, get the company name and check out internet reviews and Ripoff Reports, etc. Dealers often deal with several different warranty companies with different coverage levels.
Get a good warranty and get it backed by a good company; having been burned once, ask the dealer to give you its own guarantee by writing on the sales contract these magic words: “We will give you a 3-day warranty with this RV,” which will actually give you legal rights far beyond those 3 days.
And be careful you don’t end up with one of those “colander” warranties (with so many holes in it that all your money just goes down the drain); and watch out for the company that has such a bad reputation that next month it will be selling vitamins over the internet from Los Vegas.
Next, watch out for the price you pay — it can be a killer. Dealer’s often mark up their cost on a service contract — way, way up. If the dealer quotes you a price of $4,000, you can bet there is probably about $2,000 to $2,500 (more or less) pure profit in there for the dealer to keep.
Argue, bargain and negotiate a fair price that gives the dealer a fair profit. They know that with no factory warranty you will think you need one, so they’ll be looking to make big bucks off you. Get a little RV education on the internet (there are lots of free sources) so you can tell the dealer you already know enough about RV mechanics and are only interested in the warranty “for peace of mind.” And then argue some more about the price they want to charge you. Don’t take unnecessary chances.
Do your homework. And negotiate prices like heck. And be especially careful about an orphan with lot rot. Don’t waste your money.
Ron Burdge is one of America’s best known RV lemon lawyers. He has gained justice for countless RVers across the United States during his more than 30 years of practice. He is a frequent speaker at national seminars and conferences on Lemon Laws and Consumer Protection Laws. For more information or to contact him visit his website or call his office in Dayton, Ohio, at 937-432-9500.