Warning For Anyone Planning To Trade RVs

[HBarlow]

I'm not a member of Escapees, the organization for full-time RVers but occasionally browse on their website and post less frequently.

Recently there have been two significant threads on the Escapees Discussion Forum reporting a financial disaster that has occurred when trusting RVers have traded a motorhome with an outstanding loan balance for a newer motorhome. Both incidents occurred with the same Alabama dealer using the same credit union but it could happen with any dealer anywhere.

What happened in each case was the buyer traded in his or her motorhome for a newer one and signed a purchase contract and new loan agreement borrowing enough money to pay off the balance on his existing loan and financing the balance of the new motorhome. The buyer took possession and drove away happily thinking all was well.

After the transaction was completed the RV dealer closed his doors and went out of business, probably under a mountain of debt. The dealer did not use the proceeds of the customer's new loan to pay off the loan balance on the trade-in and, in a previous transaction, did not pay off the balance of a prior loan on the motorhome that was new to the buyer but had been traded in by another customer.

I know this may be confusing but in summary the end result is the buyer has a new used motorhome with a loan and the dealer did not provide a title to his lender to secure the loan. Worse, the dealer had taken the motorhome in on consignment and sold it and neither the registered owner or his lender were paid for the unit so no title will be forthcoming. EVEN WORSE, the dealer sold the unit the new customer traded in and it is in the possession of an unknown new owner without a title. The new customer is still responsible to the lender for the remaining balance of his old loan.

This scenario may have cascaded including many more who traded in used RVs or purchased used RVs, some may not know it yet, some others may be simply enjoying their new to them RV and may be making no payments to any lender.

All this happened because that dealer was in financial trouble and the new buyers innocently assumed the dealer would meet his obligations. Many of us have traded in a car, truck, or RV with a small unpaid loan balance trusting the dealer to pay off the original loan and went away happy.

When sales are good this is probably an acceptable risk. In a time when RV sales are very slow and some RV dealers, RV manufacturers, and even RV lenders are in financial trouble, buyer beware!!