Have you ever wondered what decides how much we pay for cars, boats, and rvs? Who determines what is fair market value for an motorhome?
When researching prices for the class A units I feature on this website, I use Nadaguides because it is considered the most authoritative source for value comparison…but why?
The NADA story
Nadaguides (or NADA for short) stands for the National Automobile Dealers Association. Formed more than 100 years ago back in 1917, it is considered the bible for industry pricing on automobiles, boats, trailers, and motorhomes.
First a little history…
Nada as an organization that has its foundation rooted in political activism. In 1917 a group of about 30 dealers got together to form an association to go up against the federal government!
They had proposed to apply a 5% sales tax on the sales of all vehicles. So they went to Washington to convince congress that cars are a mass consumer good, not a luxury item and that autos contributed for the good to the nation’s economic health.
Apparently they were effective in changing the minds of legislators because not only did they persuade congress not to apply the tax, they got them to decrease the already in effect luxury sales tax from 5% to 3%, and circumstantially prevented automobile factories from being converted to war factories during WWI.
Recognizing the ongoing need of an organization to tend to the political and economic interests of auto dealers, the first president of NADA was elected in Chicago in 1917.
NADA is the largest national trade group in the country. The prices listed on their consumer site reflect an average compilation of sales from hundreds of thousands of individual transactions from the busiest dealerships all across the country. So they present a strong data point from which to base values.
Things to keep in mind:
- The values listed on NADA are based strictly on data from participating member dealerships, which happens to be most major dealers in the country.
- Most lenders use NADA exclusively when determining loan-to value ratings, making it an important consideration for determining what an rv can be sold and traded for in dealerships and therefore even in private sales.
- Although no guide is 100% accurate in that it can reflect every possible data point given by the industry, Nada can be used effectively to negotiate prices in dealerships and to come up with ballpark price points for buying and selling privately.
How to use the NADA website
- go to nadaguides.com/RVs
- choose your rv type:
3. Research motor home by make and model….there are 100’s!
4. Put in the correct year, then click on the model in blue.
5. Once you click on the make and model you will be prompted to enter your zip code.
From there you will be taken to get base pricing. If it is a diesel motor home there is no need to put the mileage, but you will need to if it is gas.
6. And voila`! You’ve got a base price (what most dealers use) from which to compare on shopping for or selling your motorhome.
As you can easily see there is HUGE discrepancy between the suggested list price, low, and average retail. Most of us are aware to never pay that!
There are other considering factors though, such as the condition of the unit, any options it may come with and seller incentives when you are gauging what is a fair price.
I get a special thrill when I find a motorhome that is being sold considerably beneath low retail. As long as it is clean and running efficiently it warms my heart to know I’m not being ripped off and am in fact being given a fair price.
The Bottom Line
Although the values in Nadaguides are an arbitrary measurement…they are still a very useful guide in terms of determining what is a fair market price.
I hope this post was helpful to you. Please drop me a line if you have any comments or questions.