Buying an RV is a serious investment that pays off in years of cherished travel memories.
Though a lot of people who finance an RV often find themselves thinking about selling it which has still a loan on it.
Maybe your children have outgrown the old camper and need something with a little more elbow room, or maybe they’ve grown and have left the nest.
Whatever the reasons are for wanting to sell your RV, the devil is going to be in the details.
Dealing with an existing lien is one of the biggest details that have to be taken into account when selling an RV.
Though even if there is a lien on a vehicle or RV, there are still ways to sell it to a third party or a dealership.
If you are thinking about selling a motorhome, fifth-wheel or travel trailer that has a lien placed against it, this article will help you understand all the key points in the process of selling a camper with outstanding debt or finance.
This includes understanding your financial responsibilities, the paperwork that might need to be filed, as well as valuing your camper to make sure you are getting the proper amount for it.
What Is A Lien And How It Work?
Anytime you finance something of great value, such as a home, vehicle, RV, or another valuable piece of property through a loan the financial institution that carries the debt will place a lien against the property.
This includes the name of the lender as well as a certificate of title as a lienholder.
A lien is a legal right on some property granted to a creditor. It essentially acts as a definitive obligation, for the repayment of the loan over time. If the stipulations are not followed the financial institution may seize the asset that is the subject of the lien.
Once the loan has been fully repaid in full, the lien holder’s name is removed from the title and the legal owner can sell the property in question without complications.
Relate: How To Get A Title For A Camper Without Title
If the owner of the property attempts to sell the vehicle, the remaining debt needs to be addressed.
If certain conditions are not met, the sale of the property cannot be completed.
In terms of campers and RV liens, one is issued from a financial institution that borrowed you the money to purchase the RV. There are special responsibilities that come into play when you try to sell a camper you owe money on or is NOT paid off, as the outstanding debt needs to be repaid to the financial institution in one form or another.
Can I Legally Sell A Camper With A Lien Against It?
The short answer is, yes you can legally sell a camper even if you still owe money on it by a financial institution or another type of creditor. Though you need to account for any remaining debt on the camper or RV.
How to Sell Your RV With A Lien on It
Selling a camper with a lien on it isn’t all that hard. You just have to be careful to follow through with all the procedures and make sure that the outstanding debt owed to the financial institution is properly repaid or that you meet their previously stipulated conditions.
Here are some steps you need to take to sell an RV that you owe money on:
Step One: Determine Your Camper’s Fair Market Value
Accurately determining exactly how much you owe is one of the most important steps in selling any RV with finance owing on it.
Not only does this ensure that you have enough capital available to repay the original loan, but it also ensures that the third-party buyer is getting a good deal.
There are a few ways to determine the “Fair Market Value” of a motorhome or a camper trailer.
If you price the camper you are selling below the fair market value, then you might not recoup enough capital to fully repay the original loan.
Depending on your local laws this could interrupt or void the sales process.
If you attempt to sell the camper for more than the fair market value, any potential buyer might be put off.
This could send them directly to a competitor camper being sold, or even a dealership that’s offering a better deal.
Right off the bat, it’s important to note that there is a major difference between the fair market value you can try to sell a camper at and the original base price you purchased it for.
The base price is what you borrowed from the institution. It includes the cost of the camper itself along with the registration fees, insurance fees, and taxes, minus any down payment you put into the equation.
This base price was the initial principal of the loan before interest. To determine the remaining amount of the lien placed against the camper, you will need to look at your most recent statement.
Somewhere on there, you will find a term like “Remaining Balance” or “Remaining Principle.” This amount must be paid back to the financial institution as part of the resale process.
Are There Guides With Published Camper Prices?
The good news is that more and more estimators and companies are coming out with pricing guides like the NADA.
Even Kelley Blue Book has started putting up pre-owned RV prices for some choice models.
Just bear in mind that these are only rough estimations and you should see them more like a first place to start rather than the be-all, end-all definitive guide to using for determining the asking price of your camper.
Condition and things like mileage as well as necessary maintenance can all be factors that affect the underlying value.
So, it’s best to turn to our old friend on the internet to look up comparable prices.
You can start with a website like RVUSA which features a lot of popular RV specs as well as ads from private sellers.
You can enter your own make and model into their search engine to find some comparable models.
This will help you determine a fair asking price for your motorhome, fifth wheel or a travel trailer, as well as give you a better understanding of what your prospective buyer is seeing during their own shopping process.
Step Two: Choose How You Want To Sell Your Camper
There are a few different options to consider when it comes to selling a camper or RV with a lien placed against it.
Selling to a private party has higher profit potential, though it takes time and can be wrought with frustrations.
Whereas selling to a dealership or on consignment is much more convenient, though likely to leave you with less profit, which might mean having to pay money out of your own pocket to satisfy the outstanding debt on the loan.
Some dealerships will offer consignment selling, though this takes even more money away from your bottom line on the camper sale.
Selling A Camper On The Private Market
Right off the bat, when you post your original ad in the newspaper or online, you need to note that there is still an outstanding lien on the camper.
Though the rest of the ad still needs to be compelling. You can expect a lot of questions and dry leads that don’t pan out.
So, don’t expect to sell a pre-owned camper with a lien on it quickly. This is a week if not months-long process.
Selling A Camper To A Dealership
Going to a dealership to sell, trade-in, or traded own on your camper is going to be the easiest way to sell a camper with a lien.
Though it’s also the option that is least likely to yield a profit on the sale.
A trade-in or a trade down through a dealership basically means they are taking the pre-owned camper off your hands at a stated price.
In general, the higher the base price is on the new camper you are buying, the more the dealership will give you for the camper you are trading in.
They are making another sale, and chances are they can still turn a better profit for themselves on your older camper in the works.
This might be a great option if you are looking to upgrade or downsize as your family travel needs change.
Selling A Camper On Consignment
If you are a busy person and you don’t want to deal with the time and mess of selling a camper to a private party, you can put your camper on consignment with a dealership or a consignment sales specialist.
Though they will take a piece of the profit with them and that piece will be larger and large depending on how long it takes for them to sell the camper.
This is only really an option for someone who is very short on time and only owes a small amount on the original camper.
This makes it easier to lose a portion of the proceeds to the dealership or consignment salesperson.
Step Three: Compensating For The Outstanding Debt
Once you have a good idea of the fair market value of your camper, you can start comparing that number to the amount you still owe on the load.
The financial institution you borrowed the money from will want repayment, or in some cases, they might let you transfer the load to a qualified buyer.
Though you should never assume that this is a slam dunk certainty.
If the fair market value or the offer price of the third party buyer is less than what you owe on the camper, you may need to come up with money out of pocket to fully repay the loan.
If the offer price is more than what you owe on the loan, then you could walk away with a tidy little profit.
Step Four: Closing The Deal With An Escrow Account
Escrow is a way to add an additional level of security during the transaction process.
In this method, the purchaser essentially deposits the money for the same in an escrow account, which is only released to the seller when the title transfer is completed and the lien card is released.
This does incur some additional fees, which are sometimes split between the buyer and the seller because it protects the interests of both ends.
Step Five: Closing The Sale & Dealing With Paperwork
The sale can be completed by arranging a meeting to get the title signed over to the buyer and the lienholder’s debt paid off.
The debt can be paid off either via the seller paying it off directly or the debt being transferred over to the buyer, assuming they are qualified through the lending institution.
If you don’t have the capital needed to pay off the loan after the sale, you might need to first secure a bridge loan.
This is essentially a new loan that will cover the difference between what you are selling the camper for and what you owe.
If the lending institution doesn’t offer one or you don’t qualify for a bridge loan, then you will need to come up with the remainder out of your own pocket.
Are There Other Options For Selling An Camper Or Pre-Owned RV
There are a few other ways to sell a camper or pre-owned RV. This includes leasing it to a private party as part of a contract for deed. Though not all states allow this with a financed property.
Another option to consider is to rent the camper through a third-party website like Outdoorsy.
This is a great way to make a fair amount of profit for the times when you aren’t using your RV.
Then you can use the money maid renting it out to pay down the load or to cover the difference if a bridge loan isn’t available.
What Is A Lien Release Card?
A lien release card is a simple card issued from the lending institution that states you have met your financial obligations to them.
This means you have paid off the loan and the title is clean for transfer to a potential seller.
You might also need to provide a lien release card to an insurance agency if you want to downgrade your coverage to just liability.
Plenty of people sell their campers or pre-owned RVs when the size of their family changes.
This might be your kids getting older and needing more space of their own in the camper when you travel, or it might be that they have left the nest and it’s time for you and your spouse to downsize.
If you have the time, and patience you will certainly get more money by selling your camper to a private party.
This will also help reduce the need for a bridge loan by turning the maximum amount of profit.
If you don’t have the time, and you are nearly paid off or looking to downsize your RV needs, then going to a dealership might be the perfect answer for paying off your camper with a lien remaining against it.