Buying an RV is more than just a purchase, it’s the dream of the open road, adventure, and the freedom to explore whenever your heart desires. But if you’re not careful, that dream can come with a few unpleasant surprises at the dealership! We are here to pull back the curtain and uncover the 4 ways RV dealers make money.
We will break down the sales tactics they use, and show you how to protect yourself so you can make a smart, confident purchase, without the regrets.
Table of Contents
Dealer Markup
Trade-In Margin
The Monthly Payment
Hidden Profit Stream
Tactics Dealers Use
Get a Good Deal
The More You Know
What Dealer Markup Really Means
The first misconception many buyers have is that the markup on RVs is fixed, or set in stone. Historically, some manufacturers have set MSRPs (Manufacturer Suggested Retail Price) with high profit margins for dealers, sometimes as high as 40%.
This was more than double the typical markup found in the auto industry (around 18%).
Why so high? The extra room allowed dealers to:
- Cover generous trade-ins. If a buyer expected top dollar for their 20-year-old RV, that margin gave dealers wiggle room to “overpay” on the trade while still making a profit.
- Roll in extra debt. Many buyers used RV financing to consolidate credit card or personal loan debt. Because RV interest may be tax-deductible (as a second home), dealers could bundle more into the loan, and still earn from the inflated price.
At its core, markup is simple: Price You Pay to Dealer – Price Dealer Pays Manufacturer = Dealer Markup. The difference is the profit.
Example: If a dealer buys an RV from the manufacturer for $60,000 and sells it to you for $75,000, their markup is $15,000.
Markup allows dealers to absorb trade-ins, bundle extras, or discount certain units while still earning.
How Trade-In Margins Work
About 25–35% of RV buyers trade in their old RV when purchasing a new one.
Here’s the formula:
Dealer’s Sale Price – Dealer’s Purchase Price = Trade-In Profit
Two numbers go into this calculation:
- ACV (Actual Cash Value): What your RV is worth wholesale.
- Allowance: What the dealer offers you for it.
Example: If your trade has an ACV of $20,000, but the dealer gives you an allowance of $22,000 toward a new RV, they may list and sell it for $28,000. The difference is their margin.
It feels like you got “top dollar,” but the dealer already factored that profit spread into the deal.
That’s why trade-ins are so attractive to dealerships, they make money twice, once on the sale of your new RV and again when they resell your old one. As a buyer, the smartest move is to know your RV’s true ACV before you negotiate, so you can decide whether to trade it in or sell it yourself for maximum value.
The Monthly Payment Magic Trick Dealers Use
RV LOAN SECRETS: THE INSIDER HACKS DEALERS WON’T SHARE (BUT WE WILL)!
RV dealers know that many buyers only focus on their monthly payment, not the total cost of the RV.
This gives them the freedom to manipulate the:
- Price Inflation: Dealers may quietly inflate the RV’s price, knowing that you’ll only look at your monthly payment rather than the total price.
- Higher Interest Rates: They may offer you a loan with a slightly higher interest rate than what you qualify for, padding their own pocket.
- Extended Loan Terms: By stretching out the loan term from 15 to 20 years, they can keep your monthly payment low. But this comes at a cost—more interest over the life of the loan.
They keep your payment low, but you end up paying thousands more over time.
Smart Move: Always request a full breakdown of the loan, showing the total repayment amount, APR, and the total interest paid over the loan term. Don’t just focus on keeping the payment low, focus on the big picture.
Parts, Service & Accessories: The Hidden Profit Stream
The sale of the RV itself is often just the beginning of a dealer’s profit stream. Where they really build long-term revenue is in parts, service, and accessories.
- Labor: Most dealerships charge between $150–$200 per hour for service work. Since many RV issues require multiple hours of labor, even routine repairs quickly add up.
- Parts & Accessories: Items like awnings, solar panels, backup cameras, and leveling systems often carry significant markups. What might cost a dealer $300 wholesale could easily retail for $500–$600 installed.
- Maintenance Packages: From winterization to roof resealing, dealerships push recurring maintenance services to keep you coming back year after year.
- Collision & Warranty Work: Dealers also get reimbursed by manufacturers or insurance companies for warranty and collision repairs, which helps stabilize their income during slower sales seasons.
This part of the business is often more reliable than RV sales themselves because every RV, new or old, eventually needs maintenance.
For buyers, it’s important to shop around, ask for itemized estimates, and know that some upgrades can be installed by third-party shops for less.
Tactics Dealers Use (and How You Can Outsmart Them)
Once you’ve agreed on the RV, the real sales pitch begins, in the finance office, often called “the box.” Here, dealers try to:
- Flip your financing. They want you to use their lenders because they earn a cut of the interest.
- Sell soft add-ons. Extended warranties, fabric protection, tire coverage, these can carry 200–300% markups.
- Use emotion. Tactics like the “Bob and Mary” pitch guilt buyers into buying unnecessary life insurance.
Smart Strategy: Come in with pre-approved financing from your bank or credit union. This will give you leverage to avoid the dealer’s high-interest rate deals. Also, resist the pressure to buy add-ons. The warranty on the RV itself often covers many needs, and extended warranties rarely offer good value.
How to Actually Get the Best Deal on an RV
Understanding how dealers make money is only half the battle—the other half is knowing how to use that knowledge to your advantage. Here are key strategies to secure the best deal possible:
Do Your Homework First
- Research the invoice price (what the dealer pays the manufacturer) whenever possible. Even if you can’t get the exact number, knowing the typical markup range (20–40%) gives you room to negotiate.
- Check your trade-in’s Actual Cash Value (ACV) with multiple sources (NADA Guides, RV Trader, local listings) so you’re not at the mercy of a single dealer’s appraisal.
Separate the Deals
- Negotiate the new RV price first, without discussing your trade-in or financing. Once you’ve locked in a fair price, then bring your trade into the conversation. This keeps the dealer from playing with numbers across multiple areas to hide profit.
- Treat financing as its own negotiation. Come with pre-approved financing, then see if the dealer can beat it. If they can’t, stick with your bank or credit union.
Question the Add-Ons
- Extended warranties, paint/fabric protection, and tire coverage are all high-margin items for dealers. Don’t buy them on impulse.
- If you want coverage, shop third-party providers to compare pricing—you’ll often save 50% or more.
Time Your Purchase
- Dealers are more motivated to cut deals at the end of the month, quarter, or model year when they’re chasing sales quotas or clearing old inventory.
- Off-season buying (late fall and winter) also increases your leverage.
Negotiate Beyond the Price
- Ask for freebies like a starter kit, hitch installation, propane fill, or even a few hours of labor credit in the service department.
- Sometimes these extras are easier for the dealer to give than dropping the price further, and they still save you real money.
Get It in Writing
- Always request an itemized breakdown of price, financing, and add-ons. If something looks inflated, call it out.
- Don’t sign until the “out-the-door” number matches what you agreed to…no surprises.
Bottom line: A “good deal” isn’t just about paying less up front. It’s about understanding the moving parts—markup, trade-in values, financing, and service, and making them work in your favor. The more prepared you are, the harder it is for a dealer to play the numbers game.
The More You Know, the Better Your RV Purchase
Buying an RV is an exciting process, but it’s also a financial decision. With the right knowledge, you can navigate the complexities of the RV buying process and avoid common pitfalls.
Dealers will use every tool to increase their profit, but when you’re armed with knowledge of how they make money, the tactics they use, and the best ways to spot hidden fees, you’ll be in a position to negotiate a deal that works for you.
Remember, the goal is to enjoy the open road, not get taken for a ride. So shop smart, plan ahead, and when you sign those papers, do it knowing you got the best deal possible!
Written By: Brooke Erickson
Some say I am a writer, I like to say I am a storyteller