Buying a repossessed trailer can be a great, inexpensive way to take your family on vacation. Repossessed trailers are those that have been taken back by the lending institution after the lessee defaulted on the original loan. In most cases, you can find them in excellent condition for as little as 20% of the original cost. All RVs, including travel trailers, depreciate the moment they are driven off of the lot, and continue to depreciate for the next 2-3 years. However, the depreciation begins to level off after about 3 years of ownership. If you purchase a repossessed trailer that is somewhere in the 2-3 year mark of ownership, you can often turn around and sell it a few years later for at least what you paid for it, if not a bit more (depending on the discount you received in the first place). This makes it a much better investment than a new trailer.
Before you begin looking for your repossessed trailer, it may be helpful to understand a bit about the trailer repossession process. When a person takes a loan out on an item such as a trailer, he or she is also putting that trailer up as collateral. So, if the lessee is unable to make payments, the trailer is then taken by the lender in lieu of payment. Before repossession can take place, the lender has the legal obligation to notify the borrower. It must be clearly stated in the loan agreement that failure on the part of the borrower to make adequate payments will result in repossession. Often, an outside company, not the lender itself, does the repossessing. It is important to note that those performing the trailer repossession are under obligation to do no damage to the trailer or any other property. They are also prohibited from taking any other items other than the specific item being repossessed.
When looking for your repossessed RV trailer, begin with the same research you would do for a brand new trailer. Determine what your family needs in a travel trailer first. Are you looking for a something to protect you from the elements when you go camping, or are looking for five-star luxury on wheels? Do you want complete temperature control, including heat and air conditioning, do you want full entertainment capabilities, including satellite TV, radio and internet, or do you just want the basics? Are you looking for modest living space, or do you want to be able to entertain? Your trailer can also make an excellent guest house (or bedroom, depending on size) when you are not using it for travel, so consider those needs as well. You should also prioritize your needs with your wants. Because you are purchasing someone else’s dream, you may not be able to get all of the features that you want in a single trailer.
Once you have determined what you want in your trailer, you must then locate the repossessed trailers. Generally, these can be purchased at auctions. Auctions occur either in person or on-line. Both have their advantages and disadvantages. Regardless of how you purchase it, you should try to figure out the value of the trailer before you place your bid. While Kelly Blue Book and NADA are good starting points, these guides only provide the value based on year and mileage – they do not include upgrades. The best place to find the value of a specific trailer with upgrades is to look in RV magazines.
When you get ready to place a bid, do a thorough inspection. Check the upholstery, the water and sewage systems, the air system, the stove and refrigerator, as well as the mechanics of the trailer. If you do not have the proper expertise, consider bringing a mechanic with you to ensure that you do not purchase a lemon. Remember, you will almost never be able to purchase a warranty on a repossessed trailer, so a thorough inspection is extremely important.
Finally, be patient. The worst time to purchase a trailer, repossessed or otherwise, is right when you are ready to use it. Begin your search well before you want your trailer so that you are more likely to get closer to what you want. With some research and patience, you can have your family off and traveling in no time!
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