‘Frugal Fatigue’ Drives RV Owners’ Dreams

January 17, 2011 by · Comments Off on ‘Frugal Fatigue’ Drives RV Owners’ Dreams 

Tim O'Brien

Tim O'Brien

Editor’s Note: The following column, titled “‘Frugal Fatigue’ Drives Dreams of RV Ownership” was written by Tim O’Brien, chairman of the Recreation Vehicle Dealers Association (RVDA), and appears in the January issue of RV Executive Today.

‘Frugal fatigue’ is a fairly new term to describe the mental exhaustion caused by constant frugality during hard economic times. While it is not an officially recognized disorder, it does reasonably describe the feelings many people are experiencing as they cope with long term cost cutting and constant monitoring of budgets and spending both at work and home.

At the outset of the recession, it was necessary for those who were laid off to cut costs; for others, reductions in their investments, pay checks and benefits, plus concern for accumulated debt, led to frugal habits. The economic and employment uncertainty caused many to postpone or dismiss dreams of purchasing an RV. However, living in such austere conditions over an extended period of time can wear you down and, let’s face it, old spending habits are hard to resist forever.

The evidence of frugal fatigue is that consumer spending is increasing, and I just read that Americans’ total spending on goods and services (not including automobiles) has returned to pre-crisis levels. Upper income confidence is rising. Luxury automobile and upscale retailers reported sharp gains in October.

We experienced the beginning of our recovery in 2010, and as frugal fatigue grows, I believe the dream of owning an RV will become more powerful than ever. It’s our responsibility to make those dreams come true.

RVDA has many programs and services to assist you as you finalize your preparations for 2011. I encourage every dealer to sign up as a Go RVing dealer and take advantage of the new Leads-Plus program for 2011!

Happy New Year and Good Selling!

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RVDA Advises Dealers on Exposure Risks

March 23, 2009 by · Comments Off on RVDA Advises Dealers on Exposure Risks 

Three RV manufacturers recently filed bankruptcy and two have halted production. Others simply went out of business, creating additional challenges for the dealers who sold those manufacturers’ products in the past or who have those companies’ products in inventory. 

Dealers can easily find themselves owed tens of thousands of dollars, or more, from manufacturers for warranty reimbursements, incentives, and other spiffs that become virtually uncollectible if the manufacturer ceases its business operations. This challenging business environment means RV dealers should re-evaluate their manufacturer business partners, and determine their exposure to risks from a manufacturer, according to RV Executive Today, a publication of the Recreation Vehicle Dealers Association (RVDA). 

What are a bankrupt RV manufacturer’s warranty obligations? The answer can depend on whether the RV manufacturer will reorganize or liquidate in bankruptcy. Fleetwood Enterprises Inc. and Monaco Coach Coach. announced intentions to remain in business and to reorganize under Chapter 11 of the U.S. Bankruptcy Code. 

A bankrupt manufacturer can either retain its warranty obligations or cancel them, and it has the power to choose. Bankruptcy experts point out that a manufacturer that intends to reorganize or be purchased, and to remain in business (like Fleetwood and Monaco), would likely retain some of its obligations to provide warranty and service support. 

If a manufacturer decides to liquidate and go out of business under the bankruptcy code, the bankruptcy court may set up a process to determine whether warranty obligations will or will not be paid. 

How can dealers handle sales of existing units, warranty obligations, financing, and some other issues when a manufacturer does go out of business? RVDA offers the following considerations: 

  • Discuss with your dealership’s attorney the possibility of titling the out of business manufacturer’s units in your dealership’s name, and selling them used with a limited express warranty, or “as is.” 
  •  Remember, there may still be component warranties for the chassis and appliances, etc. that are not affected by the RV manufacturer’s bankruptcy. 
  •  If you sell the vehicle as new, there needs to be full disclosure as to the manufacturer’s inability to pay for warranty work, and likely a prominent disclosure on the bill of sale. 
  • Do your contracts with consumers specifically disclaim express and implied warranties? Review your contracts with consumers who bought units built by the out of business manufacturer. Did you assume responsibility for the warranty work? Or does your paperwork indicate that the only warranty is the manufacturer’s warranty, and only the manufacturer is responsible for warranty work? 
  • In some states, it may be illegal to sell a new vehicle without a warranty, or to sell a vehicle as new if the manufacturer is no longer licensed to do business in the state. Check your state’s law. 
  • In the recent past, lenders have told dealers they will not accept financing requests for new or used units built by manufacturers who had gone out of business. 
  • If a bankruptcy reorganization turns into a liquidation, discuss with your dealership’s attorney whether your good faith effort to repair a customer’s warranty issue, without seeking reimbursement, is inconsistent with your disclaimer of implied warranties, and whether you may be obligated for additional repairs. Is there a contract disclosure/customer acknowledgement you can use to perform these good faith repairs? 

Several extended service agreement companies offer agreements for new units that carry no manufacturer warranty.

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