Money Perception

Commitment vs Price

This little piece is something I wrote awhile back and was designed for sales people but it will definitly provide value to everyone in general. Read below and see if this might help aid you in feeling better when shopping your next large investment 

We know that when we get an objection based on price, often, it is not a true price objection. Usually it is because they do not have enough information, the perceived value doesn’t exceed cost, or some other underlining reason. I have learned that sometimes the price objection is simply just however. They do like the product, they do like the features, and they do believe they would enjoy the product now and years to come. With all reasons pointing to buy why would they insist on stopping the sell? Understand the money isn’t what people are afraid of, even if that’s what they believe. People are afraid of the commitment. 

Therefore, agreeing to marriage proposals, having children, investing hard earned money, and even a weekly grocery trip feels like a big decision. How about which route to take to a dinner out during rush hour? The wrong path taken could be the difference between a 20 minute and a 40-minute endeavor, and this trip becomes a bigger decision, right? 

Back when I was in the car business I formulated this concept, not only with customers, but with myself. Just like anyone else I am no exception to the rule and I learned that when the commitment isn’t the focal point of the deal the people tend to buy. So how do you remove the commitment then? The reality is you can’t, this is a guarantee that you will pay the lender the agreed upon amount for the duration of the loan. Even if you can’t remove the “commitment factor” you sure can make them feel better about it. The question is how?

I decided to start with the money. Now, I have never agreed to a large chunk of money before like customers do when they sign a car deal so to understand I had to break down a 60-month car note into much smaller pieces. First, I start with the amount per year, then per month, and finally per day and here’s what I discovered. 

Toyota Camry (after TTL) $25,240

60mo @ 4.5 Interest           $470.55

Per day    (31 day month)   $15.18

As you can see, the price per day becomes $15.18. Now, that doesn’t seem like much and I tend to spend more than this on things I don’t need daily. To take it one step further I wrote out a few things I buy just to get my day started. 

Pack of cigarettes                      $6.57

Energy Drink                            $2.89

Muscle Milk                              $4.32

Per day                                      $13.78

Per year                                     $5,015.92

Per 60mo                                   $25,079

Already I am spending close to what that Toyota Camry would cost me had I bought it. Looking back at what I spent comes across as a “big deal” but it hasn’t prevented me from buying. So why am I okay with this and not a car deal? The difference is a sales person didn’t sit me down, show me a $25,079, and guarantee me a pack of cigarettes with an energy drink and Muscle Milk every day for the next 5 years. And if he had I would have done what most customers would do. Object to the price and want to shop around. 

The “per day” close is nothing new in the world of sales but it seems that it has either been forgotten or is not executed correctly and because of this I wrote this little piece. It’s one thing to play with the monthly notes as if you’re some money magician but when you offer your customer another perspective using their spending habits it lessens the focal on the commitment of the deal and places their attention on a truth.  The truth that we all spend money on things we don’t need and when it is in small amounts the large expense tends to stay out of sight. The truth your habits are your commitment even if you didn’t sign a deal to have it. The truth that this big purchase really isn’t a big deal.

I am a consultant in the RV buisness and very passionate in helping others and if I can help you, please feel free to reach out to me via email or leave a comment. Good luck and hope you enjoyed the read. 

The Big 3: Real Things To Consider When Buying An RV

The Big 3: Real Things To Consider When Buying An RV

If you've begun your journey into the RV lifestyle let me be the first to say congratulations! There is no substitute for the freedom and unlimited possibilities an RV offers. Not to mention how far the features and amities have advanced from the dawn of RVing almost a century ago. These are definitely not Grandpa's camper anymore! But as you start shopping you'll find there is many brands, styles, and models. With so many options, deciding where to start or even when to stop, it can become overwhelming. The truth is there is no such thing as a "bad" RV, however picking out one that doesn't suit your needs can be a bad decision. This article will discuss quickly the big three areas to cover when you shop around. 

Type

  

From massive fifth wheels that can store your favorite toys like motorcycles or four wheelers to compact trailers that pop up and expand, you need to decide how you'll use your new camper. A few questions to answer would be:

• Will we use it a few times or most weekends throughout the year?
• Will these trips be short term or extended stays?
• Are the terrains more flat at the coast or rocky in the mountains?
• Do we need something more designed for hot, cold, or both?
• What can we tow now or will we buy another tow vehicle?

Of course there are many more questions to answer but you get the idea. It is best to understand fully what your needs will be because your requirements will begin your shopping in the right direction

Function

Once you have a better idea on the type you want you'll need to uncover what kind of function you will need. Some questions you might ask are:

• How many people will travel with us on average?
• Would we need many sleeping places like in a bunkhouse model?
• What kind of layout would be best for us? 
• How about counter space, storage compartments, bathroom and shower sizes?
• What about amenities like an outdoor kitchen, bike rack, or a second half bath?

Too many times have I've seen a salesman put customers into a unit without either party understanding what the needs are and end up with an RV that doesn't work. And sometimes it is because the buyer gets distracted by price and settles. There is no such thing as a good deal on the wrong unit so make sure your new RV matches what you need first, then shop the price.

Construction 

Now that you determined the type you want and the functions you'll need it is time to narrow down on a good unit built for the long haul. I'm talking about how it is constructed. 

At first glance most RV's look identical with similar floor plans, exterior styles, and common features. But when you get down to the nuts and bolts it is a whole other ballpark and depending on how you plan to use it and for how long will determine which brand will be the right fit for you. Typically your "entry level" type models are built fairly cheap which might steer you away but if you just need something for a few trips here and there then it is your best bet price wise. But if you want something that can withstand colder weather or hotter summers maybe you need an RV with better insulation and designed with 3 seasons in mind. Some owners might live in their unit full time and need a more residential feel. You get what you pay for in the RV business so keep a reasonable budget that mirrors your needs then look around for the best deal. Just don't buy on price alone because I've learned "all that glitter ain't gold". 

The reason I wrote this is to help educate those looking to get into the RV lifestyle and I wish your first purchase to be the best decision you make. I am a consultant in the RV buisness and very passionate in helping others and if I can help you, please feel free to reach out to me via email or leave a comment. Good luck and happy camping!

The 3 Myths on Buying Used

The 3 Myths on Buying Used

Something that always comes up in the world of sales is whether or not you should purchase used with big ticket items. There are many reasons both good and bad when buying used but I want to cover a few myths that seemed to be common in customers minds and hopefully clear some confusion. This quick article will be focused on the RV purchased, however the information is true when shopping most products today. 

I don't want someone else's headaches

This is one of the first things I hear when people mention a used RV. The truth is, as nice as a new one can be, it doesn't guarantee it will be free of headaches. In fact it is almost certain any new RV you buy can and will have issues the first trip out. The reason being is RV's are mass produced and the manufacturing plants are pushing out 30 to 35 units a day and sometimes more depending on the brand and models themselves. As much as they would like to catch every issue or imperfection going out they simply can't. The second reason is these products are made with two worlds opposite of each other combined, the residential amenities and lifestyles paired with mobility and freedom of travel. Simply put: 

A house on wheels = things will break

This is why it is better going used in most cases. The original owner has gone through the good, bad, and  inconvenience of the problems bound to happen with "never before used" product. When they trade or sell their RV, the unit is finally broken in and will be a more enjoyable experience for the new buyers. Not to mention better on the new owners pocket book

It's a better deal because its cheaper

This statement is a bit tricky to tackle from one side. If people mean its cheaper because its not close to retail when sold new then yes, absolutely. If they say its cheaper because the sale price is lower therefore the monthly payment will be too, then hold on a second. Just because its lower priced doesn't mean it will be a lower payment. Banks are very cautious as providers of money when it comes to any loan you apply for. They want to see your score, credit's revolving history, and the biggest loans you've responsibly handled. When you throw in a product that is not "new" and usually bares no warranty then it changes the dynamics of the loan. Now throw in a product that is considered a luxury purchased such as an RV, the loan structure can be completely different than what you would expect. Luxury loans can range from 5 years up to 20 years depending on the loan amount and item and with a used product their concern is the value has already dropped, the item is likely to fail sooner, and they chance losing money on the buyer if he defaults and they don't have a valuable product to sell to recoup any lost money from the deal. What this means is they don't want to fund the deal.

This results in loans with a shorter note, higher interest rate, and more of a down payment. Depending on the unit it usually makes more sense going new in this aspect. 

The deprecation hit

Its no secret that new cars, boats, RV's, and other products take a sizable loss in value the moment they leave the dealership. This hit is what we call deprecation and the product will continue to deprecate value during its lifetime until it no longer exist. When shoppers think in terms of financial investment, it makes since to purchase an item that has already taken this hit from the previous owners. An idea that is very true. 

What isn't considered is the deprecation rate the used item will continue to take and what kind of demand will the market have when you go to sell. Ill give you an example:

Mercedes vs KIA 

One of these will hold their value stronger and longer. The other will deprecate faster. This is true with any product on any market so when you shop used,  you need to consider these factors before committing to  the deal. 

Conclusion

There is much more you can say on these three myths alone but I just wanted to give a quick idea to get the gears turning. I am a salesman in the RV world and these few things come up quite often, and as an adviser, it is my job helping people consider all angles when making a long term investment. 

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