Picture this, you’ve a camper you still owe on loan and have a lien debt. Your family is getting bigger, and the camper no longer makes sense. So, you need to sell it for a replacement but don’t have the money to pay off the loan.
Now, I’m probably guessing you’re here because you’re in a familiar situation.
Don’t worry; I’ve been there too, and in this guide, I’ll share the exact steps I used to sell my 2019 Grandby with a lien.
Now, understand that selling a camper is tricky, and selling one with a lien only adds complexity.
But our detailed step-by-step guide below will make the process less taxing.
- Determine a Camper’s Fair Market Value
- Determine the difference in financials
- Choose how to sell your camper
- Closing the dealing; Use escrow service
Of course, unlike the traditional sale, expect a bit of paperwork with a lien sale, but not a big deal.
If you’re also selling it to someone who is also financing it, there will be more paperwork to top it up.
But the good news is most financiers are familiar with anything required for any situation, so you’ll not be in the dark.
And as I mentioned, I’ve been in a similar situation. Yes, it’s not fun, but the pain is just temporary.
With that said, let’s go into details on how to sell a camper with a lien.
What’s a Lien and How Does it Work?
First things first, let’s look at what an RV lien is and how it works.
Assuming you finance an asset or property through a loan, the lender or lending institutions offering the loan place a lien against the property.
A typical lien includes the creditor’s name on your RV and certificate of title.
Simply put, the financed property won’t be under your name, so you can’t legally sell it before you clear the debt.
The lien gives your creditor/financier/financial institution the legal right to your property.
Usually, the primary aim of a lien is to give the loanee an obligation to pay off the loan.
As with any other debt, if the repayment process is faulted, the financial institution has the legal right to seize the property under a lien.
But once the loan is cleared, the creditor’s name is removed from the title and replaced by the real owner’s name. The real owner can now sell the RV without complications.
Can I legally sell a camper with a lien?
Yes, you can sell a camper with a lien.
The basic requirement for selling a truck with a lien is you should account for the outstanding debt from your financiers.
And the good thing is some arrangements will allow you to dispose of your travel trailer with a lien without getting into trouble.
Step-by-Step Guide on Selling a Camper with a Lien
If you follow the due procedures, selling a camper with a lien isn’t challenging.
The key thing with the RV sale is that it should clear all the outstanding balance from your lien holder or rather meet the previously stipulated selling conditions.
Here’re the steps to follow when selling an RV with a lien.
1) Determine a Camper’s Fair Market Value
Knowing your RV’s FMV is probably the most important step of selling your camper with a lien, at least in my opinion.
It’s a critical step, ensuring you’ve enough capital to offset the original loan while at the same time ensuring the potential buyer has a good purchase deal.
Unfortunately, it’s easier said than done because, in most cases, campers don’t have a proper grasp of their product’s fair price value/true value.
For example, if you undervalue your RV below the value and sell at an extremely low price, you may benefit from a quicker sale. But on the downside, you get less money and do not have enough to recoup to clear the lien.
And depending on the local laws or the stipulated agreements, failure to clear the original loan may void the sale and transferability altogether.
On the other hand, if your selling price is more than the fair market value, you may make some profit, but it’ll take longer to sell.
In some cases, the high market value may even turn off some potential buyers and could send them to a competitor or a dealership with a better deal.
Fair Market Value Vs. Original Base Price
The fair market value refers to the price of an asset in an open and competitive market where both the seller and buyer have reasonable knowledge of the property and are willing to agree without pressure.
Neither party involved is under the obligation to commit to the purchase and have a right to back off without repercussions.
On the other hand, the base price is the original amount or original value borrowed from the debtor.
Usually, this amount will include the value for the RV, registration fees, taxes, insurance fees, and other extra fees. But the original value is minus the down payment.
Simply put, it’s the initial principal before interest.
To determine the amount of lien or what you owe a lending institution, check on your payment statements for the remaining balance.
The remaining balance is what must be cleared before obtaining a clear title and disposing of the RV without any attachments.
Easy Way to Determine a Campers Value
Evaluating the real value for your camper isn’t as easy as it sounds.
Beyond the base price registration, insurance, taxes, and everything, you also need to account for other recurring expenditures such as maintenance, upgrades, and repairs.
But the good thing is there’re a couple of guides with published camper prices.
The NADA pricing guide is the quickest way to estimate your RV’s worth.
However, this price guide is only a rough estimate and not conclusive. A couple of other factors and qualities may result in a varying in the final price, including mileage, mechanical condition, location, age, and so much more.
For example, it’s easy to find two similar recreational vehicles with the same mileage, one in pristine condition and the other one battered, but all asking for the same price.
So, you must assess your RV based on value and not just on the cost.
If you can’t access the NADA guide, start by looking at some RV marketplaces, such as RVUSA. It’s a hub where RVs for sale and spec guides are listed.
Enter your specific RV make and model on their search engine, and find some comparable options.
It’ll give you an idea of what’s really a fair asking price for your trailer while giving you a better idea of what potential buyers see during the purchase process.
2) Determine the difference in financials
After determining how much your camper can fetch, compare it with the sale money.
It’s still a crucial step that gives you an idea of the amount you’ll possibly make or lose.
If the difference is negative and less than what the lending institutions demand, you’ll likely lose your money. Depending on the selling terms and conditions, it can complicate the selling procedure.
3) Choosing how to sell a camper
There are many different ways to sell an RV with a lien, but the two common options are selling to a private market or using a dealership.
Each method has its pros and cons.
Selling a camper privately is more lucrative, as you’re likely to make more money/profit. However, it’s less convenient and takes time.
On the other hand, selling an RV through a dealership is more convenient and less frustrating. Unfortunately, it may leave you with less profit, meaning you’ll have to clear the outstanding balance out of pocket.
Selling Motorhome to Private Parties
A private sale makes sense when you’re not in a hurry and don’t mind the complicated processes.
The most common way to sell your motorhome to a private party is to list in a marketplace or place an ad on social media.
While advertising your camper, it’s important to mention a lien on it to avoid taking customers by surprise.
Creating a catchy ad is also as important as mentioning the lien.
Remember, there’re hundreds of similar listings in the marketplace, so you need to stand out from the competition.
Finally, even if you don’t want a dealership to handle your sale, it still makes sense to get a quote from them.
Again, this helps you get a fair market value for your RV, and don’t mistakenly overprice or underprice your RV.
Standing out from competitors.
I thought it would be good to mention how you can easily stand out from the competition and create a compelling ad.
Remember, over 355,000 RVs and camper trailers are sold every year, so you definitely want your camper to stand out.
Sponsored ads are a great way to increase the visibility of your RV, but its condition will ultimately determine whether it gets a fair price offer in the shortest period.
See, a camper in the unrivaled condition is likely to fetch better prices from private buyers than you would have at the dealership.
But if it’s dirty and battered, you’ll have difficulty disposing of it, even for low prices.
Selling Camper to a Dealership
Using a dealership makes more sense when you want to dispose of your camper quickly and conveniently.
The good thing with selling a camper through a dealership is that it eliminates most of the complications of selling privately.
On the downside, you make less profit through this method.
Usually, most dealerships will employ professionals with a better understanding and fine details of how to sell a camper with a line.
They’ll handle all the legal issues and paperwork from selling the RV.
On top of that, the dealership may also have direct contact with the lending entity to make arrangements on the most convenient way to sell the RV.
The typical selling process starts with a thorough assessment of your RV and determining a fair trade-in value.
It’s important to ensure that you never accept any offer below the estimated trade-in value of your camper to avoid out-of-pocket payment for the outstanding lien.
The second important thing is you should never hand over your RV keys before the dealer gives a written certificate of the cleared loan balance.
Selling a Camper on Consignment
Putting your camper on dealership consignment is suitable for those who need a hands-free approach. It’s ideal for occupied campers who don’t want to deal with the hassles of selling their used RV.
It’s a great solution, especially when you’re short on time and owe a small lien amount.
Unfortunately, the consignment takes more money from you.
4) Closing the deal; Use an Escrow Account.
The escrow method is a reliable and convenient way of adding a layer of security to your payment.
It allows the purchaser to deposit cash in an escrow account released only when the title transfer is complete and the lien card released.
The service incurs additional transfer fees, but it’s mostly split between the two parties. Either way, it’s a great solution, especially when there are trust issues.
It also shields both parties from getting duped or conned.
The final step of selling a camper you owe money is arranging for a meeting to sign over the title to the new owner.
It also involves getting the lienholder’s debt paid off.
Usually, clearing debt can be satisfied by the seller paying it off or transferring it to the new buyer.
But assuming you undervalued your RV, and don’t have sufficient funds to clear the debt even after the sale, a bank or lending institution can offer a bridge loan.
A bridge loan is simply a new loan for clearing the outstanding balance even after the sale of your RV.
If you don’t qualify for the loan, you need to raise the outstanding balance out of pocket before the title is transferred to the seller.
The upside of using a dealership is you don’t have to go through the hassle of setting up the meeting. Instead, the dealership will assume your debt but issue you with a letter, which you can then present to the lien holder.
Some Other Ways of Selling a Camper
There’re a couple of other ways you can sell your camper.
Some of the popular options include:
Trade-down is simply when you want to replace your camper and are not ready to give up on your camper life.
You simply need to switch your camper for something bigger or more reliable.
Completing a trade-in involves tacking the remaining balance onto the new camper loan.
But this isn’t always an option because creditors won’t typically loan an amount more than the RVs value.
Rent it Out
Renting an RV is yet another incredible way to make a fair profit when you’re not using it and planning to sell it.
The money collected from the renting can later be used to pay the lien. So, it can turn a poor financial situation into a profitable one.
How to Sell a Camper with Lien Frequently Asked Questions (FAQs)
Q: What’s a Lien Release Card
A: It’s simply a card issued by the lender indicating you’ve met your financial obligations. You’ve cleared the existing lien and balance owed on your used RV purchase.
Q: What paperwork do I need to sell my camper?
A: Some of the paperwork you need to sell your camper include proof of ownership, photo I.D., the consignment agreement, and lien debt information.
You also need a couple of legal documents, such as the power of attorney form and Bill of sale RV.
Q: Can I transfer my used RV loan?
A: It depends. Some RV loans are transferable, but most aren’t. It is way simpler to sell your camper and just get enough money to offset the balance for an easier transfer process.
Selling a camper with you still owe money makes a great financial decision, especially if you want to upgrade or replace your existing RV.
It’s a major investment decision that can’t be made randomly and requires a financial commitment.
The good news is our tips on how to sell a camper with a lien should guide RV owners from start to finish.