The second-hand market - what's going on?
Like anything, buying or selling a second-hand motorhome or caravan depends on supply and demand. Like the housing market, the motor home market has been one of the record books in the last few years. Heightened demand for domestic travel options coupled with shipping issues, global manufacturing delays, and labour shortages has caused a massive supply issue meaning the second-hand market for motorhome products has been interesting.
No one could have predicted that coming out of the 2020 lockdown would see demand for motorhomes quadruple. Naturally, this impacted the second-hand market, and for a time, we saw motorhomes and caravans fetching a decent sum of money on TradeMe. Honestly, it became super tricky to value a vehicle, and it was often quite unpredictable what people were prepared to pay and how "lucky" a seller would get with the price they received.
An important thing to remember is that despite the success of the second-hand market over the last few years, motorhomes and caravans are in large, depreciating assets. The trick is to buy on the right side of this depreciation scale. The total cost of ownership is a thing you'll hear the TrailLite Product Specialists talk about a lot, and there is a big difference between a product that performs well when it comes time to sell it and one that doesn't.
TrailLite Built, across the history of the product, have generally sold second-hand very lucratively. Being New Zealand-made and supported by a New Zealand company holding the warranty, the risk is less when purchasing second-hand. On average, the demand for a TrailLite exceeds the supply. That concept fluctuates, but at large, I have never seen a lead time on a new product less than 12 months. While this is frustrating for those who want to purchase new and hit the road straight away, one of the key reasons it's worth the wait is this concept of lower depreciation, meaning a far less total cost of ownership when it comes time to sell.
It may seem strange but think of this analogy - if you had a choice of two houses, one you knew would generate a positive return over its lifecycle and one that didn't - nine times out of ten, you'd be looking at the one with a better return.
Some things to consider when looking second-hand:
- How do I get parts, servicing, and warranty questions answered?
- Is there an New Zealand Service Centre?
- Has the current owner had any issues with the product and any challenges speaking to a New Zealand representative for the brand?
- What was the cost of the product brand new, and how much would it be to purchase brand new today?
- Is it a popular floor plan, and how many other similar products are on the market currently?
- When looking at a specific floor plan, don't just look at pricing. Consider the specification and the suitability to NZ conditions and make sure you've done your homework on what's going to work for you.
What is happening in the second-hand market right at the moment?
Product availability has increased, but not all products are created equal. So don't take that comment at face value and think it means more people are "getting out" and wanting quick sales. We started considering trading in our TrailLite motorhome for a caravan with a more suitable family floorplan (bunk beds). But honestly, despite lots on the market, we still needed something to suit our reason for a change, and those that did were still asking for more than they paid. One product we looked at that was perfect ended up selling for more than the owners paid for it and had plenty of interest and watchers.
Take TrailLite Built as an example - across my time at TrailLite Group (approx. seven years), I have seen a handful of Matakana floorplans second-hand and a handful of Coromandels, but these would be the two biggest second-hand product requests from potential buyers. I would have been asked about second-hand options on these two floorplans close to 20 times at the Christchurch motorhome caravan and leisure show over the weekend.
So what does that mean? Generally, that demand outweighs supply on particular models in the second-hand space. That is what happened with us and our family-friendly caravan floorplan as well.
The rising price tags of second-hand vehicles have, thankfully for those looking, probably peaked and are peeling back slightly. You might see vendors list at a certain price, but be willing to negotiate, and we'll never know what everything goes for at the handshake. A thing to consider is that supply has returned to the new market, and demand has shifted.
International travel is back on the agenda for the core demographic of domestic motorhomes. But new entrants are coming into the market, including younger families, and the recent Christchurch Motorhome Show illustrates that, with lots more kids floating around than we've seen in previous years. A recent stat from the Dusseldorf Show in Germany said the average age of visitors was 40-49. Could this trend be starting here?
There are currently just shy of 900 used motorhomes on the market across the country, ranging from $1000 to $580,000, which is a considerable range and requires a lot of expertise and knowledge to ensure you're spending your money wisely. This is a significant increase of a couple of hundred from the peak of the supply shortages 18 months or so back.
Regarding caravans, there are significantly more listings, at a total of 1474, ranging from $100 to $350,000. More is not always better. I noticed this when searching for myself. There is a lot of choice to scroll through, but not much of it is suitable. I would recommend speaking to an expert, even if it's to simply get some free advice.
It's important to understand the long-term ebb and flow of the market and to put energy into understanding how the brand you are considering purchasing performed two years ago, what the price was new, and what the annual depreciation is on the price they are asking now.
Another key influencer in the second-hand market, particularly the values, is the cost of new units, which has increased significantly in the last two years. They've increased more in the last two years than they did in the five years before that. Those price increases are across the global industry and not unique to one brand or country. The price you could buy something for five years ago is now significantly more, impacting the price people are fetching second-hand.
For example, someone brought a motorhome for $130,000 5 years ago. You'll see the difference in the way of changes, facelifts, and new specifications, but now that exact motorhome purchased new might be worth $230,000. So, what is that product worth now second-hand? And that's the challenge of evaluating the second-hand market. It all comes down to what someone is willing to pay for the product in front of them on the day. Or how much they want it!
The TrailLite Group product has generally performed well; and you'll see that reflected in the prices listed on Trade Me. It would be great to hear your thoughts and experiences on purchasing and researching second-hand motorhomes. Please email us or comment below.
Check out our range of pre-loved motorhomes and caravans here.