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How loan value is established
I’ve noticed that the two premier coaches Prevost and Newell are not included in NADA that most lenders use to establish loan value. Do you know what system they use for this purpose or are you expected to pay cash? 🙂 T
Thanks for your hellp,
Harry
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27 Replies
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Harry,
There are lenders that specialize in Prevost and high end coaches. But on coaches that are over 10 years of age it is a real challenge to find anyone willing to finance a purchase.
Dealers and converters have developed relationships with lenders so they have ways of establishing value that is accepted. What influences most lenders not familiar with the Prevost market is our conversions are viewed as motor homes, and the typical motorhome retains little value as it ages regardless of condition. We are viewed in the same way except the reality is our coaches hold their value far better.
If a lender is willing to finance a coach perhaps the best way to prove its value is to get expert appraisals.
Cash purchases obviously avoid all the grovelling that appears necessary when asking for financing.
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Our credit union just needed an independent appraisal, but then they would only loan 50% of appraisal value, but interest rate was great.
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Bad thing about NADA, is I am trying to get our coach value amended, since ours is the only conversion listed in NADA, and grossly undervalued. Turns out from my correspondence with NADA, Beaver sent NADA a value back in 1990 and 1991. The Nada contact wrote me this morning, saying they are going to need sales info on Beaver Coaches to make any adjustment, and it will take time. Bummer.
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Hello Harry,
I am curious who told you banks us Nada to determine loan value?Nada in my opinion is not worth the paper it’s written on. If you purchase a coach based on Nada value you will be upside down. If you are using Nada to inflate value of your coach you can do that.
Banks determine value with there own set of rules. Someone in this crowd may read this and give us the correct name of the book. My example is this.
All of your large coach dealers will have this book. I drove by Mcmahons, a large dealer and stopped in and asked for the sales manager.
I was selling a coach that booked out in Nada for 265k. I asked him what would a bank loan against this coach, he said no worries I just got my new book and I’ll look it up. I was trying to determine what my coach was worth in real money to someone, I had alot of offers but nobody would write me the check, so I was searching dealers and brokers.
The bank would loan 180k on my coach, so in real money that is what my coach was worth to a dealer. Wholesale my coach was worth 150k and no broker would give me more than that, most would offer 20% below wholesale. Are you getting the picture, we have alot of car dealers and truck dealers on here that own buses. Maybe one of them will chime in.Later
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Bernie, the financial institutions we deal with here at home when it comes to value for a loan, as well as local car dealers, and one of our insurance companies we use all have one common denominator-NADA
My gripe with NADA is the Beaver Bus conversion is the only bus conversion they list. Average retail for our coach they say is $34,100. That is only $10,000 more than the same year Grand Marquis, which is a fine fiberglass Class A, but no Prevost. Their list of possible options don’t include featured components a bus conversion has, ei, residential frig, Webasto, cruise airs, or airbag leveling.
This seems to be an uphill challenge I’ll spend tine on, but I’m not in the position NADA is in, to glean market values.
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I think part of the problem is that buyers and sellers don’t disclose sale prices. If there was more disclosure of the actual sale prices (and condition, time to replacement of the limited life things, etc.), the resources would be more accurate and hence more respected.
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That’s my point Jim, Nada is out of touch. Beaver has been thru 3 or 4 ownership changes and are no more, I don’t see how they could keep up with it. and give you a value.
And if dealerships and banks are using the Nada book no wonder most everyone that buys a plastic coach is upside down when they sell it.
An appraisal won’t work for your needs?
Later
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We used our local bank and had financing setup and approved before we started shopping. No nation wide lending institution I contacted would loan on a Prevost more than 10 years old and some wouldn’t loan on any Prevost.
When I started the process with my bank they didn’t even know what a Prevost was. I used this website and others to educate them.
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It is unfortunate buyers and sellers will not reveal what they paid because every one of us would benefit highly from having some guidelines for the various reasons we need to know values.
Buyers obviously need this information not only to secure financing, but to understand what they are being asked to pay is reasonable. Owners need to know this information because if they choose to have an agreed value insurance policy they need a value the insurance company will accept. Sellers need this information to know they are asking a resaonable price.
But human nature being what it is no buyer wants to be seen as paying too much, and in fact most buyers are not happy unless others view their purchase as a steal. Conversely all sellers want their selling price to be viewed as high for the particular vintage or converter. So we end up with polarizing needs just to satisfy the ego.
There is not a dealer in the world that will share price information. They not only don’t want buyers armed with that information because it will make negotiations very difficult, they don’t want their competitors knowing the selling or buying prices.
What is needed is someone to do the research, starting with all the listings of coaches for sale. That will establish asking prices. Then there needs to be a blind survey of all known buyers and sellers to determine as much as possible actual selling prices. Good luck with that. Finally dealers have to be surveyed to determine how much a coach is worth if they buy it outright, and how much a lender will finance. Sounds easy but with the great number of different conversions, coach models, coach features, and coach condition it becomes a moving target, especially as the market changes from a buyer’s market to a seller’s market.
If there was a market for such research the person or company that compiles the data might be able to charge for the information. Especially if the data was updated regularly and was deemed accurate. I would certainly think spending $200 for the report if I was a buyer would be a very wise starting point. I would (as a dealer) feel much more comfortable using that data when buying inventory, and as a seller I would like to know what the bottom line was going to be. But the work involved would be extensive and the ongoing task of keeping the information up to date would be very much.
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Wonder why owner don’t post what they paid for there coach. Good or bad it would be helpful information. We are all proud of our Prevosts at whatever price you paid. I bought my one owner coach (1991 XL Mirage) back in early 2011 from the wife of a man my company did business for years with. It sit in a bus barn for about 7 years idle. Paid $57,000. Didn’t finance. I could see financing the newer ones because of the price. Of course that was a start down the road of putting money into it and figure it will be an ongoing process if you run down the road.
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One of the problems in trying to price these things accurately is the relatively small numbers involved. Just not enough for anyone to spend time or money surveying. Then throw in the fact that they’re all different and highly customized, and the numbers from each converter very small. It’s like trying to price high end boats or airplanes or even rare and exotic cars. Prices are driven pretty much by what someone is willing to pay for a given bus. One can educate ones self as to a price range for a given bus and its condition and what it might need and that cost and arrive at a fairly accurate number, but it does take some research, due diligence and common sense. Geo.
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I worked with Hal at Voyager last year to help with buying our 1998 Liberty. The vintage was near the far end they could loan on. But check with Hal for older coaches (probably going to be maxed at around 1999 at this point). Oh ye, he is also a supporting advertiser here at PC 😉
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And this makes me even happier that we are doing all of the updates on ours. Hopefully with new electronics and fabrics the desire to buy another bus will peter out quickly as there isn’t much more I could want.
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Glens,
II don’t know why purchase prices of busses is such a mystery.. I’ll help out here. Our coach cost us $139,000 , Sept 2009. That may have been a bit rich, but we wanted it. Our expert inspector gave us the tools to make the decision, and we haven’t looked back. We have owned three 45 footers, and we wanted a 40, and it didn’t matter going from Series 60 engine to an 8V-92. So after a year of searching, the Beaver XL 40 was it
We kicked a lot of tires.
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I second what Geo says.
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