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DallasSteve's avatar
DallasSteve
Nomad
Jan 02, 2020

Cash Vs. Finance

I'm planning to buy a new RV in March. Yes, I know they depreciate like crazy, but I've window shopped the used market and I don't see any that's what I want at a reasonable price and I don't want to get into the used RV inspection dance, either. I have the cash, but my plan has been to finance initially and then pay off the loan in a month or two. Interest would not be tax deductible for me and I don't think I'll get a 29% return in the market again next year. So I don't want to keep the loan.

The reason I want to get a loan to start with, is because I like the idea that a bank or some other business has "skin in the game" with me. What I mean by that is "How do I know if I give the dealer my cash for the RV they will actually deliver the RV? I don't have much trust for any RV dealer and I don't know what paperwork to look for. A company in the business of putting their money out to finance these purchases almost certainly knows what to look for.

So what are your opinions/suggestions about a plan like this? I know I will loose a little money by doing a loan, but I consider that to be like title insurance if I was buying a home. It's something I'm willing to pay for. And as a related question, What are typical prepayment penalties or terms on RV loans?
Seeking Advice
  • rk911's avatar
    rk911
    Explorer
    Jan 02, 2020
    you select an RV from the dealer’s lot or place an order for the factory and put down a modest deposit ( not in cash!), making it refundable if, upon delivery, there is something major wrong. the deposit amount will be noted on the sales agreement. upon delivery you do an inspection and then pay the balance. not in cash, check, bank check, etc. get a receipt or make sure your payment is noted on the sales agreement. you pay, dealer hands you the keys. the bank will not get involved in this process.
  • T18skyguy's avatar
    T18skyguy
    Explorer
    Jan 02, 2020
    I would first talk to the bank. We have some bankers on this site might give you good advice. If the bank loans you the money, I would expect a hefty pre-payment penalty. They don't like to go to all that work for nothing. I would just go to a well established dealer, make a deal on the rig. Tell them that's the out the door price so they on't stack fee's on top.Buy it off the lot is what I mean. Then come back with a cashiers check and you'll have your RV. If it's a long standing reputable dealer, there shouldn't be a problem.
  • mich800's avatar
    mich800
    Explorer
    Jan 02, 2020
    The only one with skin in the game after the loan if funded is you. There are reasons to finance but I would not use the bank aiding you in the transaction as one of them.

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