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Foodsman's avatar
Foodsman
Explorer
Jun 26, 2014

Why is interest rate higher for Full-Timers

The other day I received an email from the “Good Sam Finance Center” that many of you may have received as well. Just out of curiosity I looked at the interest rates and there were four different categories, three of which were “New - Used - Full-Timer” and here’s what I found.

New $150,000 to 249,900 for 240 mo 4.35%
Used $150,000 to 249,900 for 240 mo 4.35%
Full-Timer $150,000 to 249,900 for 240 mo 4.81%

Does anyone know why the Full-Timer rate is .46% higher than the New & Used rate? I sent an email to Good Sam asking them that question but have not heard from them as yet.

This of course led me here to the central brain trust of the forum where knowledge abounds and is freely dispensed...

Thanks,

Harry

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  • tatest's avatar
    tatest
    Explorer II
    Jun 26, 2014
    I'm surprised that the difference in rate is so small, considering the importance of borrower stability in lending decisions. Suggests that the contracted lender has some understanding of ow RV full timers differ from other people who have no permanent location.

    Substitute "itinerant" or "drifter" for "full timer" and think again about the question. You'll find many other lenders making that connection, and will not make a loan at any rate.
  • Foodsman's avatar
    Foodsman
    Explorer
    Jun 26, 2014
    Hi guys,

    Two excellent and valid points...

    kcmoedoe said: "The collateral value will also be less. A fulltimer, by definition, is in the rig all the time. Wear and tear will be greater and mileage higher."

    I hadn't thought of that and you are certainly right...

    NYCgrrl said: "Roots in a community are a primary part of the credit history process which is why one of the first questions on most any application is where do you live? how long? and if less than 1-2 years where did you live before?"

    Another very good point and I thank you both for your great comments!

    Harry
  • NYCgrrl's avatar
    NYCgrrl
    Explorer
    Jun 26, 2014
    Foodsman wrote:
    Thank you one and all for your information.

    sdianel, thank you for that website it was one of the best I've seen for really good information.

    I understand the aspect of needing to chase someone across the country to repo a unit etc. But I'm a little hard pressed to believe that at loan given to someone with excellent credit is any more of a risk than anyone else.

    As my daughter likes to say "it is what it is" right?

    Thanks again,

    Harry

    Roots in a community are a primary part of the credit history process which is why one of the first questions on most any application is where do you live? how long? and if less than 1-2 years where did you live before?
    I'd check other insurance companies/brokers to see if they weigh aspects of the report's info differently.
  • kcmoedoe's avatar
    kcmoedoe
    Explorer
    Jun 26, 2014
    The collateral value will also be less. A fulltimer, by definition, is in the rig all the time. Wear and tear will be greater and mileage higher. And of course, as others pointed out, should a default occur, it is going to be harder to locate and repossess, both by the physical fact that there is no way to know where to begin to look and the fact that even when found, someone is living in it, so you just can't pull up the repo wrecker and drag it away.
  • Foodsman's avatar
    Foodsman
    Explorer
    Jun 26, 2014
    Thank you one and all for your information.

    sdianel, thank you for that website it was one of the best I've seen for really good information.

    I understand the aspect of needing to chase someone across the country to repo a unit etc. But I'm a little hard pressed to believe that at loan given to someone with excellent credit is any more of a risk than anyone else.

    As my daughter likes to say "it is what it is" right?

    Thanks again,

    Harry
  • spud1957's avatar
    spud1957
    Explorer
    Jun 26, 2014
    OpenRangePullen_Ford wrote:
    Because their is a higher chance of claims being taken out to repair an Rv if someone is living in it full time. Their for the insurance company try to make more money.


    Don't see the link between a finance company's loan rate and the insurance risk? I borrow from a finance company and I get my insurance from an insurance company. All due respect, I don't get your reasoning.:h

    I do understand full timers may be a higher flight risk so in the event of default, repo is much more difficult.
  • Old-Biscuit's avatar
    Old-Biscuit
    Explorer III
    Jun 26, 2014
    Because it is 'mobile' and could be across the USA when payments are defaulted on.
    Tougher to locate and more difficult to sneak up and repo it

    Higher risk....higher rates
  • OpenRangePullen's avatar
    OpenRangePullen
    Explorer
    Jun 26, 2014
    Because their is a higher chance of claims being taken out to repair an Rv if someone is living in it full time. Their for the insurance company try to make more money.

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