need to understand how finance calculation work
We want to buy a fifth wheel, and we need to trade a travel trailer that has no equity. Is there a step i can follow so i dont get taken advantage of or tricked into a bad deal?
Forum Discussion
smkettner wrote:
My original response also included some thoughts on affordability.
It is very easy to make a fair RV deal, make the minimum payments for 60 months and be a bit upside down. This does not mean anyone got ripped off.
I guess it how one looks at things in life..
The OP "feels" they are being "ripped off" and it is "unfair" that the DEALER is not willing to cover the "shortfall" or difference in the used trade in value vs the sales price of the new unit they want to buy.
They (the OP) are RIPPING THEMSELVES OFF by DESIRING a NEW RV, not the dealer.
The dealer did not force the OP to walk in and purchase a new unit.
The dealer HAS TO MAKE some money on the deal, otherwise they WILL go out of business. The dealer simply cannot AFFORD to trade even up or basically give away a BRAND NEW and more expensive RV for an older used less expensive RV which they would have to attempt to sell and make all of their profits..
Yes, the dealer will "offer" less for a used unit and rightly so, no one is going to pay a new price for any used unit.
If the OP feels the dealer is unfair they can back out of the deal anytime before signing the papers.
The OP can attempt to sell their trailer as a private party sale.
They most likely will get about the same price as the dealer is offering and may end up waiting months or even a year to sell it at that price and unless they pay down the loan quicker they WILL have to pay the shortfall on the loan balance.
As far as I am concerned the dealer has come with in $6K difference which if the OP owes more than the unit is worth is a real decent "deal" since the OP owes more on the loan than what the RV is worth, the dealer could have easily told the OP to take a hike.
The OP has several choices..
Walk away (keep or sell as private sale)..
Take the deal and roll the difference into the new loan..
Take the deal and pay cash or get a separate loan for the difference..
If the OP really has their heart set on the new unit they WILL have to take some lumps on the deal.. The dealer simply cannot afford to pay off an upside down loan.
