need to understand how finance calculation work

Jetta03 wrote:

smkettner wrote:
That puts you $6,388 upside down.

$6388 upside down and looking to roll this into financing another 70k+ on another new unit? Your question is moot, you've already been taken advantage of.

With no other facts, why are you certain they are being ripped off? If their rig is really worth $6388 less than they owe, that is a fact that will not be changed by trading it in or keeping it. We have no idea if $70,000 for the rig they are looking at is a good deal or a bad deal. If it is a great deal (buying at say true wholesale value), then they are going to be $6388.00 upside down on the new rig after they finance in the negative equity. Most likely the deal is an average deal (paying somewhere around a fair retail price, which is what most people pay), so they might be another $4,000 or $5,000 upside down (in relation to wholes value) which isn't great, but isn't the end of the world. Personally, I would rather be $11,000 in the hole on something I want, that I like and that fits my needs rather then being $6388 upside down on something that isn't working for me.

First thought is to find out what you current trailer is really worth in a private sale. Not NADA retail, but what you could sell it for yourself. There is a big gap between what you owe and what the dealer will give you. A trade in makes it convienient for the buyer, but you pay a steep price for that convienience.

If you could sell it yourself for close to what you owe, then go negotiate on the new unit, you are in a better position. From my experience, you get the best bottom line price in a clean deal - they play a lot of games with trade-ins.

smkettner wrote:
That puts you $6,388 upside down.

$6388 upside down and looking to roll this into financing another 70k+ on another new unit? Your question is moot, you've already been taken advantage of.

How good is your credit / how much money are you putting down?

In my opinion there is no "good deal" here because you need them to roll the payoff of your current trailer into the purchase of the new fifth wheel - you don't have a lot of room to negotiate.

It looks like you are going to be immediately underwater on the new fifth wheel and the finance companies won't like the amount of risk so your cost of funds is going to be high. What interest rate did they tell you?

The answer you don't want to hear is
1. Sell the trailer yourself for as close to what you owe as possible and pay off the loan.
2. Buy a couple year old 5er that has already taken the big depreciation hit.

You also don't mention what your TV looks like. $80k for a 5er means it's a big un. You already have a 1 ton dually pickup to haul it with?

Compare how many RV's you have bought/sold in your lifetime vs the dealer. What chance do you have to beat them (or even tie them) at THEIR game?

In addition to the above, some other thoughts:

First, realize going in that RV sales people are like lawyers, all they want to do is separate you from as much of your money as they can - period. Don't be fooled by the friendly smiles, idle chit chat or free beverages.

On average, 30% off list price is a good target to try and work towards. Try starting the negotiating price with that figure in mind and don't waiver. Even when you get to a comfortable number, try and see if they can throw in an extra or two at no extra cost, a factory option, something the dealer can install and/or some free camping nights somewhere. (DW loves to do this sort of thing.)

Before talking to dealers, if you haven't already, do your due diligence and go on the internet and learn everything you can about specific models you are interested in. Not only prices, but quality, known issues (from forums), features, weights & capacities, etc.
Don't let a salesperson upsell you to a fancier and more expensive unit and don't let them tell you that there is better quality and features in another brand and model. Even if the price isn't much higher, their profit margin could be higher.

Take your time. Don't plan on coming to an agreed upon price at the first visit. Hum and hah and tell them you will think about it and then go home. Resist the temptation to put your money down right away because you are so excited and want it really bad. Do more homework on the pricing on the internet and arm yourself with info. and figures. Go back maybe say, a week later and play the price with them some more and keep asking them if the price is the best that they can do. Again, tell them you will think about it some more and go home. Then go back and have a last go and dropping the price some more. Make them an offer on the low side, tell them that's what you think the price should be and be prepared to walk out. Try bluffing if needed and say you're still not happy with the price.

If you would be buying a unit on the dealer's lot, see exactly what option upgrades it may have. You don't want to be sucked into paying for something that you don't really need or want. If you've done your homework, you should have a sense of what various options are worth. If ordering a unit from the factory with options, negotiate the price of each option individually. Don't let them bundle them into one price. If you buy off the lot and it doesn't have something you want, consider buying items from the internet and either installing yourself or at another shop.

Don't buy an extended warranty. Not really worth it. There's a few brands with a 2 year full factory warranty like Jayco and KZ. I think Heartland does too IIRC.

Lots of good advice on the 'net if you google "how to negotiate RV purchase" like these for example:
purchase advice
more purchase advice Like the guy in the vid, you want to be in the driver's seat by making the offer on the low side and working up from that.

Also, research the dealer. Some dealers have terrible warranty/repair service and it can takes weeks and weeks to get things fixed by the time they inspect what needs to be done, get factory authorization, order parts and then schedule the work into their busy schedule. Not good during the camping season. BTDT. Some dealers are top notch and get you in and out in the same day or 2 days, like our current one. A crappy dealer can make your RV purchase a nightmare afterwards.

You won't get the best of deals trading in something you have now. They'll just look up the blue book value. Better to sell yourself but the downside is that it can a long time and there's the hassle factor. Negotiate the purchase of the new TT separately from the used one, but have a separate price for the used one in hand. If you haven't yet, get your TT on the market pdq.

Otherwise, around now is not the best time of year to get a better price IMO. People are starting to think about camping with the better weather on it's way and demand is increasing. Earlier this year or the end of camping season would be better. A 2013 model may have a better price but if you buy one, it's already a year older in terms of depreciation and blue book value. Something to consider if you ever decide to sell it in next few years for any reason. (BTDT)

That puts you $6,388 upside down. If the value of the coach and the new lender will allow you to roll that 6k into the purchase you will then owe $73,900 + 6,388 + title + sales tax (6%? $4,434) - down payment (10%? $7,390) on the new coach. Debt could be $77,832 on a $73,900 coach. That is roughly how it works unless they add a warranty, undercoating, alarm system, glass etching, other BS at additional cost.

You can always put additional money down. If financing I tend to go with the max loan at best terms and then pay extra each month as long as times are good. And today times are good. If you have no way to pay extra then you should look deep into whether you should be making this trade.

Biggest issue is to be comfortable with the trade in value and the new coach price. And of course the payment should not be an overwhelming burden.

Good luck. Take a buddy with you if you think you may need to step away for a minute to discuss the deal before you sign. No cooling off period.

I owe 19761, and the sale price of the coach 73900. They are paying 13375 for the TT. what is the best way to handle this?

The $6400 that the dealer is not giving you for your TT that is less than you owe on it will end up being added to the new coach loan or you will need to pay the $6400 difference in cash. This is not a good way to purchase a new coach. You might try selling your TT yourself to get more for it. Your are not in an enviable position owing more on your TT than it is worth to the dealer.

You are looking at a fifth wheel with a MSRP of 73900? Or is the MSRP say 86,599 and the "Sale" price is discounted a certain amount to $73,900?

Lets say that the MSRP is $100,000 and the dealer is trying to get rid of their last 2013 model, they discounted it by about 26% to $73,900. Then you will have very little "Wiggle Room". However if you are looking at a $77,300 MSRP, and the dealer has discounted it by $4,000, or nearly 5%, you have a lot more wiggle room, and the dealer has enough profit built into the deal that they might be willing to pay off your current trailer - in other words giving you $19,761 as a trade in value. This is because a MSRP trailer selling for $86,300 only costs the dealership about $58,000 to replace it. Perhaps the dealer has to pay someone about $1,100 to ship in the replacement trailer. If the dealer is looking at replacing the fifth wheel with a 2015 model, and making a potential $10,000 profit, they can take the $6,000 loss on the trade in, because their net profit will be more than the amount of potential loss.

The other choice for you is to keep making payments on the current trailer until it is more paid down. Say the new payment on the fifth wheel will be something like $650 per month. If you start making $650 - 750 monthly payments on the trailer, you will soon have the balance below the trade in price, say by September.

Just a thought?

Fred.

I owe 19761, and the sale price of the coach 73900. They are paying 13375 for the TT. what is the best way to handle this?