Travel Trailer Buying/Financing Questions
Hello all, this is my first post here. I’ve been lurking here a while looking for info on campers. I’m looking to buy a TT for the 2020 camping season and I’m trying to plan my finances accordingly....
Forum Discussion
Ride S40T wrote:
From our "newbie" buying experience...
Usually no down payment if your trailer is valued more than the asking price, percentage of that can vary.
There is NO such thing as a "trailer" (IE RV) being "valued" more than asking price.
RV manufacturer sets a "MSRP" which is the Manufacturers SUGGESTED RETAIL Price.
RV manufacturer sells the RV to the dealer at "WHOLESALE" price.
Dealer MUST "finance" the purchase from the manufacturer or bank or if they have enough inventory turns and cash on hand buy for cash.
Dealer must turn and burn that RV to get THEIR money out of it AND make some profit after paying interest, operational bills and sales team bonus.
Unlike auto sales, RV manufacturers DO NOT "PUBLISH" that wholesale price and dealers do not release the wholesale price.
So, the purchase price will ALWAYS be MORE than the wholesale price but often less than the MSRP.
So in other words with buying ANY RV, you WILL ALWAYS UNDERWATER with a RV that has LESS "value" the second you sign the title papers.
RVing is a HOBBY and with any hobby you LOSE MONEY, that is just the way it works.
You simply have to decide just how much money you are willing to lose in order to gain some "enjoyment" from that hobby.
A down payment may not be required by the dealer or bank, but it IS ALWAYS A GOOD IDEA to pay a bit ahead via a down payment in order to MINIMIZE your loss. Especially true when ever making use of a loan.
As others have mentioned, you can always pay a little extra towards the PRINCIPLE on the loan, this pays down a lot of interest (which nearly 70% or your first few payments WILL BE INTEREST!!), and you will pay off the loan EARLY.
You can test that scenario out by searching the Internet for AMORTIZATION CALCULATORS.
