Any Advice on Financing an RV Purchase?

[liquidspaceman]

Hello All,

Sorry for this long email, I am a little depressed as I got denied for a loan recently and trying to get approved. Please give me feedback if you have any?

I recently attempted to purchase a 2006 Majestic 23A from Cruise America with super high mileage for 18,995. At the time I only had $3000 to put down with a 713 FICO. They sent to two banks - Medallion and US Bank. I was not approved for either (or at least I don't think I was, the dealer was kind of a putz).

Several months later I now have a 720 FICO and $11,000 dollars. I was thinking about buying an RV cash but saw a few models at a local dealer like a 2001 Dutchmen for $18,000 that seemed pretty nice.

My question is, can you think of any finance company that would approve me with $11,000 down? I'm really worried about applying again and getting another hard pull or two if my chances of being denied are slim.

I think part of the reason I'm denied is that I'm not a homeowner (live with my elderly mother and care for her so I pay no rent). I don't have a need for a house as when my mother dies, I am her only heir. So I pay zero rent (basically we are my moms caregivers as she is handicapped).

Here are my stats: 38 years old, been at my current job 15 years. I make 55 grand a year, wife makes 45 grand a year. Both cars are paid for. I don't have an auto loan on my credit because my wife bought the truck and I paid it off in 2 years. 713 fico with no baddies at all on my credit report. I have a bunch of high limit cards (5000 plus) on my report with zero balances because I always pay them in full. I have NO auto loan on my report.

Basically, I feel like due to my situation (non home owner, no car loan on report), I will not be approved. Or am I wrong about that? Should I save some more money and go for a newer RV? Is it easier to get approved with 15k down on a 30k RV that's newer as opposed to a 2001 model?

I recently was given a cheapie 1980 RV that has LOTS of problems with it and frankly I want something newer. What would you try if you were me? Do you think with the bigger down I might be approved?

Thanks

[wintersun]

In your case you have no credit history which is nearly the same as a bad credit history. My brother worked for years as a carpenter and was paid in cash and paid all his bills in cash and found himself in his 40's with no credit.

I can see where finance companies would not want to lend on a used RV. With a new one and 20% down they might be able to reposses the vehicle and get their money back but super risky with an old RV, much less a high mileage RV.

Financing an RV is a great way to pay nearly double with the finance charges and depreciation while you own the vehicle. If you are short of money, financing an RV is not the way to go.

The country is also in the middle of a credit crunch as the super banks have free income thanks to the Federal Reserve and they are sitting on the money they have. I know of three manufacturers who have been in business for decades but who cannot get bank loans for new equipment to expand their businesses. We are truly operating like a banana republic in every regard.

[2500_Grunt]

Go to myfico.com and request a credit report for free. Not a credit score just the report. You get 1 free report a year or if you have been denied a load then it's free too.

[NWKomfort350]

People's bank will finance 180 months newer than 10 years old so 2003 or newer. If your score is over 700 will finance 100% if I remember exactly.

[Bit_Bucket]

liquidspaceman wrote:
In regards to my income vs. something not being right. My mother has a lot of serious medical expenses for her long term care. I also have two young children.

So what is being stacked against me:

1. Disabled mother medical care. As an example, I recently finished paying off a $40,000 bill due to things not covered.
2. Pre-teen kids
3. Living in California in general is damn expensive
4. Just recently paid off both of our cars and saved 11,000 so I am now going positive with my cash flow.
5. Always paid cash throughout my life. In the past 18 months, I have been establishing credit. So I guess you could say I have "new" credit. Which I'm told some financial institutions like to see 10 year credit histories. My average age of accts is 2.2 years.

That's ok, you do not need to explain it to anybody, it's none of there dang business!!!!!!!!!!!!!!

[Tom_Diane]

Did you ask why you were denied? You have a right to find out why and the reporting agencies should send you a report stating why. When you credit checked you can receive a free report,

[flyinguy68]

Tvov wrote:
If you really want to get loan, have you tried buying from a dealer? See what they have for used (or new) units. Dealers usually have their own arrangements for loan companies, they WANT you to buy one of their RVs! Just be careful, and pay attention to the small print!

The OP said it was through a dealer, which is why I am so baffled. OP has a great Credit score and if anyone should be able to get you financing it should be the dealer. They may not get you the best interest rates but they lose if you don't get the financing.

In my experience Credit unions are not the best source for RV financing. Credit Unions like to keep things simple and avoid risk. I have a great Credit Union, but they have little interest in RV's, boats etc. I know their RV rate is 9.9% If you found different - fantastic.

[Andymon]

We thought about financing but decided not to so we just kept saving until we had enough cash to buy outright. I'd keep saving for a little while longer. Nice to not have any debt. JMHO

[Searching_Ut]

When you were denied the loans, you should have been provided with information on your credit score, any other factors they used to evaluate the loan, and the reasons for denying the loan. What were the reasons given? As others have mentioned, a credit union is a great place to start if you really want to finance. Not only will they help you look into pre-qualifying and other loan related options, they often offer general financial management and advice services either free, or for a low fee. For your situation, something doesn't add up here but I'd need a lot more information to do more than wild speculation. Being a Dave Ramsey sort of guy, I'd lean towards advising not to finance anyway.

Finally, it really sounds like you could use some good financial counseling from a pro looking out for you, not the so called experts that are just going to try and sell products which is what most of them are. Get advise on how to fix your credit history if it needs fixed. It also sounds like you may need advice on how to keep your mothers and your financial obligations separate.

Good luck

[NCWriter]

Javi1 wrote:
I suspect that the OP's credit rating nor his income have anything to do with the refusal to finance... Most banks are not going to loan money on vehicle that is more than 6 or 7 years old, nor on a diesel with more than 100K or a gasser with more than 50K... just isn't going to happen... you can check the loan eligibility page of BoA and other banks and they will flat tell you up front .... No

X2
The lender has to have an asset with value that should reasonably get them a return if the borrower defaults.

Lets face it, much as we all love our RVs, they are depreciating assets that are sometimes hard to sell. The bank doesn't want to deal with selling an older used one or take a bath by paying a dealer to sell it.

[WoodGlue]

If you've recently struck out twice trying to finance, it would be unwise to try a 3rd time so closely after.

The failed attempts make you appear "desperate" to lenders. Personally, I'd wait until 2014 and in the meantime, pay down some of your debt if you have any. 713 is a good score, but 2 strikes isn't a good thing in todays lending community.

WoodGlue

[Tvov]

If you really want to get loan, have you tried buying from a dealer? See what they have for used (or new) units. Dealers usually have their own arrangements for loan companies, they WANT you to buy one of their RVs! Just be careful, and pay attention to the small print!

[1oldtruck]

Check with ALLY Bank. They offer competitive rates on units up to seven years old. High mileage could be a bigger issue than you think. Talk to the bank directly. They will explain why they did not approve or what it would take to get approved.

[deleted-2]

Ya know I was thinking (hard to do at times lol)

Pentagon Federal makes very easy loans for folks who join.
Give them a try.
We recently used them for a home refinance and I used them to convert an auto lease.
PenFed is certainly worth a shot.
Just about anyone is eligible to join.

Hoping you can get into an RV soon!
Good luck there...

[2012Coleman]

If your wife has the credit history, have you considered having her apply for the loan stating your combined income? Also, I agree with what others have said about not getting financed due to vehicle age.

Edit: Are you a Good Sam Member? They have financing as well - look at the top right hand corner of this forum and click on RV Loans. Good Luck!