Paying in full before delivery???
We decided on a trailer to replace the fifth in the signature. Initial discussions were with the dealer to order in a model equipped the way we wanted. Ordering was fine, as we did not want to actua...
Forum Discussion
I was in management 36 years for a very large finance company. It works this way:
Dealers purchase their RV inventory from the manufacturer COD--and they most often finance the purchase on a wholesale security agreement commonly called a floorplan. The interest on that loan starts immediately and interest amounts to a substantial amount as expensive as RV's are. Sometimes manufacturers will cover all or part of the wholesale interest on RV's for a specific time period as an incentive to get the dealer to stock more equipment.
When an individual purchases that RV at retail, they should be very careful. The dealer could pocket the selling price and tell the finance company the unit's never been sold--paying other creditors with the money. When the dealer's inventory is physically checked, the sold unit could be treated as still in inventory since it's sitting there. And a dealer could have a bunch of sold units still sitting on his lot--a situation where it's SOT--Sold out of Trust. In other words, I would never purchase any RC and leave it on a dealer's lot 3-4 months until the weather breaks.
Another issue is that most RV's are sold on credit with a lien noted on the title. Many times, the selling dealer won't apply for a title until the RV's been delivered. That means the lien has not been properly perfected and the finance company's Purchase Money Secured Interest has not been executed. If a retail customer went bankrupt before they took possession of the unit, the bankruptcy court could deem the finance company has not secured their interest, and they'd take the RV, sell it at auction and apply the funds to the unsecured creditors. The company that financed the RV would eat the whole loan. Someone that purchases any RV (or car) must take physical delivery within a few days (7 I believe) or the loan could be deemed unsecured in a court of law.
In the economic blowup of 2008, many RV, Marine and auto dealerships went out of business. There are now far fewer RV dealerships around, and not all of them are fiscally sound. You cannot trust any dealership to take your money and not immediately deliver either a Manufacturer's Statement of Origin (MSO or S/O) or a title application if you finance your RV through the dealer. And whatever you do, don't leave YOUR RV in the possession of any selling dealer after they've been paid in full. If you're not ready to bring the RV home, leave it in an independent storage lot--but out of the dealer's hands.
Dealers purchase their RV inventory from the manufacturer COD--and they most often finance the purchase on a wholesale security agreement commonly called a floorplan. The interest on that loan starts immediately and interest amounts to a substantial amount as expensive as RV's are. Sometimes manufacturers will cover all or part of the wholesale interest on RV's for a specific time period as an incentive to get the dealer to stock more equipment.
When an individual purchases that RV at retail, they should be very careful. The dealer could pocket the selling price and tell the finance company the unit's never been sold--paying other creditors with the money. When the dealer's inventory is physically checked, the sold unit could be treated as still in inventory since it's sitting there. And a dealer could have a bunch of sold units still sitting on his lot--a situation where it's SOT--Sold out of Trust. In other words, I would never purchase any RC and leave it on a dealer's lot 3-4 months until the weather breaks.
Another issue is that most RV's are sold on credit with a lien noted on the title. Many times, the selling dealer won't apply for a title until the RV's been delivered. That means the lien has not been properly perfected and the finance company's Purchase Money Secured Interest has not been executed. If a retail customer went bankrupt before they took possession of the unit, the bankruptcy court could deem the finance company has not secured their interest, and they'd take the RV, sell it at auction and apply the funds to the unsecured creditors. The company that financed the RV would eat the whole loan. Someone that purchases any RV (or car) must take physical delivery within a few days (7 I believe) or the loan could be deemed unsecured in a court of law.
In the economic blowup of 2008, many RV, Marine and auto dealerships went out of business. There are now far fewer RV dealerships around, and not all of them are fiscally sound. You cannot trust any dealership to take your money and not immediately deliver either a Manufacturer's Statement of Origin (MSO or S/O) or a title application if you finance your RV through the dealer. And whatever you do, don't leave YOUR RV in the possession of any selling dealer after they've been paid in full. If you're not ready to bring the RV home, leave it in an independent storage lot--but out of the dealer's hands.
