Paying in full before delivery???

[Flapper]

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 actually take possession of the trailer for a couple of months. The only pressure was to get the deposit down, and order in, before the end of the month, so the dealer could take advantage of (and pass along to us) the various incentives and show savings offered by the manufacturer. Of course not detailed to us, but since I was only concerned about "out the door" price, the details didn't really matter. The warning was that waiting until after the end of the month would mean a much higher price, as the dealer would not get the same incentives. Typical "decide right now" sales tactic, I assumed, but not a biggie as we were ready to commit, and ordering would meet our timeframe.

During the course of the financial paperwork signing, they suddenly "discovered" that one equipped just how we wanted had been received that day, and could be delivered any time.
The conversation and paperwork changed to straight out purchase. Thank goodness I left my checkbook at home! We left with them stressing that even with a deposit, we had to send a check for full payment ASAP.

The next morning, I sent a note informing them that I would not be fully paying for a unit we would not see (nor do a PDI on) for over two months. I would do that on the day of actual delivery.

The response has been that I could come out early to do a full PDI, pay, and they would hold it until I really wanted to pick it up. Their reasoning was that otherwise they (and I) would loose any mfg. incentives/discounts.

While I can do that - it sounds fishy. Anyone have more knowledge about how these arrangements work between dealers and mfgs? Hard to see why the mfg. might disallow a "discount" on an in stock unit, but not on one that has to be special ordered.

Yeah, standard advice is to run away..but in the end, we get what we want at a price we like, but with the inconvenience of driving a couple of hours for an additional visit.

Just a ploy for the dealer to get money in the bank right now, rather than later?

[Flapper]

Bird Freak wrote:
I just don't see a problem here. Dealer has unit you want on lot. Dealer would be happier not to have his money tied up for two months on a sale that could never really happen. Things go wrong all the time with buyers, I see it all the time. You say you have the money to purchase so why not give a deposit and do PDI. Have dealer fix everything on found on list and then finish paying for unit. Now everything is ready to go when you are ready to pick it up instead of waiting two months for unit to come in and then doing PDI and possibly waiting months for repairs before you can pick up.

The issue in the above is that the dealer initially was not willing to wait - full payment was expected before anything found in the PDI was fixed (or I lose the "discount").

BUT - their subsequent course change in willingness to wait signals a good direction, so while a potential, I have no reason to think they would drag their feet over PDI stuff. And if they do, I don't own it yet.....

[Bird_Freak]

I just don't see a problem here. Dealer has unit you want on lot. Dealer would be happier not to have his money tied up for two months on a sale that could never really happen. Things go wrong all the time with buyers, I see it all the time. You say you have the money to purchase so why not give a deposit and do PDI. Have dealer fix everything on found on list and then finish paying for unit. Now everything is ready to go when you are ready to pick it up instead of waiting two months for unit to come in and then doing PDI and possibly waiting months for repairs before you can pick up.

[Flapper]

Wow, things are more complicated than I thought! My speculative worst case was that they just wanted to avoid carrying costs - get the money now, to pay the bill that was due.
In the end, after an email exchange where they didn't go into any more detail as to "why?", they readily agreed to postpone the pickup/purchase to the dates I wanted at the price we negotiated. Unclear whether I get the one that was already delivered, or a fresh from the factory one - but as long as it passes my PDI, it doesn't really matter to me.
I hear what you are saying about the impacts of the recession. My old dealer (who was fantastic) rapidly expanded by acquiring other failing dealers. This new one too has become a local "big player" by also doing the same thing. The new seems to check out, best as I can ferret out what little is available about financial stability. Their willingness to meet my terms seems to bode well for the future. We'll see how the PDI and response to it goes in a month or so.....

[Bamaman11]

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.

[michigansandzil]

We just ordered a new unit. We put down a deposit and we are locked into the incentive price regardless of when the travel trailer arrives.
This approach seems standard to me.

[fj12ryder]

wbwood wrote:
... There is obviously something in it for them. ...

I would certainly hope so. I seriously doubt that they are in the trailer business just for their health. I would assume they're in it to make money. If they make money, and you save money, everyone is happy.

[wbwood]

They are more than likely full of BS. Using pressure techniques. There is obviously something in it for them. I would of told them that you stick with the original agreement or the deal is off. It's their fault if they lose out on something they already agreed to. Unless of course there was a communication breakdown somewhere.

[fulltimedaniel]

I would try to keep focused on what you really want to achieve.

Do not get mired in emotional issues like: "I want it when I want it"

There is value here and a new opening for you to lower the price a bit.

First; inspect the trailer on their lot with a fine tooth comb. It is highly unlikely that it is exactly like the one you were ordering. Find that difference and bring it out as a compromise you will make for some money off and you will take the trailer now...which is what the dealer wants.

You get your new RV and you and thee dealer compromise a bit.

But DO NOT take delivery at any time until a complete, and I do mean exactingly complete PDI is done to your satisfaction.

[Flapper]

JALLEN4 wrote:

Flapper wrote:
Let's clarify:
The question was about what seemed to be illogical reasoning. They claimed I would loose mfg. incentives for one on the lot if I didn't fully pay before the end of Feb, but could keep the discounts for one put on order, that wasn't due for 2 months, that I didn't have to pay for until it came in.

I was wondering if mfg. rebate arrangements with a dealer can be that arcane.



If I buy the one on the lot, I am at least out the time/cost of the extra trip (a few hours of drive time) AND the insurance for the couple of months before I really want to get it, since I own it. If the PDI reveals any big items to fix, they have time to fix it, but not much incentive, because of the demand that I pay right away in order to keep the discounts.

If I order, I am in a much better position to make sure everything is fixed, before paying. And there is no hard time limit on keeping the discounts. I don't incur additional travel/insurance costs, at the least.

Just trying to assess whether there are real reasons to their logic about the disappearing discounts, and they are on the up-and-up, or if I should be more guarded in building trust in this new relationship.

As a retired dealer, I can assure you that yes the rebates can work that way. For units already on the lot, the rebate can have a finite expiration date. It may or may not then be replaced with a better or worse rebate. Often, the manufacturer will extend the rebate to ordered units. This simply allows them to gain additional business. You would also be eligible for any newer and better rebates when the unit came in if you knew about them. On the other hand, if the manufacturer allowed rebates to be paid on in-stock units months down the road, it would have the effect of simply extending the rebates without a finite ending date thus negating the purpose of rebates to spur immediate business.

Thank you for that clarification! It gives a better understanding as to the dealers justifications for the either/or proposition.
Many of us have been, unfortunately, in the position of hearing "whoppers" from salesmen - "Your 1/2 ton can tow that", "WD Hitches don't add weight to the tongue at all, they remove it", etc. So the buy now or order in dualism raised an eyebrow. Yes, the reasons for delaying were minor conveniences, and in the end, if I had to take delivery now to get "the deal", I would have. But I would have had a nagging question about their integrity - which appears to be all good, based on the above.

[minnow]

Sounds to me like the OP is not ready to buy now. So wait and take a chance you'll be able to get the same deal later on. The argument of additional trip to the dealership and the insignificant additional insurance costs sounds like grasping at straws to justify what you really want to do - which is put off the purchase for a few more months.

[JALLEN4]

Flapper wrote:
Let's clarify:
The question was about what seemed to be illogical reasoning. They claimed I would loose mfg. incentives for one on the lot if I didn't fully pay before the end of Feb, but could keep the discounts for one put on order, that wasn't due for 2 months, that I didn't have to pay for until it came in.

I was wondering if mfg. rebate arrangements with a dealer can be that arcane.



If I buy the one on the lot, I am at least out the time/cost of the extra trip (a few hours of drive time) AND the insurance for the couple of months before I really want to get it, since I own it. If the PDI reveals any big items to fix, they have time to fix it, but not much incentive, because of the demand that I pay right away in order to keep the discounts.

If I order, I am in a much better position to make sure everything is fixed, before paying. And there is no hard time limit on keeping the discounts. I don't incur additional travel/insurance costs, at the least.

Just trying to assess whether there are real reasons to their logic about the disappearing discounts, and they are on the up-and-up, or if I should be more guarded in building trust in this new relationship.

As a retired dealer, I can assure you that yes the rebates can work that way. For units already on the lot, the rebate can have a finite expiration date. It may or may not then be replaced with a better or worse rebate. Often, the manufacturer will extend the rebate to ordered units. This simply allows them to gain additional business. You would also be eligible for any newer and better rebates when the unit came in if you knew about them. On the other hand, if the manufacturer allowed rebates to be paid on in-stock units months down the road, it would have the effect of simply extending the rebates without a finite ending date thus negating the purpose of rebates to spur immediate business.

[Walaby]

I understand you just want an answer about the logic about the discounts, but think about it, you are saying the fact you have to make another trip now as opposed to two months from now (couple hours.. shouldn't be a big deal), and you have to pay insurance for two months (which should be, what $15-$20) as rationale for not picking it up now. You're talking about dropping tens of thousands of dollars on a purchase, and the decision hinges on a couple of bucks of insurance?

Their logic is simple.. get a sale and an influx of cash now vice a maybe two months from now. I say maybe because people back out of their orders all the time.

I think the dealer would be incentivized to fix anything you find before end of Feb.. or, you walk.

We aren't there so we can't tell the body language, tone etc of the discussions you're having. You are the only one who can judge how truthful they seem.

Mike

[doxiemom11]

I think you should either complete the deal or let them keep the unit that is there and go ahead and place your order for delivery later. If I were the dealer, I would either want that unit available for sale to someone else,- or- for you to own and insure it until you were ready to pick it up. I think they are being very fair with you.

I would think incentives would be just like on cars. And yes, you must usually take delivery by some specific date to take advantage of the incentive. When you take delivery to qualify for the incentive, you would be paying for that vehicle.

[chiefneon]

Howdy!

Personally I walk away and come back in a couple of months when you want to take delivery of the unit. I fought the price will change if they still have it except go down and if it doesn't look somewhere else.

"Happy Trails"
Chiefneon