About to purchase- Finance questions

[RoyBell]

Hey all, I have a downpayment on a new travel trailer and just sold my pop up last night. Thursday I will go to sign papers.

They were touting 4.99% finance rates until I got the deal. Then it jumped to 5.99%. I just purchased a car 2 months ago and my credit was 775 at that time. They pulled it Monday at the camper place and now it's 706. Big drop. I told him no way @ 6.99. He got it down to 5.99% which still seems high.

What should I expect? MSRP is $32K. Purchase price $20K I will be putting $10,000 cash down and financing $12,000 for roughly 10-12 years...whatever gives me the best rate, then I will pay down early.

I think with that kind of down payment I should be in the 3-4% range. Not sure what the deal is with my credit and the huge swing but hoping I can show the bank the rating from 2 months ago to help swing into a better rate.

Any thoughts? Either way the trailer will always be positive in equity.

Edit: I found a local credit union @ 4.24%. My score is lower than anticipated because my old car AND new car loan both show up. Old car should be off by now! The break over from Good to Excellent is 720 points. 720 is good for another .25% from the CU. Today the CU pulled it and it showed 710 (I did close some cards yesterday, maybe it helped?). So close.

[RoyBell]

I may had not understood him correctly. He said the larger amount of financing the lower the rate. This site seems to agree with that statement. https://www.lightstream.com/rv-loan?fact=4492&cid=PS|DSK|NB|travel_trailer_loan|P|GOOG|fact=4492&ef_id=VQhT8gAABCSdFgOR:20150603132559:s#rates

I think he mentioned a longer loan term was offered on a larger loan amount which is where I came up with that.

I will call him to see what 60-70 months can net me.

I have purchased 20 different vehicles in my 17 years of driving so I am aware of borrow rates and credit scores.

My truck is a Tundra with the 5.7. Tow rating of 10,300 and class IV hitch puts TW around 1300 lbs. I am picking up a 28' Radiance, 6000 lb on the sticker and 750# TW. Spent a little more for a lighter trailer that has a larger GWR. Them quad bunk trailers are heavy compared to double bunks for some reason.

[ScottG]

wing_zealot wrote:

ScottG wrote:

midnightsadie wrote:
never ever use the loan company at the rv dealer they get a real nice kick back.

Most people don't know this but it's true. A good deal of their profit comes from these legal kick-backs.

What difference does it make to me? If I do my shopping around and the dealer is offering me a better rate than I can get anywhere else; what do I care who makes what? The loan company makes money, so they're sharing it with the dealer. No skin off my nose. Only thing I care about is who is giving me the best bottom line.

The difference is you can almost always get a better deal if you do a little leg-work yourself.
The lesson for folks is to not just fall into the dealers easy financing.

[Vulcan_Rider]

RoyBell wrote:

They were touting 4.99% finance rates until I got the deal.

This is an easy one......for an outsider looking in.

IF they ever at any time during your personal communication with them quoted the 4.99 rate and then didn't honor it later......WALK.

The RV market is still WAY depressed. In Florida, it is WAY,WAY depressed with deep discounts even on new models. You don't have to deal with anyone who isn't 100% open and honest.

[wing_zealot]

ScottG wrote:

midnightsadie wrote:
never ever use the loan company at the rv dealer they get a real nice kick back.

Most people don't know this but it's true. A good deal of their profit comes from these legal kick-backs.

What difference does it make to me? If I do my shopping around and the dealer is offering me a better rate than I can get anywhere else; what do I care who makes what? The loan company makes money, so they're sharing it with the dealer. No skin off my nose. Only thing I care about is who is giving me the best bottom line.

[beemerphile1]

Every time a lender even looks at your credit report, your score goes down. Your score went down because you just took out a loan on a car, perfectly normal.

Forget the dealer, go to your local credit union and apply for a loan. The members of a credit union are also the owners so the loan officer works for you.

Open a free account at https://www.creditkarma.com/ to learn how your credit works and learn what improves your score.

To help you prevent a costly mistake, you might want to start a thread listing your trailer and tow vehicle before you buy a trailer that is too big. Common mistake people make is to buy a trailer and then have to go and buy a bigger tow vehicle.

[ScottG]

midnightsadie wrote:
never ever use the loan company at the rv dealer they get a real nice kick back.

Most people don't know this but it's true. A good deal of their profit comes from these legal kick-backs.

[patperry2766]

midnightsadie wrote:
never ever use the loan company at the rv dealer they get a real nice kick back.

Only if they can mark up the rate. If they write the loan for the APR from the lending institution, then they don't get squat.

[wing_zealot]

RoyBell wrote:

wing_zealot wrote:
Financing $12K for 12 years you are never even going to get close to 5%. I think if you start checking rates online, in order to get anything close to 5% you would need to finance about $25K or more. You did well by getting 5.99% if you ask me.
Now it's time for the popcorn as you get all the "how stupid you are" from the pay cash folks.

I was told the longer the loan, the lower the rate and that the break even point was $12K to loan.

I just bought a car 2 months ago and used some of my free cash for that. I am not going to deplete my savings by buying cash. I am only 33 and rather have it in the bank.

The longer the loan the lower the rate? I don't think so!
And what does "break even point" mean?

[patperry2766]

4.5% x 60 mths for my current loan thru my CU

6.75% for 85-120 mths minimum financed $15K, so 5.99 probably isn't that bad.

Lower the loan time and more that likely you'll lower the APR on that small of an amount.

[midnightsadie]

never ever use the loan company at the rv dealer they get a real nice kick back.

[coolbreeze01]

Heard the Donald say he was paying 2% for money. 5% is ridicules.

[spoon059]

Another option is to finance the whole purchase price to get a lower interest rate and immediately pay $10,000 towards the price.

[RoyBell]

Kafn8td wrote:
We financed $12k @2.99% from our credit union. Pretty much the same scenario as you.

That is lower than I would had expected. I was going to check my bank to see what they offered.

[RoyBell]

wing_zealot wrote:
Financing $12K for 12 years you are never even going to get close to 5%. I think if you start checking rates online, in order to get anything close to 5% you would need to finance about $25K or more. You did well by getting 5.99% if you ask me.
Now it's time for the popcorn as you get all the "how stupid you are" from the pay cash folks.

I was told the longer the loan, the lower the rate and that the break even point was $12K to loan.

I just bought a car 2 months ago and used some of my free cash for that. I am not going to deplete my savings by buying cash. I am only 33 and rather have it in the bank.

[Ductape]

Best to do your own financing; not let the dealer do it.