Sound like a good deal?

[scarecrow56]

I have been offered to buy a new 2019 Coachmen Freedom Express Select 24SE for $20,000+$1250 tax+$799 dealers prep fee+$200 tags and registration= $22,250 out the door. I think its a good deal although I don't like the dealer prep fee. I am also nervous about a $1000 deposit that, if I don't like the interest rate, they will keep. The deposit is refundable at the sale but they take it before they run my financing. Is this a standard practice in the industry? I have only bought 1 other camper in my life and that was 20 years ago. Also they're talking about no money down, no payments for 90 days. They're saying the payment will be between $219 and $239 a month on a 144 month note which I thought was kinda high but I don't know how to figure in an interest rate. Wadda ya think? This is at Giant Recreation World in Palm Bay Florida. Thanks

[thomasmnile]

Last TT we purchased, no local bank, credit union or even State Farm Bank could top the interest rate on dealer loan which was funded through Bank of America Specialty Vehicles, which is not connected to the retail bank lending operation. Took the 15 year financing option because strangely enough it was 50 basis points lower than a shorter term of 7 years which is what we asked for. No matter, we paid it off in 7 years making 2-3 payments a month.

[Gdetrailer]

thomasmnile wrote:
In my experience a retail bank (especially the major banking chains) don't give a better interest rate than a car or RV dealer. Credit unions may be able to offer lower interest rate but that comes with larger down payment requirements and shorter loan terms than dealer financing can offer.

Much we don't know about the OP's situation financially though he did acknowledge some significant factors about income and employment. The dealer offer on the RV he was offered might be the best he can get. Since it's a simple interest loan offer, he can always accelerate the payments if he can afford to and pay the loan early without penalty. Our last RV purchase was financed for 15 years, we paid it off in 7.

Longer loan terms tend to have HIGHER INTEREST RATES, especially more so with HIGHER RISK LOANS like a RV. It is something to take into consideration especially with a RV which in 5-6 yrs has nearly zero resale value when compared to what it was valued at the time of purchase. Not to mention a 15yr loan you ARE paying the majority of interest back on the loan in the first 2/3rds of the term.

Paying off early can save money provided you consistently pay extra towards the PRINCIPLE BORROWED every month.

Best bet as always is to take THE SHORTEST LOAN TERMS you can afford easily THEN add extra payments towards the PRINCIPLE (you MUST SPECIFY this otherwise they apply the extra to BOTH P & I).

Bought a house on a 15 yr mortgage, payed extra towards the Principle every month, paid off in 11 yrs saving a considerable amount in interest.

All of our vehicles we take a 5 yr loan and pay it off in about 2 yrs..

We also do not go for top feature/gadget load high dollar stuff either, we buy well below our means in order to keep from needing long loan terms. That is where mortgage amortization calculators are your friends.

Very wise use of credit..

RV dealers like auto dealers and even realtors love folks who have no real knowledge about loans or finances which is why they tend to find a sweet spot in your payment comfort levels.. Then they will simply extend the length of your loan to work out the payments to your liking..

Favorite line is "what payment amount do you want"..

OP, Sorry for derailing the thread..

[siamese]

144 months?!?!? Are you nuts? You are going to sooooo upside down on that trailer. Is it a good deal? No!

[thomasmnile]

The dealer prep is surely a profit pad, but I've really been astounded at some of the anecdotes posted about no prep dealer prep at delivery. We bought our TT from an RV One dealership. On delivery day, we were taken to a 'delivery pad' where the trailer was set up, all utilities and sewer connected, even the fridge was chilled and AC up and running. We were shown every detail, the operation of everything demonstrated. The trailer was thoroughly cleaned inside and out. Time spent with us was 5 hours, another 45 minutes going over the WDH after the truck was hooked up and the hitch adjusted to the the trailer. Very thorough and well done.

[colliehauler]

I would say to try your banker or credit union. If you have done business with them for a period of time they should be able to beat that interest rate. If they can't what have you lost. Like others have said dealer prep fee is bogus, doesn't mater as long as the bottom line is acceptable. I would shop online for the trailer for the best price. Even if you don't purchase from that dealer it can give you a bargaining chip to deal with your local dealer.

[badsix]

NO WAY would I EVER give someone 1000.00 non refundable until I knew EXACTLY what I was getting for it.
Jay D.

[thomasmnile]

In my experience a retail bank (especially the major banking chains) don't give a better interest rate than a car or RV dealer. Credit unions may be able to offer lower interest rate but that comes with larger down payment requirements and shorter loan terms than dealer financing can offer.

Much we don't know about the OP's situation financially though he did acknowledge some significant factors about income and employment. The dealer offer on the RV he was offered might be the best he can get. Since it's a simple interest loan offer, he can always accelerate the payments if he can afford to and pay the loan early without penalty. Our last RV purchase was financed for 15 years, we paid it off in 7.

[ZINGERLITE]

badsix wrote:
I'm no finance guru. but in my younger years if I had to finance something I would get the payments low. then make double or triple payments when ever I could. the if hard times came around I could still make the low payment. I was usually able to pay the thing off quite quickly and save on the interest.
Jay D.

This has been my philosophy. Its either that or go without.

[parker_rowe]

I called a bunch of banks directly, and none of them would offer me a better interest rate on an RV loan then the dealer got me. I was a bit annoyed by this, as I never had an issue with my banks matching or beating car loan numbers before.

My loan is with a bank, the dealer doesn't "hold the papers", the bank does.

That said, I don't like the $1k deposit that they keep if you decide you don't like the interest rate they end up getting.
That sounds real shady, like they aren't going to try to get you a good rate because you will feel committed to getting it and cave to a worse rate so you don't lose your deposit.

[stevemorris]

lots of great advice

my 2 cents worth? the prep fee is a bunch of ****
if you are lucky they will sweep the floor and remove the wrapping from the upholstery

walk away

[campigloo]

Don’t forget the dealer wants to get your money more than you want to give him your money. Look at the camper and figure what you are willing to pay for it and use that as your ceiling. You can also use the financing as leverage. Like someone said above, the dealer is getting a kickback from the lender. The dealer more than likely gets end of year incentives from the manufacturer as well. Go in with a here’s my out the door offer, no more. They just might get off their high horse!
Good luck!!!!!

[CFerguson]

Banks differ. Go ask. If you can show sustained income from your work, I see no reason to believe a bank (or CU!!!) would deny you. But again, banks are different in how they treat loans.

[Campfire_Time]

Some dealers will go to bat for you to find the best deal on the loan. Some dealers work with specific fly by night operations and will rake you on the interest rake no matter how good your credit is. It's the same as car dealers. Our dealer got us a fair deal through a local credit union.

That said I would not put a deposit down until they can give you a written paper with interest rate and the name of the lien holder. In other words make the deal contingent on a favorable interest rate and reputable lean holder. Be prepared to walk away. However $799 dealer prep for a $20k trailer? Way overboard. Ours was somewhere in the neighborhood of $150, and the PDI was free. I'm betting they are going to charge you for the PDI.

Good advice about looking elsewhere for both the trailer and loan.

[Gdetrailer]

scarecrow56 wrote:
My credit score is 785 however I'm self employed and show a low income so wouldn't that keep me from getting a loan at a bank? Also, yes I would keep the trailer for 12 years or more. My last one I kept for 20 years. Im also looking at it as a second home when I retire in 2-3 years.

Depends.

Low income and low debt ratio coupled with good credit score should not be much of deterrent to a bank.

Does not hurt to ask, start at YOUR bank that you deal with then go from there.

As far as keeping a RV 12 yrs or more, yeah, that saves you money however, one does need to account for the "what ifs" in life.. Kind of like a few folks I know, one had a setback in health, self employed so not working they do not make a cent.. Have to figure out how to pay the bills with zero income..

If they had a RV and paying a loan on that, wouldn't you think that the RV should go? But, you simply can't because you are so upside down on the loan you would never be able to sell it for enough to pay it off.. Catch 22 and real life..

[brantlyj]

Own a home? My wife and I just took new jobs this year but easily got an equity loan. Our rate is 4.75% through our credit union.