Have RV Purchasing Rules Changed?

[ClassB4Me]

'Back in the Day' it was understood that buying a new RV and deciding to trade it in (in less than 2-years of ownership) would result in high depreciation and / or being upside down on your RV loan.

However, I see more and more people doing this. Have the 'rules' changed?

This Is Harder Than We Thought

We Are Selling Our RV

After the great economic crash, is RV financing this easy to obtain? Are more people buying RVs with cash (i.e.) no loan?

[markopolo]

I'd guess/assume that most new RV purchases are financed.

RV loans look to be good business for lenders: Consumer Delinquencies Fall Slightly in Second Quarter

The being upside down can be masked by a high trade-in value against an overpriced new unit.

If not trading in then it would likely be hard to avoid a hit if the down payment was very low and financing term very long and the sale was taking place early in the loan term.

I wouldn't buy a used RV without first doing a lien search. For me, that now includes used units purchased from a dealer. My last RV purchase was from a dealer and a lien search turned up a past lender who's lien hadn't been taken off the title. It added a few days to finalizing the purchase because I wouldn't purchase it without a clear title.

As for financing; a method here is a loan that is secured by the asset purchased - I joked with a dealer that basically all I needed was a "pulse" to qualify for a 20 year RV loan. Based on that experience I'd assume that it is pretty easy to purchase whatever your heart desires.

[mkguitar]

My rule is buy what you want if you can afford it.

If you are trying to figure out how to pay for it, look for something more realistic.

My house isn;t the biggest in the neighborhood- but it's paid for, my cars and motorcycles and rv and stuff are all paid for.

That's one of the best things my Dad left me.

Anyone can get financing- as to whether the terms are fair or not is in the fine print- and as above many just roll the old debt into the new debt, paying the minimum and getting deeper


Mike

[wincrasher]

No, the rules haven't changed.

I imagine getting financing for the Russos would be tough, as they are considered self-employed. The income requirements are much higher that what you working stiffs are required to have. Being retired on a fixed income is a bit better, as you can lay out your financial position on paper with alot more certainty. Not having a fixed address can complicate matters considerably, so get financing before you hit the road full time.

They will take a BIG hit on their existing RV. They bought a smaller, entry level model which will be pretty hard to sell. I told them to expect to get a hit of 40% on what they paid (not MSRP) if they can find a buyer. I think their overall plan is very ill-advised. They have a smallish class A and tow a very capably Jeep. There are LOTS of wild camping places available to them, plus they can get anywhere they'd like in that Jeep. What they need to do is mod what they have with a bigger solar/inverter/battery setup and start living the high life.

I don't finance RV's or other toys. You always want to keep your risk and overhead expenses low long term. Also, you are better positioned if you want to change something - being "upside down" is the worst and very constraining.

[wincrasher]

Originally Posted by markopolo

I'd guess/assume that most new RV purchases are financed.

RV loans look to be good business for lenders: Consumer Delinquencies Fall Slightly in Second Quarter

The being upside down can be masked by a high trade-in value against an overpriced new unit.

If not trading in then it would likely be hard to avoid a hit if the down payment was very low and financing term very long and the sale was taking place early in the loan term.

I wouldn't buy a used RV without first doing a lien search. For me, that now includes used units purchased from a dealer. My last RV purchase was from a dealer and a lien search turned up a past lender who's lien hadn't been taken off the title. It added a few days to finalizing the purchase because I wouldn't purchase it without a clear title.

As for financing; a method here is a loan that is secured by the asset purchased - I joked with a dealer that basically all I needed was a "pulse" to qualify for a 20 year RV loan. Based on that experience I'd assume that it is pretty easy to purchase whatever your heart desires.

You'd be surprised. The bulk of Class A's are paid for with cash from newly retired folks with sizeable nest eggs. If they are financed, it's because they want to preserve returns in investments. The rest of the classes are largely financed, particularly trailers. Not even the cheapest units are paid for in cash. My guess is that the cheapest units are nearly 100% financed.

[ClassB4Me]

Originally Posted by wincrasher

I told them to expect to get a hit of 40% on what they paid (not MSRP) if they can find a buyer. I think their overall plan is very ill-advised.

I am speechless!!! Trading practically new RVs sounds like a rich person's sport.

Sounds like buy-and-hold is the best strategy for us working stiffs.

[wincrasher]

It ain't for the faint of heart. That's why it's important to research carefully and think about what you truly want before you put out the money.

[BBQ]

.

ps. never buy new Class A (or 5th wheelers),
because you can get almost-new ones at a good discount.

[sebtown]

A timely topic. My brother showed up at my house with a brand new 2017 Leisure Travel Unity. He bought it with almost nothing down and twenty year financing. He could have paid cash but showed me why it made sense for him to finance. It's a beautiful rig but I prefer my paid for 10 year old Sprinter.