What happens when a vehicle is upside down?

[Doneworking]

Buying any new vehicle should be an enjoyable experience. They cost a lot of dough and are an infrequent purchase. RVs, cars, pickups, SUVs, all are pretty much the same in my experience: a real pain in the rear to buy.

I got tired and walked years ago from all the games, hustles and total lack of professionalism of most vehicle sales people. Most have limited product knowledge and I have even been given a business card with a telephone number penciled in for the salesman. This was down the street at a high volume dealership that controls one of those "magic miles" of various brands stretched for blocks on an interstate. You see them in every metro area. The guy could of at least used a pen, not a pencil.

The last vehicle I purchased was from a mom and pop dealer in a small town sixty miles away. The folks there were courteous, straight and we completed the entire transaction without a bit of the carnival hustle.

In this day and age when all the information is available online about virtually any vehicle, I think it is up to the buyer to be self educated and be responsible. Relying on a "salesman" for anything to do with four or six wheels and a motor is a big, big mistake.

Buying a recreational vehicle is almost the same kind of experience. Most "sales persons" don't know come here from sic 'um about what they are selling. Again, self education and research are the only friends you are going to have in these transactions. And that includes educating yourself on the true cost of purchase and annual ownership.

Purchase price is just the start of the costs. If you finance it over time, you really have to think about maintenance costs, operational costs, storage fees, taxes, insurance etc. Sometimes, the "payments" are a smaller component of "costs" than first meets the eye.

[avanti]

Originally Posted by <<B-Guy>>

Good advice - only thing that I have heard though - especially in relation to RV's, is that dealers can make point of making life difficult for you in getting service. warranty work etc if you did not buy from them specifically.

Yes, this seems to be the case with many RV dealers. But then, the whole RV service world is a total mess. I personally would not count on getting much help from them in any event.

As far as I can tell, though, there is no trace of this problem left in the automotive new-car dealer world. They have all come under the thrall of professional management. The service departments are separate profit centers and couldn't care less where you bought your vehicle.

[avanti]

Originally Posted by <<B-Guy>>

I was a bit nervous that when I took our trailer and truck to them I would get an argument that I had misrepresented them, (I had sent descriptions and photos) but that didn't happen, and all went smoothly.

Yeah. That reminds me of a step that I left out of my algorithm:

If you have a decent trade-in, just tell the dealer (after you have made your deal). Quite likely, they will collect the VIN and have you take pictures that they will use to give you a trade-in quote. The flat-bed will leave your driveway with your old car on-board.

I have actually done all of these things. It works amazingly well.

[Doneworking]

Financially, I just figure on any new passenger vehicle (RVs excluded) about $500 a month for depreciation, insurance and tax. Now, is that accurate?

NO. But you can run that total forward in your head as months/years go by. Six grand a year, MOL.

But, it does make me realize that at least that amount is or will be realized at sales/trade time. I always assume I will keep a vehicle for at least four years and I always retail my vehicles and never trade them. I keep them pristine and have a list of folks that are always wanting to know if "are you about ready for a new one?". That saves a bundle. I save up my dough to buy vehicles and I don't finance. That saves as well, if not in terms of money certainly in terms of hassle and now that I am retired hassle free is part of the imperative.

RV wise, I have purchased one used and the others new. I would never go back to the dealer for minor problems and just fix it myself. Remember about the word "hassle" above? If it was a major problem, that's one thing but I guess I have just been lucky with RVs and never had a major problem under warranty. Or out of warranty. I maintain and service every part of the beast meticulously, store them inside and that saves a lot of money in the long run if you have the ability to close the door behind them.

Anyway you cut the cake, an rv is going to cost you dough and is not an "investment" but an enjoyable hobby.........and expense.

[afb]

Thanks for all the great advice!
I want to acquire an RV in a financially sound way, so buying used is definitely the way to go. My credit is good so I'd have no problem qualifying for a loan, but I’m not sure that a 15 year loan on a used (and still depreciating) vehicle is a good idea. That’s why I’m thinking that searching for sale listings, talking to sellers and offering to take their payments might be a better way to go.

[W9TR]

The Fed dropped the prime lending rate several weeks ago so we should see that show up in RV loan rates if it hasn’t already. Depending on the interest rate, even if the vehicle is depreciating rapidly, it may make sense to take out a loan instead of burning cash.

[SteveJ]

Originally Posted by afb

Thanks for all the great advice!
I want to acquire an RV in a financially sound way, so buying used is definitely the way to go. My credit is good so I'd have no problem qualifying for a loan, but I’m not sure that a 15 year loan on a used (and still depreciating) vehicle is a good idea. That’s why I’m thinking that searching for sale listings, talking to sellers and offering to take their payments might be a better way to go.

Just make sure that the numbers work for "taking over payments". The seller could be upside down by thousands. I'm not sure, though, that there is such a thing as taking over payments, it's basically a new loan, I think.

Everybody's situation is different but I can't fathom the idea of taking out a 15 year loan on an RV. If I were faced with that I would assume that I could not afford it and get something different for less.

[rowiebowie]

Assumption of loans is bassically a thing of the past. And as many have pointed out, was rarely an option that made financial sense anyway.

Sorry, couldn't resist since I first thought this thread was about a crashed rv.

[GeorgeRa]

We only had 3 Van/RVs purchases with pleasant experience:

A few years back we purchased a passenger Sprinter. Bulk of my time was spent defining the specification. I emailed RFQ to the Costco program participating dealers, prices were almost the same so I picked the dealer with the best customer rating, payed the down payment and a few months later we drove to the dealer in Seattle to pick it up. We stated upfront we were absolutely not interested in any extended warranty, upholstery or paint treatment and dealer honored this request, paid the remaining amount and drove the van back to Portland. Painless.

2 Westfalia Camper Vans purchased from VW dealers, one with EU delivery, prices set, painless.

All other RVs were just painful processes, likely never again.

[Jon in AZ]

Originally Posted by rowiebowie

Assumption of loans is bassically a thing of the past. And as many have pointed out, was rarely an option that made financial sense anyway.

Sorry, couldn't resist since I first thought this thread was about a crashed rv.

Agree. You’ll have to start over with a new loan that makes financial sense. And if the RV isn’t worth the existing loan payoff amount, that’s sadly someone else’s problem you can’t afford to solve.

Got really nervous when I saw your picture, because that looks exactly like mine. Had to go out to the driveway and make sure it's still there. :

[<<B-Guy>>]

Originally Posted by rowiebowie

Assumption of loans is bassically a thing of the past. And as many have pointed out, was rarely an option that made financial sense anyway.

Sorry, couldn't resist since I first thought this thread was about a crashed rv.

I wondered at first too and was going to reply that all the money falls out of your pockets - in a way I guess it does.

[Bnook1@aol.com]

We have a 2014 beautiful airstream that we are paying on and are thinking of selling. To buy a new one is $250k. Ours is $92k. Diesel, extra long so has four captain chairs. 42k miles.
Love it, but my husband can't drive it now.

[Roadtrek Adventuous RS1]

Originally Posted by Bnook1@aol.com

We have a 2014 beautiful airstream that we are paying on and are thinking of selling. To buy a new one is $250k. Ours is $92k. Diesel, extra long so has four captain chairs. 42k miles.
Love it, but my husband can't drive it now.

Are you saying you can't drive it or travel?

That's unfortunate .

[engnrsrule]

Lots of good advice here. Most importantly, an RV is a luxury purchase and not an "investment." Like cars, a buying decision can be highly variable. The worst thing you can tell a salesman is "I want to stay under $X a month" because they will come up with a loan that achieves that number - they have 7 year car loans now for that purpose. It is not unlike the old adage about buying a cabin cruiser..."How many miles per gallon does it get?" "If you have to ask that you can't afford it."

Financing any new vehicle will almost certainly result in a period when the loan is upside down. This is acceptable if you want the longer trouble free operation of a new vehicle and expect to hold it through the upside down period. But it can be a problem if a change in life circumstances requires disposal of the unit. One way to insulate that risk can be using home equity loan to purchase the RV. Selling the vehicle does not make the loan payable, giving you more flexibility.

Another aspect to RV financing is that the lender may not allow the unit to be rented. Sometimes the idea of making back some money renting your unit can be a force multiplier that gets you into a better unit. If renting is part of your formulary and you are financing, make sure your lender will allow it.

We elected to buy an older Class B Diesel Sprinter and are very happy with our decision. We appreciate the quality and condition. We had initially considered renting it to offset upkeep and purchase, but like it too much to take the risk and never did.

Good luck!

[HitchNride]

Originally Posted by afb

I am interested in buying an RV. I visited a dealer and was shocked to see how quickly they depreciate. When combined with the 15-20 year loan terms that are required to make them affordable, these vehicles will in short order, be upside down. What happens when someone's life circumstances change and they no longer want their RV but owe more on it than its worth? What choices are available to them?

I don't want this to happen to me, so I started thinking about alternatives. Is there such a thing as buying an RV by taking over someone’s payments? It seems like this might be a win-win situation: a good way for someone to get out from under their payments and a financially sound way for me to acquire an RV. Am I being naive or overlooking anything?

No one really answered your question, so I wanted to chime in - your options highly depend on how many assets you have (equity in house, cash in bank, any expensive/documented collections or antiques, etc.).

Now, if you are what is called "judgment proof" - which means you really aren't collectible - you don't earn so much a month that you could pay towards a lawsuit, and don't have any assets that are worth going after - then you could simply leave the financed unit with the bank (or heck, let the repo people come get it - you won't have to pay it back), and at most, you might need to go to court once, either on your own or with an attorney, show the judge that you have no way of paying any collections or lawsuit, and they will simply tell the creditor to leave you alone forever more, and that's that. It will hurt your credit severely for two years but will be off the record after 7-8 years.

Depending on what other debts you have and your overall situation (debts, income) - you could also file Chapter 7 or 13. If you earn enough to continue making payments on it though, then you would still have to pay in a Chapter 13. If you somehow qualify for 7, then you would not.

Overall, if you can still make payments easily, but just don't want it - then yes, they will start collections, and then get a judgment to allow them to start deducting the cost from you paycheck or bank account directly. But if you were not really able to afford it in the first place, the judge will probably stop the collections and you're all set (besides hurting the credit report).

Oh, and on car negotiating - some good points, but the thing I learned when I switched cars over several years - instead of wasting all those trips to the sales manager... After one or two passes, reiterate your final offer, and get up to leave. As soon as your hand touches the door handle, usually someone will run after you and say "wait, wait - let me try ONE more time!". The only place this didn't work for me was at a Dodge dealership. (GMC seems to also not negotiate AT ALL. However, their prices do seem better than Ford, for example - Ford and especially Chevy seem to build in a LOT of buffer... even one time just LOOKING at a truck, the floor manager said if I was interested, he could sell it for $5,000 less than the already "discounted" price (which honestly seemed like a great price, and I knew the trim levels/options pretty well for that year). I was actually surprised.

[HitchNride]

Originally Posted by engnrsrule

It is not unlike the old adage about buying a cabin cruiser..."How many miles per gallon does it get?" "If you have to ask that you can't afford it."

Hehe - the one I heard and always remember - when talking about boats - you don't quote miles per gallon - you ask, how many gallons per mile does it take?

[engnrsrule]

I do know that boats are gallons per mile - trying to illustrate the ignorance of the wannabe boat owner...

[Ray B]

You have 2 choices: (A) Ride out the loan the years needed until it is even, or (B) buy-out your loan with cash.

We have been in this position and are nearing it again.

We bought our first Pleasure-Way in October, 2015 at the California Show, it was a new but discontinued model and we got a pretty good deal ($110k list, $75k price). Put $10k down with $65k loan. My wife decided she didn't like making the Murphy Bed model so we sold it 1-1/2 years later for $70k. Good? No. We lost $5k of our down payment plus 18 months of $420 payments for total loss of $12,560. Now, to say it was a total loss is a misnomer. We drove around the country in 2016 and stayed in Arizona in the winters of 2016 and 2017. But to do that was $12,560 out of our pocket (~$698/mo) - just in purchase costs.

In April of 2017, we bought our present 2012 Pleasure-Way Plateau twin-bed model on the Mercedes-Benz diesel chassis. Got a great used deal ($70k for $112k new with 12,800 miles). Again put $10k down with $62,000 loan after taxes. Even though we love the floorplan, we are again looking to sell as the Mercedes-Benz is just not worth the cost or hassle. So this time our dilemma is that we will be lucky to get our loan balance ($56k) for it as there are a number of high dollar mechanical issues to be dealt with first. So total out-of-pocket on this one would be loss of $10k down and (again) $420 payment times the 36 months we've had it. $15,120 purchase total loss but again with two trips around the southern U.S.; spending winter of 2018 in Arizona; and now using it semi-regularly in Florida. But again, the $15,120 is only the loss from the purchase (~$678/mo) - not total costs (especially with all the mechanical issues of the Sprinter.) So, we actually are now inclined to keep this one even though we are not satisfied with it mechanically, because of the financials.

RV's are not relatively cheap to own unless you live in them full-time w/o a brick 'n' mortar, which we have done for a time. Even with all our problems, we still love RV'ing and owning our rolling tiny house - but we have usually paid $500+ (plus depreciation of just under $200) per month for the privilege and thank God our community allows the Pleasure Way to be parked next to the house eliminating storage fees.

Ray Brown
2012 Pleasure Way Plateau TD
Ormond-by-the-Sea, Florida

[Jon in AZ]

Ray, thanks for your vulnerability in putting numbers to the issues. I’m sure it will help others. Sorry to hear about your troubles with the Sorinter.

[EnduroRdr]

To answer the OP question:

Best solution is to buy used!
Having said that - your best bag for the buck is to shop, shop, shop, shop and continue to shop until you find that person that bought it new, cherished it for years, took absolutely painstakingly care in upkeep, but worked his ass off paying for it, only to find after several years, (and once he quit or lost his job) he can’t afford it and now has no option but to sell at market value.

Yeah I know that’s a sad story, but one mans loss is another mans gains.
Those deals are out there, you have to know the product and recognize the opportunity but more important is be ready to act the moment you find that deal!

And yes I also know, I sure used a lot of run on sentences! [emoji12]