Best deal if paying cash or financing?

[Gavenger]

Originally Posted by 325BH

No need to agree on six months. Once you take delivery and the loan is done, you can pay it off as soon as you want.

Make sure there isn't a pre-payment penalty built into the loan first.

[325BH]

Originally Posted by Gavenger

Make sure there isn't a pre-payment penalty built into the loan first.

Loans like that still exist? I would question the shady-ness of the lender. Of course, we are talking about the RV world here!

[Superslif]

Originally Posted by 325BH

Loans like that still exist? I would question the shady-ness of the lender. Of course, we are talking about the RV world here!

Yup I heard things like that.

We recently purchased a new RV trailer. Asked the owner straight up. Can I get a better price than your advertised price in a all cash deal? Answer was No. We ended up buying from him, as his deal (advertised price) included a very very good trade in amount.

But for the same trailer from 4-5 different dealers, prices ranged from $33.9k to $41k. His price was at $34.7k

[wnytaxman]

Originally Posted by 325BH

No need to agree on six months. Once you take delivery and the loan is done, you can pay it off as soon as you want.

True, but if I tell the dealer that I will wait six months then that is what I will do. That may be why I have had a good relationship with my dealer. When I need something they usually respond positively. That's well worth six months of interest.

[vsheetz]

You are paying for everything one way or the other... I like the simplicity of paying cash. And when negotiating price the dealer knows he has a done deal once he has a number you like - so he is usually well motivated.

The first motorhome I bought - the salesman showed me the unit, etc. We wrote up a contract and I put a very low ball number on it. Salesman said they wouldn't accept it - no way - I added a check for the full amount and told him to take it to the sales manager. He came back with a done deal.

[Superslif]

Originally Posted by vsheetz

You are paying for everything one way or the other... I like the simplicity of paying cash. And when negotiating price the dealer knows he has a done deal once he has a number you like - so he is usually well motivated.

The first motorhome I bought - the salesman showed me the unit, etc. We wrote up a contract and I put a very low ball number on it. Salesman said they wouldn't accept it - no way - I added a check for the full amount and told him to take it to the sales manager. He came back with a done deal.

I do the same with my vehicles, But I don't show them the price I'm willing to except. Before I'm serious on cutting the "deal" I'll do my homework with a final price target. Has worked very well over the last 25 years. My last truck, the dealer actually bested my target price by a few $100. Took two weeks for them to re-evaluate what they were going to offer for my trade.

[burgman50]

Just went thru the cash vs finance issue while helping my dad purchase a Thor Vegas.
We made a Cash offer that was not accepted. Still negotiated but could not get that number. Made one final out the door offer using THIER financing and yes, we had a deal. FYI, offer was same as our cash offer a week earlier.

Also saw an online add for another rv with a special price, but the fine print said price was only valid if using their financing.
I am a believer that you get a better deal financing vs cash.

Oh, their rates were better than the bank and credit Union.

Tom Johnson Camping World in Concord NC in case you were wondering.

[Dutch Star Don]

My experience.......If you have great credit, you'll get the best rate and deal from your dealer. They have several finance companies that they use, based on your credit rating. The best credit gets the best rates around.

We'll be picking up a new pontoon boat in the next few weeks. I'll be putting 65% down, getting the best rate and paying it off over the next six months. The dealer loves someone who finances through them (better deal) and it's a good deal if you have good credit.

[Bob Hyatt]

Originally Posted by wnytaxman

We generally will get the financing and agree to keep it for six months which is sufficient for the dealer to get the rebate.

Credit ratings are weird machinations at best. We took out a business credit card with a very large line and saw our credit rating go UP. That's makes no sense to me but I deal with the tax code and that makes no sense to most of the world.

There is a BIG downside to doing this. That 6 months of payments is 99% interest, so when you pay the loan off, you pay very close to the same amount you would have paid had you paid in cash. At the selling price of these things, you could guesstimate about $1000 per month per $150K of selling price. If you spend $300K, that's $12,000 blown at the end of 6 months. Probably to save you $5000 in the selling price. NOT a good deal. We were offered financing, chose to pay cash. Dealer said it will cost us a little more if we do that. I told him no doubt, because we are going to drive somewhere else to buy if that happens.

[Cornbinder]

In agreement with the "finance it for the best deal and pay it off immediately" method. Been doing it this way for 20 years on large purchases, especially vehicles. The crazy thing about it is that my credit rating goes up the next quarterly report. Go figure.

One more tip is to ask to talk to the finance officer directly, and ask (tell) them they are only allowed one "pull" of your credit report. Otherwise every lender they contact will look at your rating, and this will lower your credit rating quickly.

[WeatherTodd]

If youre financing...why would you put ANY money down? Also I dont like loan applications filled out in a retail establishment. Aint no way Im listing my financial information on ANY single application. Thats a real good way to get your "identity" stolen.

When you borrow money... you go to a source. Like a bank or shylock.

From a consumer protection standpoint... I like the odds of 2 against 1 (loan) vs 1 on 1 (cash). This applies to both private and dealer sales. I really like to use credit card(s) but its unlikely you'll find a dealer or private party willing to cooperate even if you added the fees in.

Also it seems as though you paying over $10,000 in cash for anything will get you flagged or investigated or tattled on.
Also lately Ive had bank tellers and cashiers miscount a couple hundred dollars worth of bills... god forbid they needed to count $50,000...lol

I suspect the OP is trolling

[C2tuck]

Originally Posted by wnytaxman

We generally will get the financing and agree to keep it for six months which is sufficient for the dealer to get the rebate.



Credit ratings are weird machinations at best. We took out a business credit card with a very large line and saw our credit rating go UP. That's makes no sense to me but I deal with the tax code and that makes no sense to most of the world.

Agreed. I paid a vehicle off a few months ago and my score dropped. Then dropped again when I paid another loan off and was debt free besides house. Go figure...

[BillJinOR]

Originally Posted by Bob Hyatt

There is a BIG downside to doing this. That 6 months of payments is 99% interest, so when you pay the loan off, you pay very close to the same amount you would have paid had you paid in cash. At the selling price of these things, you could guesstimate about $1000 per month per $150K of selling price. If you spend $300K, that's $12,000 blown at the end of 6 months. Probably to save you $5000 in the selling price. NOT a good deal. We were offered financing, chose to pay cash. Dealer said it will cost us a little more if we do that. I told him no doubt, because we are going to drive somewhere else to buy if that happens.

Actually if you look on a amortization chart it’s not 99% interest .. most loans are simple interest so a 300000 loan at first would be closer to 50% of the payment in interest and the other 50 to principle reduction .. assuming of course a 4% interest number for someone with excellent credit
After 6 months at 4% / 15 year on 300000 the payment total is approx 2200 per month with 1 grand in interest and 1200 principle with the interest decreasing ea month
After 6 months you would have paid about 6 grand in interest and reduced the loan by a little over 7 G .... big numbers to be sure. But you have reduced the principal from 300 to 293

Everyones position and comfort level is different. I can easily see Someone with 300G in cash investments could easily be consistently making that 12 grand a year or more and want to risk it. Feeling it’s a good deal

[wilburn]

if you are interested in how credit works, go to the experts.

https://creditboards.com/forums/