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Old 12-20-2015, 09:00 PM   #15
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We have excellent credit. We went to the dealer pre-approved with what we thought was the best rate. The dealer, Mike Thompson RV, offered a better interest rate From The Same Bank which offered the pre-approval. The dealer apparently gets the preferred rate for directing prime customers. I realize that in the past and probably currently dealers can direct loans both as a money maker and to assure a sale to a higher risk customer. However, in today's economy rate shopping is prevalent among those who can.
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Old 12-20-2015, 09:11 PM   #16
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I am going to get my own financing pre approved from now on. Paying an extra percent for more dealer profit is not happening here. I just cancelled my current purchase agreement. I have a TT, I don't NEED a new one if they are marking up the financing.
Thanks for all the input.
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Old 12-20-2015, 09:14 PM   #17
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The challenge is that dealers and lenders are not required to disclose what fees lenders pay dealers for originating a loan. Typical fees received by auto dealers are 1 percent but can be as high as 2.5 percent, I suspect the higher percent ranges are at the "we finance anybody" type places.

Loan officers at lenders are also compensated based on loans originated so there may not be that much of a spread between borrowing direct from a lender branch location and from a dealer, but that's just speculation on my part.

As has been stated elsewhere your best defense is to pre-qualify at several lenders so you go shopping armed with knowledge on what rate you already are qualified for.
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Old 12-20-2015, 09:45 PM   #18
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I don't care how, how much or if a dealer makes any money as long I get the lowest price possible by checking with several dealers, get the lowest possible interest rate, if financing, by checking several sources, including the dealer. I can get the mh serviced at most dealers. If I have a trade the bottom line is what matters I don't care how much they want for theirs or how much they say they're giving me, bottom line is what matters.
If you're going to sell it yourself you better get enough to pay the extra sales tax or you're losing money.
As far as money on investments it matters not how much you have in investments. All we're talking about is the money you use to pay cash. If you invest that money at 6-9% and pay 3-3.5 percent to finance you would be foolish to pay cash. Plus you can deduct the interest if you itemize. Bottom line it's your money and your choice.
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Old 12-21-2015, 08:04 AM   #19
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Whether or not the dealer is making money on the financing does not matter. What matters is if they can beat the rate you can find on your own. Go to your sources and find out what the best rate you can obtain is. Ask the dealer if they can beat it or match it. If they can beat it or match it, then it really doesn't matter if they are making money on the loan or not as they are saving you money and headache. It is always easier to have the dealer do it as they then handle the titling and perfection of the lien which can be a pain in some states. Do you really think for one minute the bank isn't making money on a loan they give you? Dealers have a whole bunch of pull with banks due to the sheer volume they do with their lenders. I have had several bank employees not be able to match dealer rates. In any case, abandoning a deal due to the sheer thought of the dealer making money, doesn't make sense. It is a rare occasion that a dealer does not make money on the sale of an rv or at a minimum the deal make sense to them. If they didn't make money, you would not have a place to purchase an rv or a used rv market to choose from.
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Old 12-21-2015, 08:18 AM   #20
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By the way, their is no "typical" markup of rates at your dealer. There is however what is called a flat rate. This is where the dealer provides the customer a rate at the same rate the bank gives them. It is known as the "buy rate". In this scenario, the bank pays the dealer a flat commission for passing along the same rate to the customer. Their are even cases where the dealer makes nothing, zero, nada on a loan. This is typical when the dealer obtains sub-prime loans for customers. The banks have enough risk in some of these scenarios so they want the loan written at their bank rate even though it may be higher. Although the dealer doesn't make a dime on these loans, they are eager to provide them as it allows them to sell a unit to a person that would not be able to purchase an rv without the dealers help. By doing your due diligence, your dealer can play a key role in providing a great purchase experience. Too often the dealer is vilified. A good deal is when both parties are satisfied with the transaction.
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Old 12-21-2015, 08:21 AM   #21
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Do buyers actually go to a seller - car, truck or RV without knowing local loan rates so they can negotiate? Or do they just take the finance person's 'best'? It sure sounds like they do from reading some of the posts. If I'm looking to spend 5-6 high number figures of dollars, I sure know how much it will cost me over a loan period - and if nothing else, equate those dollars to something I normally use.- fuel fills, rent, 6 packs of sudsy stuff, groceries, etc.
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Old 12-21-2015, 10:12 AM   #22
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For whatever reason I've found that shopping for my first RV in 2006 and then my second in 2012 that dealers had much better finance rates than what I was able to find over the internet (nationwide) by my self. Those two experiences differed greatly from the many new cars I have purchased usually using a credit union as the lending source. I don't know what it is about the RV industry and why the high interest rates in comparison to another luxury purchase like boats.
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Old 12-21-2015, 10:52 AM   #23
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I've had best rate, pre approved from Essex. Never found a dealer or consignment lot that would match it. Finance discussion comes a long time after the final price and services are finalized, and locked in....then ask about their finance rates. If you negotiated strong enough, they won't have room to play games with the financing.
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Old 12-23-2015, 09:47 AM   #24
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There are always those guys who want to "beat the system" at every turn. For them, it is only a good deal if:
  1. They bought below dealer cost;
  2. The bank paid them to take the loan, and...
  3. They sold their old unit for more than they paid for it originally (to the first person to look at it who, of course, had cash in their pocket)
More power to them. I just want a fair deal where I feel I got my money's worth and both the seller and I are happy. No, I don't like giving money away, but I also recognize that without a profit, the seller (any business) won't be around very long.

As far as selling my vehicle (RV, car, etc.) myself rather than trading it in, well that is choice. I choose not to tie up my personal schedule by being available for a potential buyer or having strange people come to my home. I'll take a monetary hit for that convenience.
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Old 12-23-2015, 10:53 PM   #25
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Quote:
Originally Posted by AggieDad View Post
There are always those guys who want to "beat the system" at every turn. For them, it is only a good deal if:
  1. They bought below dealer cost;
  2. The bank paid them to take the loan, and...
  3. They sold their old unit for more than they paid for it originally (to the first person to look at it who, of course, had cash in their pocket)

More power to them. I just want a fair deal where I feel I got my money's worth and both the seller and I are happy. No, I don't like giving money away, but I also recognize that without a profit, the seller (any business) won't be around very long.



As far as selling my vehicle (RV, car, etc.) myself rather than trading it in, well that is choice. I choose not to tie up my personal schedule by being available for a potential buyer or having strange people come to my home. I'll take a monetary hit for that convenience.

Ditto!
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Old 12-23-2015, 10:54 PM   #26
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The dealer's F&I department is definitely a profit making department. But RV (and auto) dealers run so much smoother and sell so many more RV's (and autos) when they have a finance professional selling retail paper to finance sources.

Be aware that you're not borrowing $ from a bank. You're borrowing $ from the dealer, and they're selling that retail contract to a bank or finance company at a discounted rate. The dealer keeps the $ generated above the "discount rate." A dealer's discount rate is often lower at a dealership that sells substantial #'s of retail contracts and rates are lower when a dealership's retail customers perform well--fewer past dues and repossessions.

I never tell a salesman or anyone at a dealership that I'm getting the money elsewhere (or paying cash) as sales managers are less likely to give you a good retail price if there's no chance of a "back end" profit.

The F&I man is also going to attempt to sell you paint sealants, credit life insurance AND extended service plans--where the big, big profits are generated.

I deal with a credit union, but their rates on RV's and boats are not nearly as low as on new cars. First, they take a bunch of repossessions and second, they take large losses because they're not very good at liquidating those repossessions. This is typical across the RV industry, as the prices on hard to sell "luxury" items are not as high as pickup trucks and automobiles that can be sent through an auto auction.

And yes, I'm a full trained F&I man with 36 years' experience before retiring young.
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Old 12-24-2015, 07:03 AM   #27
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Quote:
Originally Posted by AggieDad View Post
There are always those guys who want to "beat the system" at every turn. For them, it is only a good deal if:
.
So, they make money on the new until they sell me, they make my on my trade in, they make money on the warranty they sell me because I will buy it, they will make money on the hitch install for me...is it wrong to want to get a break on the interest rate?

I have over paid too many times in my life. At this point I don't need a new RV, I have one that works just fine. If there is any point of a deal that I think I am over paying, I can either negotiate or walk. A full percent or more interest markup can add up to a lot over the life of the loan.

I just bought my truck, and when I told the finance guy that my payment was going to be more than I was wanting...he simply lowered the interest rate to get me where I wanted to be. I am quite certain they still made money.
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Old 12-24-2015, 08:24 AM   #28
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When I purchased my currant RV in 2012 I went in with a figure that I wanted on my trade in. I tried to be very objective on its value. I also shopped both local banks and over the internet for private RV finance rates. I also had this in mind going to the local dealer. All that was left was to dicker price on the 2011 Georgetown we were interested in. Dealer gave me the list, I countered with what I thought the rig was worth (18K less), I went up 2K, they came down 16K, we agreed on the price of the GT. Next, told them what I thought was reasonable for my trade, they agreed! no dickering there, finally I had my payments sorta figured out based on interest rates I thought they could do, I was looking for under 5%, and they came in with 4.5%. Deal! Yes the finance lady hammered my DW and me over extended service plans and such but we held our ground and landed up getting a one year old rig with 4000 miles on it for less that 8-10 year old rigs with triple or more miles. Dealer made money (they sold our trade-in in 3 days because we left it spotless and they thanked us for trading it in so thoroughly clean) and we were satisfied with the deal. In retrospect I could think that I under valued my trade-in but I thought the price was fair and I didn't want to haggle over it and the new rig.
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