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Old 12-24-2015, 09:59 AM   #29
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I say again, as others have said...go to your bank and tell them you want a loan for an RV for a quarter of a million and you want a 3.5% interest rate...the only question is whether they are polite after they laugh the they tell you no...they can't go quite that low. I'd expect the same rate as they get on motorcycles...6-9% if they will loan you the money. Of course, the CU is member owned, so if you get a loan at that rate, you can feel good that you have financed a part of their next new building and everyone's free checking account.
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Old 12-26-2015, 08:21 AM   #30
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Originally Posted by Bamaman View Post
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.


"Be aware that you're not borrowing $ from a bank. You're borrowing $ from the dealer"....... This is simply not true, the dealer is only acting as an agent for the bank. In no way shape or form is a customer of a dealership borrowing from the dealer. The contract is between the bank and the customer and the dealer is the agent that performs the execution of the contract. Im sure you've read dealer agreements between lending sources and the dealer. Yes it is true that the dealer can make the markup between the buy rate from the bank and what the dealer sells the banks money to the customer for. The finance department is certainly a very important profit center for the dealership but it does not act as the lender. Also, looking at the latest statistics and speaking with a rep from B of A, rv lending has a much lower loss ratio compared to the automotive end. Lending guidelines for RV's are stricter and the banks typically put themselves in better equity positions. Gone are the days of easy rv loans. Its very typical to get an automotive customer with a 620 credit score a loan from a prime lender while an rv customer with a 720 score may still have problems procuring an rv loan. The banks biggest risk with RV lending is that a lot can happen to a customer over a 20 year span as opposed to 5 or 6 years with an auto loan.
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Old 12-26-2015, 10:43 AM   #31
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If I owned a "stick and brick" I'd expect a loan (over $150k borrowed) at around 3.5%, as of today. Less of a loan, maybe 4%.

I don't own a home and in spite of our substantial IRA account and a credit score of 824, Bank of the West blew us off. Their fully owned subsidiary, Essex, offered us a loan at 4.64%. As I won't be taking delivery before May 2016, however, we could not lock that in (I'll be back out in the money market sometime in March).

Bottom line, if your RV is also your full time "primary residence", as Bank of the West put it, securing a loan at a competitive rate will be a challenge. Otherwise, with good credit and some equity going in (trade value or cash down) I wouldn't expect anything higher than 5% today, less as the loan amount goes up.
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Old 12-26-2015, 11:14 PM   #32
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I think it all depends on the dealer. I was pleasantly surprised when we purchased our coach last year. I researched interest rates prior to the whole financing conversation with our dealer ... and was shocked when my dealer came back with a rate that was only a 1/4 point higher than a fixed rate mortgage of similar duration was at the time. Clearly, they knew what banks were looking to be competitive in the RV market at that time - and made the link. You need to know what the going rates are before you start doing the "dollar dance" with your dealer - but definitely keep an open mind! Your dealer might surprise you!
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Old 12-26-2015, 11:29 PM   #33
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Why pay cash if you make more on it than you pay in interest? That's what we're doing on the Magna.
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