Financing - Buy rate

[Brian W]

Originally Posted by micbob4

Gotcha, so your saying best rate starts at 760 not 740? Are they using FICO Auto or Regular FICO score we all see. I do know some of the agencies show your FICO 8 score and then another FICO score for auto. Interesting, so many different scoring systems. Thanks!

Best rate starts at 760.

We only pull the scores from individual agencies based on lenders criteria. We typically do not run all three. I believe the current version is FICO 9.

[micbob4]

Originally Posted by Brian W

Best rate starts at 760.

We only pull the scores from individual agencies based on lenders criteria. We typically do not run all three. I believe the current version is FICO 9.

Oh, so FICO 9 not FICO 8? When you say do not run all three, your using one reporting agency? This finance person did say that based on where you live determines what reporting agency they use. Meaning each state has an assigned agency. She said in NJ Experian was the one that would be used. In Virginia for example it maybe Trans Union. Not sure how true this is.

[Brian W]

Originally Posted by micbob4

Oh, so FICO 9 not FICO 8? When you say do not run all three, your using one reporting agency? This finance person did say that based on where you live determines what reporting agency they use. Meaning each state has an assigned agency. She said in NJ Experian was the one that would be used. In Virginia for example it maybe Trans Union. Not sure how true this is.

According to my finance guy, different lenders rely on certain agencies more than others. The finance guys do this so much that they know which reports to pull based on the credit application. For example, when I financed my coach they used Equifax and Trans Union, but not Experian.

If you Google FICO 9 you can see the differences between 8 and 9. Lenders believe 9 gives a more accurate depiction of your financial responsibility.

[10 fan]

Great post. I hope to take delivery in June but will shop for the best rate when I get closer. I consider the dealer one of the sources.

[micbob4]

Originally Posted by Brian W

Disclaimer: I work at one of those evil RV dealerships.

So, you want the dealer to do all of the shopping for the loan, but not let them make any money for doing that? Believe it or not, it can be a very time consuming process, even for someone with good credit. The more expensive the rig, the more paperwork, and dealing with the lenders. It sounds like you have already seen this play out by the extra requirement of filling out a Liquidity Statement. We often see requirements of tax records, as well as other requirements.

If you are worried about the dealer ripping you off in financing, do what others have recommended and shop for your best rate. Shopping for a RV loan will not hurt your credit score if multiple reports are run by different lenders. The credit agencies typically give you 14 days of shopping rates as long as it is for an auto loan, rv, mortgage, etc. They have models built in that will only count the multiple reports as one credit check, as long as they are for the same type of loan.

In the end, let the best rate win. Does it really matter if the dealer makes money by arranging your financing IF they can meet or beat your best shopped rate?

Brian, since you have worked in industry. When looking at your FICO score do they use standard FICO 8 we see or the FICO 8 based on AUTO financing. I noticed the scores are different. Also, when shopping for rates wont the first one that pulls your scores cause a drop that will reflect in all the subsequent pulls from other lenders? Example: First lender pulls score and its say 770, due to the pull the next lender sees score reflecting hard inquiry and gets lets say 750? Thanks

[Larryg17]

Try them up to 20 years on a new motorhome and good rates!

[hohenwald48]

After reading this entire thread I have a couple of things I would like to point out. Not directed at any specific poster or situation. Just general thoughts.

#1 don't consider buying an RV with a home equity loan. In the event things get tough do you really want to risk the loss of your house because you can't make a few RV payments?

#2 if a bank won't loan you money you might want to reconsider what you're doing. The bank is in the business of loaning money and if they don't want you as a loan customer they just might know what they're talking about.

#3 if a point or two either way on the interest rate will determine if you buy an RV or not you might be cutting it kind of close.

[EZRider800]

Originally Posted by Mrs agasrcng

Well, I'm just passing along something that I learned from a Facebook group that I'm in. And actually, since I posted this early this morning, I went back to the group and reread through the group again and found where somebody posted that they had actually asked about the buy rate and the finance dude got really upset and refused to show the customer!
!

I've worked at truck dealerships all my life. It is a FACT that the dealership always tries to mark up your "Buy Rate" from the bank. If you ask to see the email from the bank it will probably piss off the Finance Manager but who cares? He is either caught in a lie about what he told you your rate was, or he's mad because you just killed any chance he had to make HIS COMMISSION. Yes, that's how he gets paid. The salesmen make commission on the "front end" of the deal (how much profit is made when they sell it) and the Finance Manager makes his money on the "back end" of the deal by bumping up the finance rate and selling you expensive extended warranty contracts, etc. etc.

Hope this helps.

[Mrs agasrcng]

Originally Posted by hohenwald48

After reading this entire thread I have a couple of things I would like to point out. Not directed at any specific poster or situation. Just general thoughts.



#1 don't consider buying an RV with a home equity loan. In the event things get tough do you really want to risk the loss of your house because you can't make a few RV payments?



#2 if a bank won't loan you money you might want to reconsider what you're doing. The bank is in the business of loaning money and if they don't want you as a loan customer they just might know what they're talking about.



#3 if a point or two either way on the interest rate will determine if you buy an RV or not you might be cutting it kind of close.

I agree with 1 of your 3 points. 1) I don't think you should risk losing your home for your RV loan.

I disagree with 2 & 3: Our bank would only loan the maximum of, I believe 7 year, the length of a car loan. With the price of the motorhome that we are purchasing, there is absolutely no way we could afford the payment. That doesn't mean we should reconsider what we're doing. I would think that a lot of folks would be in that same situation. Also, it doesn't mean they don't want us as a loan customer. It means they just don't do long term loans on RVs.

Your point #3 regarding a point or two on the interest rate as somebody commented, that could equal out to $10,000. I'm sorry, but to me, if a point saves me $10k, why wouldn't I take advantage of that savings? We work hard for our money and I'm going to do my best to save myself the most I can.

It seems to me that you are being rather judgmental simply because somebody wants to save themselves as much money as they possibly can. That doesn't mean they can't afford it.

[Mrs agasrcng]

Originally Posted by EZRider800

I've worked at truck dealerships all my life. It is a FACT that the dealership always tries to mark up your "Buy Rate" from the bank. If you ask to see the email from the bank it will probably piss off the Finance Manager but who cares? He is either caught in a lie about what he told you your rate was, or he's mad because you just killed any chance he had to make HIS COMMISSION. Yes, that's how he gets paid. The salesmen make commission on the "front end" of the deal (how much profit is made when they sell it) and the Finance Manager makes his money on the "back end" of the deal by bumping up the finance rate and selling you expensive extended warranty contracts, etc. etc.

Hope this helps.

I tend to agree with you. I've been off for awhile so I'm just now catching up on the comments, but I guess that makes me the bad guy for feeling this way according to some other comments. I'm already spending a lot of money by purchasing the coach. I'm assuming the finance guy is making a salary and his commission is just a bonus on top of that, right? Surely he isn't working on commission only?

And I'd like to know just how much work did he have to do to send our paperwork (application) to the lender? I think there were 3 total?

[Mrs agasrcng]

Originally Posted by Brian W

That is not YOUR rate. It’s the minimum the lender will accept the loan at. Each lender allows a certain percentage markup above that minimum rate as a way to compensate the dealer for finding them business.

So according to your FB group, the dealer should do all the work, but make no money for providing the service?

And no, “they” are not stealing from you. They are getting compensated for performing a service for both the lender, and the consumer. It is not illegal.

There’s been a few posts on here about how dealers found people lower rates than they could find themselves. For the life of me I can’t figure out how that’s a bad thing.

Please tell me just how much work does the finance guy do? He either faxes/scans & emails our credit application over to his lenders and the make a determination of whether or not they want to loan money or not. And in my case, as stated earlier regarding the financial statement, I only filled out a 1/4 of it and that was good enough for him, so there wasn't really any "paperwork" to be done.

Also, is the finance guy paid a salary? Or he paid straight commission? I mean, isn't he getting paid to do his JOB?? You know, the financing part of the deal??? So, I'm a little confused by what you mean when you say he's providing me a service. That's his JOB! So once the coach is built and we actually are ready to sign our paperwork, yes, he will actually have to do some paperwork, but again, that's what he gets PAID to do. He's not a concierge, he's a finance manager. And it's not my concern whether he gets a commission or not. It's my concern to try to get the lowest monthly payment I can get, especially when they told me they couldn't get it where I wanted it to be.

So, if the lender sends back a rate lower than what he's telling me, then that's the rate I want on my note.

[C2tuck]

I’d open my options to another bank or lender. I easily got a 10yr loan on less than 70k, and could have gone longer if I wanted to. Not sure why they will only go 7yrs on yours.

[Sicduc]

I purchased a New Rv back in Nov and was dealing with the finance dept at the dealership and was quoted 5.99% for a 20 year loan on a LLC which seemed a little high so I started shopping around and found a online broker that said he could get me 4.25% on the LLC loan so I went back to my dealer and spoke the my finance guy and he said that it was impossible to get a rate that low on a LLC so I told him no problem let me see what happens with this other guy... A week later my dealership offered me a loan 3.99% so I asked him how he got the rate down from 5.99% and he said there was a program from Bank Of The Ozarks for LLC's so I ended up using the dealership for the financing since I didn't have to jump though any hoops like I would have had to done with the broker I just went to the dealership and signed my papers and drove my new coach home without having to show any proof of income etc... Side not my credit score is 820+ my dealer also said if I did a covenantal loan I would be somewhere between 3.24%-3.5% for a 20year loan... Also remember finance guys work off the buy rates from the banks meaning if the bank is giving then there money @3% and you @ 4.5% there making 1.5% on the loan..

[EZRider800]

Originally Posted by Mrs agasrcng

I tend to agree with you. I've been off for awhile so I'm just now catching up on the comments, but I guess that makes me the bad guy for feeling this way according to some other comments. I'm already spending a lot of money by purchasing the coach. I'm assuming the finance guy is making a salary and his commission is just a bonus on top of that, right? Surely he isn't working on commission only?

And I'd like to know just how much work did he have to do to send our paperwork (application) to the lender? I think there were 3 total?

Don't feel sorry for the Finance Manager. Those guys get paid $200k plus if they are any good. I was the Commercial Truck Manager and sat between the two Finance Offices and I couldn't believe the crap I heard them telling customers!! I couldn't sleep at night if I did that to people.