Community Forums

MSD81 · 12-19-2015, 07:49 PM

Are the finance people paid directly by the RV dealer or are they also on commission of the higher interest rate they charge over the banks quote?

Is there room to negotiate the interest rate knowing that the bank is a minimum 1% lower? That 1% adds up to several hundreds or even into the thousands of a long term loan.

Dutch Master · 12-19-2015, 08:03 PM

Good day MSD81 - Dealers look at any and all "profit centers." When I was shopping for my motorhome, I "shopped" for a low percentage rate loan. I also did a "pre-approval" for the amount I wanted to spend. The dealer I purchased my motorhome from was FLABBERGASTED at the low rate I got when he asked about "his financing" options. TOO BAD for the dealers, you have to watch out for yourself and not trust them. They will try to get over on you every step of the way.

UFO Pilot · 12-19-2015, 08:08 PM

I am always prepared to counter with my own pre approved finance rate. If the dealer can't match it then I will arrange my own financing. In most cases the dealer will match an "honest" interest rate.

vsheetz · 12-19-2015, 08:12 PM

Dealers can and do make money from financing. This usually adds to your cost of financing. Arrange your own best rate financing, then ask the dealer if they can beat it. Usually not, unless they have some manufacturer or other sourced incentive.

CWJK55 · 12-19-2015, 08:18 PM

For cars or our motorhome I always contact my local bank and get their rate. When I'm talking to the finance people at the dealer no matter where they start they've always wound up meeting the rate I brought in from the bank.

DDDonkey · 12-20-2015, 06:08 AM

When I got home from a deployment in 2012 I went to a dealer to buy a used car for 10-12K, when it came time to do the paperwork after we made the deal they were ticked. I told them I was going to pay cash and they said if I don't finance they don't make any money.

Gary RVRoamer · 12-20-2015, 08:43 AM

The dealer gets a commission on finance contracts. Whether the employee is on salary, commish, or some combination probably varies a lot, but I suspect at least some commission is common.

Of course you can negotiate the rate, or decline it altogether. Some dealers will kick back part of their finance commission as part of the "discount" on the deal, though they may not state it that way. They may also accept a reduced commission to help buy down the rate. What they might do (or not do) probably depends on their deal with the finance company and any current loan incentives the lender may offer.

I've had good results from dealer financing, but I always shop for rates myself ahead of time so that I know what is a "good rate" or not. I usually tell the finance person up front what rate I am looking for.

ArmandV · 12-20-2015, 08:49 AM

Quote:

Originally Posted by DDDonkey

When I got home from a deployment in 2012 I went to a dealer to buy a used car for 10-12K, when it came time to do the paperwork after we made the deal they were ticked. I told them I was going to pay cash and they said if I don't finance they don't make any money.

That's interesting. I paid cash for my new RV. The dealer knew ahead of time I was going to. I wonder if it works the same way for RVs. They didn't utter a peep about not making any money by me not financing.

loisjop · 12-20-2015, 08:54 AM

It's hard to justify paying cash when interest was in the low 3's, when/if you can double or triple that in investments.

DSL417 · 12-20-2015, 08:59 AM

Have to agree with Noel...also, that dealer finance person shopped my credit and got in the 3.5% range. I don't know what their commission is, but the rate is at or less than similar home loans. You go to your bank and get an RV loan...tell them you want 3.5%. When they stop laughing, my guess is you won't see a rate lower than 6-7% after making at least a 30% down payment. JMHO

ArmandV · 12-20-2015, 09:38 AM

Quote:

Originally Posted by loisjop

It's hard to justify paying cash when interest was in the low 3's, when/if you can double or triple that in investments.

Who says that those of us who paid cash don't already have investments? And, those of us who paid cash saved a "ton of money" with great deals, which would be eaten away by finance charges and interest over the long haul. I saved over $20K off MSRP.

Pigman1 · 12-20-2015, 10:03 AM

In any major purchase like an RV or even a car, there are three separate deals to be negotiated. First is the price of the unit. PERIOD. Nothing else... Who'll give you the best price. Second is what you get for your trade... Again, can you get more elsewhere with a private sale, an auction or some other means. And third is the price of your money. Do you have enough to pay cash and forgo the the funds you could have earned on that money elsewhere. What's the bank offering and what's the dealer offering.

Many people get all wrapped up when the dealer tries to combine two or all three of these deals and things rapidly get foggy and confused as to what you're really paying. That's why he does it. A confused buyer is to his advantage. If getting it all at one place is worth the extra money you'll pay to have that type of a deal, go for it, but the smart buyer does his homework before the sale and and keeps all the three negotiations separate. You'll notice then that you're dealing with three separate people at the dealership. Three separate dealer profit centers all trying to pry as much out of you as you'll give. Just be smart.

DSL417 · 12-20-2015, 06:42 PM

Quote:

Originally Posted by ArmandV

Who says that those of us who paid cash don't already have investments? And, those of us who paid cash saved a "ton of money" with great deals, which would be eaten away by finance charges and interest over the long haul. I saved over $20K off MSRP.

Yep...and while I don't know specifically, my guess is, owning similar and financing that Noel saved somewhere North of $160K off MSRP. Don't know what minnie Winnie's sell for, but my bet is the % off MSRP (which is silly numbers anyway) was similar.

IC2 · 12-20-2015, 07:39 PM

The way I have done it for years with cars, trucks and now RVs is to get the signed 'deal' on paper which of course I generally dicker with the salesman for the final price. Then always comes the spiel from the finance person on how good they will make me feel with their super special rate. Yeah, sure it is!!!! NOT. The next step is mine and it's where I tell the stealership that I will be arriving for delivery with check(s) from my bank. Last year we purchased our new 5er. I brought two checks from two credit union accounts, neither of which indicated that I was borrowing any money. While I didn't borrow very much, the rate was 4% less then the dealer's 'very best'. That's more a few bucks savings even with the small amount borrowed. I honestly don't care how they make their profit on a sale - I can assure you that it wont be via a loan company fee back to the dealer.