You've just signed a purchase agreement with your local (or
not-so-local) RV dealer. You know the drill... your next stop,
will be the finance office. (aka: F&I)
Your salesman does the "hand-off", and suddenly you are faced
with a decision that seems simple, but can cost you many times
the profit made on the "front end" of your transaction; the
"back end", or Finance and Insurance office.
As I always try to convey to my clients: "The dealer is NOT the
enemy." In fact, he can be your best friend when your RV is in
need of service or repair. He has laid out literally MILLIONS of
dollars to allow you the opportunity to browse a good selection
of units. He has paid his dues, and continues to pay them on a
daily basis. Keep his... and your, best interests at heart when
deciding on your source of financing.
There is one hard and fast rule that applies to RV Dealer
provided financing. He must "pack" (inflate) the "buy rate"
(interest rate) on the financing he provides to his customers to
earn a profit on the transaction. Once again, he uses this
profit to pay overhead, commissions, etc.
1. Should you consider the benefits of financing through your RV
dealer? Yes.
2. Are you stuck with the financing and interest rate he quotes?
NO.
3. Should you consider alternative sources of financing?
Definitely!
Internet RV Financing - You WILL Save Money!
Most RV buyers are so frazzled by the time the finish the
negotiation to finalize the purchase of a new RV that they fold
under the pressure of the F&I office. This can be a costly
mistake.
Shopping for your best interest rate and terms can be just as
important as shopping for the right RV, and negotiating your
best price. In fact, you stand to save literally THOUSANDS of
dollars by simply lowering your interest rate by a quarter or
half of a percent.
Internet based RV finance companies normally use many of the
same lenders that RV dealers use. It's simply a matter of
overhead and the cost of doing business. Since the Internet
based companies generally have lower operating costs; they are
able to pass the savings on to you.
Most Internet RV finance sources have online rate quote forms
and loan applications which can be completed in a matter of
minutes. Normally, credit approval can be obtained the same day
you apply.
When you submit your online application, you should also be
prepared to send some additional documentation, which is
necessary for your approval.
Required Loan Approval Documents
If you are EMPLOYED (work for someone else), you will normally
be required to fax or email proof of income. This is usually a
recent pay stub and your last 2 year's W-2 forms. (For each
applicant)
If you are SELF-EMPLOYED, you will normally be required to send
your last 2 years tax returns and any attached schedules.
If you are RETIRED, you will need to provide documentation of
social security benefits, pensions, dividends or other sources
of income.
Once your loan is approved, your loan processor should help you
in obtaining additional documentation, such as:
1. A copy of your purchase agreement with the seller.
2. A copy of the title. (copy of the MSO on new units).
3. Proof of insurance listing the new lien holder as loss payee.
4. Copies of all the applicant(s) driver's licenses.
Most Internet based RV loans take from 4 to 6 business days to
complete. Information must be collected, and documents must be
sent by overnight mail for signatures, and then sent overnight
mail back to the lender or broker.
When arranging the purchase an RV, you should allow a week or
more for your scheduled delivery date. This should allow plenty
of time for rate shopping, loan approval and closing. When your
closing is completed, funds can be sent to the seller by
overnight mail, or simply wire transferred.
Which Type of Financing is Best?
You want an easy answer to the question posed in this article?
OK, I'll cut to the chase - It depends on what you're looking
for.
1. You want EASY? Let the dealer handle it.
2. You want the BEST RATE? Do a little work.
Sure you may have to do a little more work, but if you break
down your long-term savings into the actual time you have spent
researching and completing your RV loan - You could be making a
VERY short-lived hourly PAY RATE roughly equivalent to that of
Bill Gates.
Barry Wilder
President - Best Rate, Inc.
About the author:
Barry Wilder has been involved in various areas of the RV
business for over 25 years. He is currently the owner of Best
Rate Financial Services, providing loans and refinancing for
RVs, boats and aircraft. They also provide RV and Boat
Warranties.
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