RV Wholesaler Financing Discount Legit?

[BostonRVer]

I am currently in talks with RVW, and when they gave me a quote they mentioned the finance discount and also wrote this in the email:

"The only thing that needs to go on top of this price is your state tax. Let me explain the financing discount. There is no catch. We use all major banks and will be able to get you a great rate and term like anywhere else in the country. What we are doing is giving you our back end money we get from the bank. Now if you were planning on paying cash what all the cash buyers will do is finance the unit to get the discount. On your first payment you will pay everything off except for the next 11 payments. Then you just make your payment for the next 11 months and the unit is paid off. This big lump sum you are paying on your first payment goes directly towards the principle so you only pay $100-$150 in interest. All you have to do is hold the loan for one year before you pay off the loan. This is a simple interest loan and any interest paid WILL be tax deductible as well. I hope this helps you understand if not just let me know and I will call you so we can go over everything in full detail and answer all your questions. Thanks!"

doesn't seem bad, anyone ever do this? Is it legit?

[JWood422]

Interesting. Im looking forward to seeing what others say.

[SlowrideHD]

The Ford dealership where I bought my truck had a similar offer. I think I had to finance at least 10% of the purchase price and make at least three payments over a 90 day period. So I bought the truck, made the first payment, leaving $200 for the balance. Made two more payments of $100 each.
Done.

[Gumpster808]

Yes, they make money on writing the loan. Normally there is a period the loan has to stay before payoff. Varies between banks etc.

If you don’t keep the loan as long as the requirement then there is a pre-payment penalty.

It is a pretty standard thing when getting discounts to take the loan out. They make up the difference in the interest you have to pay keeping it the minimum of the required time.

Not sure about the tax deductible portion. I know we couldn’t claim ours with all the changes they made last year to the tax laws.

[CHICKDOE]

my only comment is about the statement that the 'interest WILL be tax deductable'. this is true only if you use itemized deductions. if you use the newly increased standard deductions this is not true! also, even if you itemize this is not true for towed vehicles as the new tax law limited the 2nd home interest deduction of motorized vehicles only.

[formerFR]

agreed, any 'comment' about whether some tax is 'deductible' is NOT for a dealer to decide, that's only something that YOU, the tax payer, can figure out WHEN you do your taxes... which is usually too late in finding out that this 'tax deduction' really made NO DIFFERENCE in your taxes!

as for the 'lump sum' payment up-front, and 11 months of 'payments'... that's just a way for the dealership to actually KEEP the 'discount' or 'rebate' from the loan provider, as the loan HAS to be in place for a certain number of months, otherwise they LOSE that amount of discount.

Of course, you could always just pay the BALANCE of the loan at the next month, in which case no matter whether the dealership gets their money or not, YOU are now out of the equation, and the dealer has NO RECOURSE over you. (they really just hope that you make the planned payments, but there's really nothing they can actually do if you don't)

Loan providers have been making these rebates to dealerships of all types for many, many years, but more recently, as owners started just 'paying off their loans early', the loan providers would then not receive the interest they expected, and now require this 'time' elements, and number of 'interest assessed payments', in order to preserve the very rebate they paid the dealer.

It's all a way to simply give the dealer a 'reason' to have RV buyers to FINANCE their RV, rather than paying cash, or getting a loan from their local bank, etc. It's simply a sales tool for the loan company, using the Dealer as their 'salesperson', but which is also why a dealer's 'financing' is not always your best bet - check around and compare, first.

[BostonRVer]

Awesome thanks

[formerFR]

it's amazing that while most of us would think that someone paying CASH would get their attention and get the best 'price' for an RV.... it's actually not the case - the dealer doesn't get the 'rebate' from the loan provider, and sometimes have a MUCH harder time 'upselling' various 'add ons' and 'extended warranties', which they also make big profits on, since the customer has to pay the FULL PRICE, right then and there - it's not 'financed' into the monthly payment where it might look a lot 'smaller' of a difference!

[frank4711]

When I bought my new Ram had to finance some to get all of the incentives ... when I got my first payment due called for payoff done. I think RVW discount is substantial maybe $3000??

[Cowracer]

My local dealer gave me the same kind of deal on financing. Use our financing and get a sizeable discount.

After careful considerations and weighing the total dollar impact, it turned out to be a good deal. The APR was 0.1% higher than I could have gotten from my credit union, but the discount more than offset what that 0.1% cost us over the life of the loan.

Tim

On edit. I also did the "take the loan and pay it off right away" when I bought my Side-by-Side. I was going to pay cash. Saved nearly $1200 by taking the loan, then paying it off on the first payment. There was no one-year minimum on that deal.

[madsledet]

Originally Posted by BostonRVer

I am currently in talks with RVW, and when they gave me a quote they mentioned the finance discount and also wrote this in the email:

"The only thing that needs to go on top of this price is your state tax. Let me explain the financing discount. There is no catch. We use all major banks and will be able to get you a great rate and term like anywhere else in the country. What we are doing is giving you our back end money we get from the bank. Now if you were planning on paying cash what all the cash buyers will do is finance the unit to get the discount. On your first payment you will pay everything off except for the next 11 payments. Then you just make your payment for the next 11 months and the unit is paid off. This big lump sum you are paying on your first payment goes directly towards the principle so you only pay $100-$150 in interest. All you have to do is hold the loan for one year before you pay off the loan. This is a simple interest loan and any interest paid WILL be tax deductible as well. I hope this helps you understand if not just let me know and I will call you so we can go over everything in full detail and answer all your questions. Thanks!"

doesn't seem bad, anyone ever do this? Is it legit?

Yes, yes, yes. It happens just like they say it does.

[KayleysMom]

Originally Posted by formerFR

Of course, you could always just pay the BALANCE of the loan at the next month, in which case no matter whether the dealership gets their money or not, YOU are now out of the equation, and the dealer has NO RECOURSE over you. (they really just hope that you make the planned payments, but there's really nothing they can actually do if you don't).

We bought through RVW in January 2017 and received an additional $4000 discount for financing through them. We were cautious also. We were a cash buyer but we did exactly what the original poster was told to do: On our first payment we paid everything except for 12 payments. (Just to be on the safe side.) Then we made our regular payments for the next 12 months and the unit was paid off. We only paid $200 in interest but saved the $4,000. In reference to the quote above, if I recall correctly we did have to sign a form stating that if we did not keep the loan for at least 1 year that we would repay the $4,000.


This worked well for us and saved us $3,800.

[JoePa77]

This is how I purchased my RV from RVWHOLESALERS. They did exactly what they said, you sign an agreement and they run your credit card for the rebate that they will charge if you payoff before the twelve months.
Also, let.me weigh in on the other topic, even though everyone will think I’m wrong (this site is truly very critical over little things). The interest is totally tax deductible no matter if you was use it or not. You must use a schedule A and (for this example-married and filing jointly) have $24,000 in total deductions to file and enjoy the benefits of the “mortgage” interest. [fire away].

[Oops]

We had the same reservation when we took the 4K deal from RVW. There was a stiff penalty for early payment that you sign. We paid the lions share the 1st payment and basically minimums since then. The bank it’s thru has told us many times that we can pay off anytime with no penalty but that’s not what RVW said so we have just been cautious and making the payment. We will pay off the last this month so technically we drug it to 13 months just to make sure. But what little interest we have paid has made the deal well worth it....
And by the way we had a panel crack and a couple little warranty issues. I didn’t want to drive it back for repair or anywhere for that matter and wait so RVW simply shipped me everything I needed for the repairs - quick and easy they took good care us. Very pleased with them!
Enjoy the new RV!

[Momma Tac]

Yes, what folks have said is true. We bought our fifth trailer from RVW in April and took discount and paid off all but 13 months in first payment.

[smgelsie]

We bought our Rockwood Windjammer from RVW and took the discount, and did exactly what they suggested. Worked out perfectly!

[Steeljag]

Originally Posted by KayleysMom

We bought through RVW in January 2017 and received an additional $4000 discount for financing through them. We were cautious also. We were a cash buyer but we did exactly what the original poster was told to do: On our first payment we paid everything except for 12 payments. (Just to be on the safe side.) Then we made our regular payments for the next 12 months and the unit was paid off. We only paid $200 in interest but saved the $4,000. In reference to the quote above, if I recall correctly we did have to sign a form stating that if we did not keep the loan for at least 1 year that we would repay the $4,000.


This worked well for us and saved us $3,800.

X 2

[Iwannacamp]

They told me a minimum of 12 payments before payoff.

[sgtlm17]

Like everyone is saying, RVW was upfront and honest with me. The loan will save you money. Plus the rate they got me was better than what I could get on my own. I never hesitate to recommend them to any buyer. It is run by two brothers and they couldn't be nicer and more helpful.
On a side note, I had a warranty issue and asked if they could send part and I would make the repair. Yup, had a new part at my door in seven days. Great dealership and I have dealt with many.

[k9jkfham]

RV dealers have 2 rates. 1 is a buy rate and the other is your rate. Most dealers pay the finance people from the difference between the 2 rates. One should always try and get the buy rate. Dealer will him and haw but they a different rates. Sounds rvw is being up front.