Excellent credit score doesn’t guarantee RV financing

[AbdRahim]

This is why we keep and use two credit cards for all of our purchases. We have no other debt; no mortgage, no car or RV payments or other installment loans, etc. and still manage to maintain a good credit score. I think the monthly credit card activity (we pay the balance off each month) may be the reason.

It is a sad commentary on our fiscal world that people who pay their bills on time and stay debt-free are frequently considered poor credit risks.

TJ

Apparently CC's don't count for much. They want recent big ticket history. Insane.

 

[TJ&LadyDi]

Apparently CC's don't count for much. They want recent big ticket history. Insane.

I guess that’s true. It is the reason why we simply pay cash for “big ticket items.” Nice to be in a position to do that.

TJ

 

[bpaikman]

Are you buying new or used? Used financing can be more challenging but new is typically easier. Maybe @Jireh Financial has some thoughts.

 

[bpaikman]

we only buy used.

 

[bpaikman]

I guess that’s true. It is the reason why we simply pay cash for “big ticket items.” Nice to be in a position to do that.

TJ

Yeah, nice. ?

 

[MapNerd]

we only buy used.

How used is used for you @bpaikman? If lightly used (2-3 years old, low mileage) and you can afford it in this market but can’t get financing for it, you might be able to afford new and get financing for it. The prices are pretty similar. Creditors prefer to finance new units simply because there is less risk they know you’re getting a new unit, and they can better predict the depreciation and loan to value. Used units are harder and riskier for them.

 

[bpaikman]

The motorhome we found was at a dealership and they checked with all their sources which might’ve been only in that state and they did say the only dealt with brick and mortar banks. I’m not sure about other sources. We don’t want an outfit that is going to be selling our loan to somebo, or variable interest stuff.

How used is used for you @bpaikman? If lightly used (2-3 years old, low mileage) and you can afford it in this market but can’t get financing for it, you might be able to afford new and get financing for it. The prices are pretty similar. Creditors prefer to finance new units simply because there is less risk they know you’re getting a new unit, and they can better predict the depreciation and loan to value. Used units are harder and riskier for them.

In the current market, for our requirements, I’ve not found anything newer than 2014. That’s approximately the same age as our first motorhome, snd we had no trouble securing financing for $80K. We were looking at financing $100,000.
HOWEVER, we were turned off by the financing turndown, and plan to save for a while longer. I’ll keep looking, and hoping that prices track downward somewhat to meet our savings, maybe by January.
We’re starting to discuss what else we could do with the funds: nicer home in a nicer area, travel to Europe, cruise to see the northern lights, train excursions….., but….. nothing appeals to us like traveling in a motorhome. A lot of work, upkeep, horrible investment financially, but there’s something about traveling in a self-contained cottage….eating our own cooking, sleeping on our own bed every night, a bathroom and fridge…

 

[bpaikman]

Even if I wanted to buy new, I’ve not found what I want in the newer models. Except maybe one certain brand ?.
Also, I’ve listened to many owners of new coaches and their issues on this forum, and it seems they have the same amount of problems we did with our 7-12 year old coach. We figured we were using the money saved in depreciation for upgrades and repair, and still pocketing quite a bit. The only thing we couldn’t get around was age - if a campground wanted to turn us away after our coach passed 10 years.
It still looked new - we kept it up, so we never were turned away.
And we sold it for about about $15K less than we paid, not bad in pre-covid years.
Repair wait time could be a problem these days, but then so could warranty work. We’re learning to do a lot of our own.

 

[Aa1ssradio]

Alliant Credit Union is also very good for financing . . . Had 2 different rigs financed with them with no issues what-so-ever. Our loan with them was approved within 1/2 hour.

 

[Jireh Financial]

Following a couple things here. Just for the record, we are not a lender. We do not approve or decline any loans. We work with several lenders who all have different taste for what type of buyer they want.
Part of the difference between financing new VS used if the ease in finding value. Terms and rates are calculated the same with all the lenders we use. With NEW, value is gathered either by MSRP (if available) and they lend a percentage below that, or from invoice (we gather those, not available to general buyers) and lend a percentage up from there. With USED, lenders need to use NADA and that takes a bit of work. Equipment differences do present some lenders with a challenge and knowledge of how NADA works. For used, we do the NADA work and submit to lenders as part of the application process.
When working with used, we ask for a copy of the listing so we can get an accurate view of the equipment.
Let us know how we can help.
Thank you,
Ken