TrailManor Owner's Forum  

Go Back   TrailManor Owner's Forum > TrailManor Owners Community > Prospective Owner Questions
Register FAQ Members List Calendar Mark Forums Read

Reply
 
Thread Tools Display Modes
Old 03-09-2010, 07:10 PM   #1
Kevin Krause
Guest
 
Posts: n/a
Unhappy Financing Troubles

I am just beginning to search for financing to purchase a 2003 TM 2720. I contacted an RV financing firm (name withheld for now) to try to get some money to close the deal. I provided them with information about the trailer including non-standard options. I received an email today saying the trailer is worth $5,200. My research indicates it is worth much more than that and the seller is asking over twice as much.

Two theories: TMs are more expensive initially and in resale because of the lightweight construction methods and towability. All my research indicates they hold their value very well. I think the company lacks information on TMs so they are using an industry standard, which results in way undervaluing used TMs. I expect this situation will repeat itself.

The second theory has to do with the ongoing credit crisis. Banks are worried about getting into bad deals, so they intentially undervalue the collateral and loan out less money so less is at risk. That makes only those really qualified able to close the deal, ideally those that can put down 50% or more.

All theories aside, what do I do now? I will keep pursuing options, but I expect this may become a trend due to one or both theories above. Does anyone know any financing options that would be actually aware of the value of used Trailmanors? I have previously visited the closest TM dealer (about and hour and a half away), and I may contact them to see if they will help me finance my purchase. Any other ideas?
  Reply With Quote
Old 03-09-2010, 07:37 PM   #2
Bill
Site Team
 
Bill's Avatar
 
Join Date: Feb 2003
Location: The mountains of Scottsdale, AZ, and the beaches of Maine
Posts: 9,492
Default

It appears they are using something like NADAguides.com, where a 2003 2720 with no options is listed as having a "low retail" value of $5210. The value will be higher, of course, with some options, although only the air conditioner contributes very much to the bottom line, bringing the value up to $5530. Why they chose "low retail" as opposed to "average retail" is anybody's guess, except to say that as an RV financing company, they have undoubtedly been badly burned by the recent partial collapse of the industry.

On the other hand, if you are looking at $10K as a value, you may be thinking too high.

Bill
__________________
2020 2720QS (aka 2720SL)
2014 Ford F-150 4WD 5.0L
Bill's Tech Stuff album
Bill is offline   Reply With Quote
Old 03-10-2010, 05:31 AM   #3
brulaz
Guest
 
Posts: n/a
Default

Kevin,

It's been our experience that the best and cheapest way to finance anything other than your house is through a mortgage backed line-of-credit. This assumes you have some equity in your house, iow that you've paid of a chunk of it. Using this as equity, the bank gives you a line-of-credit that you can tap into at any time. They give you their best rate, because if you don't pay it off, they can take your house! You can use the $$ for anything.

But this is in Canada. I understand the situation in the states is quite different.
  Reply With Quote
Old 03-10-2010, 09:59 AM   #4
camp2canoe
Guest
 
Posts: n/a
Default

A mortgage backed line of credit is a good option IF you have the discipline not to use it as a put and take account. I had one for several years but paid it off and closed it when I found myself using it to pay my American Express account at the end of months when I was a little short.

Another option is to see what kind of financing the dealer can come up with. Despite having excellent credit ratings, my wife and I have been able to get much better interest rates working through the dealers on our last vehicle purchases than through our local bank. Dealers have a vested interest in trying to find affordable financing to facilitate sales.

As a lawyer for the last 33 years I need to point out that it is a good idea to check with a bank first so you know if the interest rate offered through a dealer really is a good deal. And never, ever, respond to an inquiry as to how high of a monthly payment you can make. I've had clients come in with buyer's remorse where they entered into a finance contract with low monthly payments but high a interest rate spread over additional payments. - [email protected]
  Reply With Quote
Old 03-10-2010, 03:54 PM   #5
brulaz
Guest
 
Posts: n/a
Default

It is true that car dealers will sometimes give you good rates to help sell their vehicles. And when available, go for it.

And I agree about the need for discipline with mortgage-backed loans. Because of the good rates, flexibility and ease of borrowing, you can over-borrow. You need a plan to pay it back.
  Reply With Quote
Old 03-12-2010, 02:37 PM   #6
rvmi312
Guest
 
Posts: n/a
Default

It appears to me that most dealers and private sellers are starting with high book on the NADA Guides and then checking every box in the list even though, as previously stated, this items are standard equipment and reflected in the price. I agree, only add air, awning, stuff like that the Factory lists as cost added options. That gives them a price that is way too high. If you can't get a bank or credit union to finance the unit with 20% down the the price being asked is way to high. BE CAREFUL! Like all things, TM's do depreciate and people asking what you see on oodle.com and places like that are generally off base; a lot!

I am running into the same thing. I want to buy a 3124 used and many of these folks are within a couple of thousand of what my 2 closest dealers will sell my a new one for. (about 20-25% off list by the way)

Jim in Mich
(and still lookin')
  Reply With Quote
Old 03-12-2010, 03:00 PM   #7
Kevin Krause
Guest
 
Posts: n/a
Default Keep the ideas coming

If you have any other ideas I am still interested.

I agree Jim in Mich. One of the loan officers I was working with confirmed that if an item is standard (ie furnace) DO NOT check it off. If it is a legit option like Air Conditioning then check it off.

I have a different theory on what sellers are doing for pricing. They want to pay off their loans and the camper has depreciated faster than the decrease in their loan balance. I think that may be where many people are at.

It still looks to me like one and possibly one other bank that I have contacted are using the low NADA or their own guide that looks like a low NADA. I mentioned before the bank said $5,200, well the average NADA is $7,000. Until I actually see the TM, and I believe it is worth seeing, I do not know how much I will offer.

These things being said, there are still things of value that are used to deal that NADA doesn't account for, like someone being willing to drive to meet you, or including a weight distributing hitch or brake controller as part of the transaction. Of course I understand that a bank is not going to lend you money for those things either. But they certainly can make a deal more worth while.

I will be investigating the home equity option next week, but I am not hopeful given the decline in property values in the State of Michigan. I could also go to the "Bank of Dad", but I do not think that I will. If I can't swing a deal on my own, even though that seems strange, I will start a fund and try in the fall or next spring. I might even order it new next year.
  Reply With Quote
Old 03-12-2010, 03:13 PM   #8
brulaz
Guest
 
Posts: n/a
Default

Quote:
Originally Posted by Kevin Krause View Post
I could also go to the "Bank of Dad", but I do not think that I will. If I can't swing a deal on my own, even though that seems strange, I will start a fund and try in the fall or next spring. I might even order it new next year.
I think you've got your priorities right. Bottom line, RV's are a luxury item. No need to get in over your head.

"Bank of Dad" is good. We offer our kids good rates (based on our mortgage backed line of credit which they don't have) but only for school and other important stuff. The rest of it they can do on their own.
  Reply With Quote
Old 03-13-2010, 08:13 PM   #9
RogerR
Guest
 
Posts: n/a
Default

You might try a different tack in looking to local credit unions. Most these days will accept anyone and give very good rates as long as you pay by direct deposit.

Another thing to do is go in with the NADA printout and try to negotiate the price down.
  Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump


All times are GMT -6. The time now is 04:51 AM.


Powered by vBulletin® Version 3.8.11
Copyright ©2000 - 2022, vBulletin Solutions Inc.
Copyright 2021 Trailmanor Owners Page.