When an RV manufacturer determines the MSRP there is a built in margin that allows the RV
Learn to Negotiate
I mentioned negotiating the price a moment ago. When you find the perfect RV be prepared to sit down and talk price. This part of the sales process is referred to as the closing. There are several factors that will determine how you will negotiate the selling price of the RV.
The Manufacturer Suggested Retail Price (MSRP) if it's a new RV, the asking price if it's a used RV, if there is a trade-in involved or if it's a cash deal (no trade), just to name a few. There are different ways to negotiate the price too, but the bottom line is to know in your mind that you negotiated down to the lowest acceptable price the dealer is willing to take for the unit.
When an RV manufacturer determines the MSRP there is a built in margin that allows the RV dealer some flexibility to negotiate a deal when there is a trade-in involved.
On the other hand, if you don't have a trade-in there is a substantial amount that can be negotiated off of the MSRP. How much the MSRP is inflated is the big question. It's really difficult to say because different manufacturers use different methods to set the MSRP. They want to be competitive with other manufacturer pricing on like products, but at the same time offer their RV dealer network the best pricing possible for negotiating all types of buying scenarios.
RV's are built to meet different needs and different price levels. This means that the margin built into the MSRP will vary depending on the type of RV, and if it's an entry level, mid-line or high end model. If you're not trading something in you could expect to save 10 to 15 percent off of MSRP for less expensive RV's like pop-ups and entry-level units. On more expensive RV's and high-end units you could expect to save 15 to 20 percent off of MSRP. This is by no means set in stone, but in most cases it will result in a fair deal for both you and the RV dealer.
For the most part financing an RV is more stringent and requires better credit than purcha
The Art of Financing
There has always been controversy about financing RV's over long periods of time. The term of an RV loan is based on the dollar amount financed and the age of the RV. RV specialty lending banks offer these longer terms to make buying an RV more attractive. It's not uncommon to see terms exceeding 120, 180 and 200 months.
The advantage to a long term RV loan is you get a lower monthly payment. One could argue that a lower monthly payment allows more funds to actually get out and use the RV more often.
Financing $100,000 for 240 months at 7 percent interest would be $775 a month. The same loan for 120 months would be $1,161 a month. You save almost $400 a month. But keep in mind you will have little or no equity if you try to trade within the first several years.
There are several things you need to consider when you determine what the best loan term would be for you:
Your relationship with the RV dealership can be the difference between an enjoyable or mis
* How much can you afford to pay every month without getting in a bind? The term of the loan directly affects the monthly payment.
* How long do you plan to keep the RV? If you only plan to keep it for 3 or 4 years you won't be paying all of the interest anyway. The downside to this is you won't have any equity built up in it either.
* If you plan to refinance the loan, or pay the loan off before the full term, a longer-term loan would probably make more sense.
* If you plan to keep the RV for the life of the loan a shorter-term loan might be better for you. Make sure you can handle the higher monthly payments and the more you can put down initially the better.
One other advantage to a long term RV loan is that the interest paid is tax deductible (in the USA) as a second home, on many types of RV's. A fully self- contained RV is considered a 2nd home and all of the interest paid is deductible, if you are not already deducting the interest on a 2nd home.
At the time of this writing an RV is considered a qualified residence if it is one of the two residences chosen by the taxpayer for purposes of deductibility in the tax year as long as it provides basic living accommodations, meaning it has cooking, sleeping and bathroom facilities with fresh water and waste water holding tanks.
Talk to your tax advisor about what is required to write the interest off on your RV. You need to determine what term will work best for you, based on your individual needs, when you are financing your RV.
Hopefully through planning and preparation and by following some of these steps to survive the RV buying process you are victorious in all aspects of buying your RV. The only thing left to do is load the RV, and your family up, and go enjoy your new RV.
(Editor's Note: Mark Polk is an author and video producer specializing in the RV industry. You'll find more about Mark by visiting www.rveducation101.com)