Since my first RV adventure in a borrowed Shasta travel trailer, more than 30-years ago, I have owned five recreational vehicles: A used pop-up, two used travel trailers, a new Class C and most recently a new Class A motorhome. If it wasn't for a career in the military I'm sure there would have been more. Fortunately in each case I have managed to buy the RV, use it and re-sell it without losing any money.

I contribute this in part to being a savvy buyer, but more so due to my experience in the RV industry. It all started, as a teenager, washing RV's for a local dealership. Soon I worked my way into the service department as an apprentice RV technician. After my career as maintenance Warrant Officer in the Army I sold RV's and was eventually promoted sales and finance and then as an insurance manager.

Buying an RV is a major investment, similar to buying a house. Surviving the RV buying process requires preparation and planning. So what steps can you take to survive the RV buying process? Survive is the key word here:

S- Select the right RV for you
U- Understand your needs
R- Research all of your options
V- Validate the RV dealer's credentials
I- Insider buying knowledge
V- Victory
E- Enjoy your new RV

The first two steps to surviving the RV buying process go hand-in-hand. Before you can select the right RV you must understand your needs. If you plan to use the RV in the backwoods, off the beaten-trail, a pop up or truck camper would make more sense than a large Class A motorhome.

If there are six members in your family the sleeping arrangements and size of the RV are important considerations. If you want to travel the country and live full-time in a motorhome, a diesel model might be a better choice than a gasoline model.

Often times the RV consumer makes a hasty buying decision and soon discovers the RV is too small or too large, the wrong floorplan or the wrong type of RV altogether. After making a poor buying decision they trade the RV in with no equity, and are as the industry says, upside-down.

Upside-down is a term that means you owe more on the RV than it is worth. Once in this position it is difficult to get out. Keep in mind that RV's depreciate immediately after you make the purchase, the same as an automobile. To avoid the upside-down dilemma you should buy the right type of RV that meets your needs, and plan to keep it for several years.

Understanding which type of RV is right for you is a major step in surviving the RV buying process, but now it is time to be patient and do some research. Patience and research at this stage in the game can really pay off later.

Researching your options covers a broad spectrum. Should you rent before you buy? Should you buy new or used? What brand of RV should you buy? How is the RV constructed? What kind of warranty does the manufacturer offer? These are just a few considerations.

Rent First, Then Buy
I usually recommend renting an RV and taking a short trip if you're not sure the RV lifestyle is right for you. It can be very disappointing to purchase an RV only to discover you don't enjoy RVing.

Cost is a major factor concerning new versus used, but there are other factors too. If you're only going to use the RV two weeks out of the year a used RV might be the best decision. On the other hand if you are planning on going full-timing or traveling cross-country, a new RV with a full warranty would be a better choice.

RV manufacturers and brands can be confusing to say the least. There are several reasons for all of these different types and brands of RV's. One reason is there are lots of RV buyers with different tastes, different ideas about how to use an RV and different budgets. This is why researching all of your options is so important. It is your job to sort through all of these choices and figure out what type, manufacturer and brand of RV is right for you.

This takes us to validating the RV dealer's credentials. All this really means is to find an RV dealer that is reputable and will be there after the sale, to take care of you and your RV. A reputable RV dealer should have a professional sales, service and parts staff. A reputable dealer wants your business and wants you to return to them for future business.

Visit Dealerships
The first step in searching for a reputable dealership is to actually visit the dealer's physical location. If you purchase your RV at an RV show you might be surprised and/or disappointed at what you discover when you go to the dealership to pick the unit up.

Don't be afraid to ask for a personal tour of the dealership. Look at the service department. Do they have certified technicians? Do they have the capability and facilities to do routine maintenance and warranty work on the units they sell? Look at their parts and accessory (P&A) department. Do they offer a good selection of parts and accessories? Do they have a trained and professional sales staff? Do they have a good selection of RVs to choose from? How long have they been selling certain manufacturer brands? How long have they been in business? Your relationship with the RV dealership can be the difference between an enjoyable or miserable experience.

Get Smarter
Each of these steps is important to surviving the buying process, but perhaps the most important is to have some insider buying knowledge of the overall process.

For starters an RV is considered a luxury item not a necessity, like an automobile or home. Understanding how to buy an RV the smart way can assist you in avoiding some of the pitfalls that have recently affected many other RV consumers.

A large reason for the slumping housing market is due to sub-prime mortgage lenders loaning money to credit risks, resulting in foreclosures. Another reason for the downturn in the housing market is that for several years leading up to this housing slump homeowners were taking advantage of the rapidly appreciating home values by cashing in on their home equity.

It was easy money for major purchases like automobiles, RV's, paying for a vacation, college or paying off high interest credit cards. Some people borrowed to the point where they now owe more on their house than the house is worth.

A third factor is that over recent years people were buying their homes with little or no money down. According to the Mortgage Bankers Association, 13 percent of mortgages originated in 2005 and 2006 had down payments of less than 10 percent and another 1 percent of mortgages surpassed the value of the property the consumers purchased.

In contrast the amount of a down payment made on an RV purchase will directly affect the equity in the RV, based on depreciation immediately after the sale.

If you participate in a low-down or no-down payment program you will more than likely be upside-down when you leave the RV dealership. Low and no-down payment options also result in higher interest rates on the borrowed amount. Putting 15 percent or 20 percent down in cash or trade will keep the value of the RV in line with the amount you borrow, after factoring in the initial depreciation. And not using the equity in your home to purchase an RV leaves you in a much better financial position.

For the most part financing an RV is more stringent and requires better credit than purchasing items considered a necessity. This results in much lower default rates than what is happening in the housing market.

So how can you buy an RV the smart way? When a higher credit rating is required to secure a loan you are basically in control. Less risk to the lender equates to lower interest rates for the borrower. This is where some of the insider buying knowledge comes into play.

In many cases any money saved during the negotiating process of the sale can be lost during the financing process. RV lending banks offer RV dealerships competitive interest rates in an attempt to get the RV dealers loan business. The finance office will then offer you an interest rate in an attempt to get your business.

If they get a higher interest rate from you than the bank offered them, they get paid what is called participation. Interest rates are something you must compare before you sign a bank contract. Find out what the current interest rates are and if you have above average credit don't settle for higher rates. It will really pay to do your homework on interest rates before making the deal.

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.

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:

* 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.

Tax Advantages
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)

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