HOW TO GET RV FINANCING - YouTube

good morning rv sales pros we are talking  today about how to get rv financing i guess  

i could say morning but it could be afternoon or  evening wherever you are as you watch this video  

joined in-house by an anonymous rv sales pro who's  still in the industry he won't name names because  

that might impact things hello hello what's up  man so today we're going to talk about financing  

that's a problem yeah so when you're selling an  rv because i know you're in the industry right now  

what have you noticed when it comes to  financing somebody says yes to the unit  

and then from your perspective as a salesperson  like what do you see happen from there like you  

turn it over to finance manager does that make  sense uh-huh i noticed that like a lot of the  

dealerships these days like to have the financing  done in-house because they get paid to do the  

financing so that could be a bargaining chip as  well you might be able to get a little bit of a  

discount you know on the unit for financing if you  go get your own financing they look at that the  

dealership looks at that as cash and so they don't  love that as much because they don't get paid  

so you could get the same exact loan through  the dealership as you could go get on your  

own sometimes even better because those those  dealerships have relationships with the bank  

and so if you let them do that sometimes  you can get a little bit of a better deal  

and then you don't have to worry about you know  the hassle and and not knowing what you don't know  

about lending yeah and let them go shop for you  if it's uh one thing i noticed too is is if you'll  

tell them to stick to maybe just a few lenders  so they don't do it like the car business where  

in the car business they'll shotgun your  credit out to 10 or 15 different uh lenders  

that could impact your your score so maybe  keep it to three to five something like that um  

and those inquiries will fall off at some point  the if you get an approval that one sticks because  

they then issue you credit at that point in time  yeah so when when they do that they do a hard  

pull they change the rules on that so as long as  it's under the same category it doesn't deem you  

like it used to when you pull your credit  and so um one thing that i've seen is that  

like you said we get paid reserve by the banks  so it's a percentage of the loan for writing  

the loan it doesn't change your terms on your  end and they uh the banks pay the dealership  

to write that loan sometimes as little as maybe  one percent to as high as eight percent of the  

loan depending on the bank that you're using with  credit unions you can't really negotiate the rate  

but with the national lenders you can and so if  you get into a us bank or bank of america that's  

a that's a place where you might even negotiate  the rate that you're getting um one of the things  

that people don't think about is they think oh  i'm gonna go get an rv loan like it's a car loan  

and it's gonna be easy i can go get pre-approved  and then take that pre-approval out and go and get  

whatever rv i want the challenge is that they  approve the rv as much as they approve you  

and so if you've got an rv that doesn't have  the value there so no invoice no msrp sheet  

the nada values or jd power values aren't  coming in then that rv you're going to have  

to have money down to finance it because the  bank's only going to lend so much on it and so  

it's really important that you land on the rv  first before before pursuing financing because  

those rates could change depending on the unit  you buy and how much you borrow definitely it's  

a it's a harder loan to get um more like buying  a house than buying a car and then inside of that  

too is that uh i've seen it multiple times where  customers come in and they've gone and bought  

their truck maybe weeks before a month or two  before and then they come in to to land on their  

dream coach their fifth wheel they're going to tow  and they can't get approved for the rv so now they  

bought this truck i highly recommend getting  an approval through the dealership for your rv  

then going out quickly getting an approval on  your car yeah and close closes on it that way so  

one of the things that you could do is you can  get your own financing like like you mentioned  

and go into a branch and have them pre-approve  you the dealers don't love that because they  

don't make as much money on you but that's one  way that you could do it the other is to go into  

the dealership you will need to qualify not only  with credit score i could tell you if you get if  

you start getting under 670 on your credit score  it gets really challenging to get you approved  

and so you start getting into higher interest  rates you're going to have to provide more  

documentation if you're a business owner then  you've got to provide at least two years of taxes  

and if you're one that writes off everything you  can really shoot yourself in the foot because  

you know you make the money but the bank on paper  is showing you that you make zero money so when it  

comes to debt to income ratios i've had people  that are 800 scorers that have the income but  

when it comes to their taxes improving income they  don't have anywhere near what they stated on the  

application the bank will shut them down exactly  also in far as far as payment if you're looking  

for longer payment loans which in the rv industry  typical is 10 12 15 and 20 year terms depending on  

on on the unit and then also dollar amounts  but inside of that as well there's credit score  

limitations as well so 15-year term has a certain  set credit i think it's what a 720 and then  

um up to a 780 on on 20-year terms and you just  you got to have a higher score to get approved  

with certain lenders yeah right now i mean the  highest scores are pushing eight seventy eight  

eighty somewhere in their eight ninety uh they  used to be eight fifty and above you were top tier  

credit now it's moving up um if you're under a  760 you'd be a tier two for most banks and that's  

going to bump your rate up if you're on an older  unit a used unit that's going to bump your rate up  

uh with some some banks not all banks do that but  for the age of the unit they're going to charge  

you more so you want to factor in about a percent  higher on those older units so i'm thinking  

you know anything older than 2017 2016 you wanted  to just start figuring about a half a percent more  

for your rate just to be safe payment buyers if  you're looking at terms uh if you're a up to a  

12-year term that's a max term you well that's  a term that you can do on most rv loans you're  

gonna spend about eleven dollars per thousand  that you borrow so if you borrow ten thousand  

dollars that would be an eleven hundred dollar  or a hundred ten dollar payment right roughly  

and so if you're if you're borrowing on the higher  end like 20 20 year or 15 year loans then your  

payment is going to come in right around nine  bucks per thousand with a top-tier credit score  

if your credit score is lower you're going to see  that jump as high as 15 to 20 bucks per thousand  

and right now lenders definitely love  to see skin in the game they like to see  

some money down definitely definitely improves  your your chances of getting an approval yeah  

here's the other thing that you can do is every  lender most lenders will lend about 10 to 15  

percent additional on the loan for warranties and  protections so remember that you can do that you  

can ask for that even if you go into a branch and  they'll allow about most credit unions are about a  

thousand eighty for gap insurance and so that that  would get you a seven to ten year policy depending  

on the company that you use but you want to ask  for that extra money because if you decide you  

want an extended warranty even if you're a private  buyer uh if you want that extended warranty  

don't ask them for the money you're gonna have to  pay out of pocket yeah in the rv industry i would  

highly highly recommend at least considering  extended warranties uh protection plans and  

gap for sure yeah i mean you've seen it we've seen  customers where they buy a brand new unit and they  

have to take it in for warranty work right away  because the limitations on the manufacturer's  

warranty i mean that they they go out a year and  it's a limited defect like you get at best buy  

yeah yeah i've seen people pull out of the parking  lot they have a loan on a brand new unit and they  

wreck it a mile down the road and this has  happened multiple times in my career where  

i've watched this happen passed it on my way home  from work there's an accident hey that looks very  

familiar like it was just at our dealership and uh  yeah and but then you pray and hope and hope and  

pray that they bought gap insurance yeah because  the insurance company is going to go out there and  

shop and find the cheapest one that they could  ever pay out on say this is all it's worth and  

then you're stuck paying the difference between  the loan with all the tax title everything and  

what they what they value the trailer at which  is yeah you know insurance companies gonna do  

everything they can do to not pay out for  you so that's where gap insurance comes in  

and that'll pay the difference so perfect so  as a wrap up here how do you get financing  

go into a branch pick the unit first right then  go into a branch or go into the dealership and  

ask them to help you get a approval so do  your application you're going to need to get  

proof of income so either a year-to-date pay  stub that shows your current year to date  

on it or two years of tax returns with all the  schedules and k-1s that's going to be necessary  

you're going to need to figure out how you're  going to come up with your down payment and  

then any other stipulations that the bank might  have around your deal you want to make sure that  

your income is high enough to support the unit  usually they won't lend you more than 45 percent  

uh debt to income ratio which means that if you  make a hundred thousand a year only 45 000 a year  

can be going out to bills anything more than that  they consider you a risk and they'll shut you down  

and so if you if you make 10 grand a month and you  have 4 500 a month going out on your debt on your  

your credit bureau you could actually put yourself  in risk of getting shut down because you have too  

much debt and so try and get that in line before  you go in and get an rv as well exactly and then  

throw down some throw down some money because yeah  the banks like that perfect well i hope you've  

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today yep thanks for having me as a guest you bet  you guys take care we'll see in the next video