Paying cash on new 5er

[Girlgecko]

My DH and I will be paying cash for our upcoming 5th wheel. Every dealer we have gotten a quote from says there is no discout when paying cash AND it will actually cost more because by paying cash we don't qualify for the dealer financing discount posted on the trailer.  Does anyone have any insidea tips or tricks to use when negotiating the purchase? From the reading I've done here on other posts it sounds like asking for the "out the door" request seems to work IF you can get someone to call back.

 

[SeilerBird]

My brother bought a new car last year and he was pissed because he had to finance it or pay $6000 more. He financed it and paid it off six months later. He said it was the only thing he could do.

 

[WILDEBILL308]

My DH and I will be paying cash for our upcoming 5th wheel. Every dealer we have gotten a quote from says there is no discout when paying cash AND it will actually cost more because by paying cash we don't qualify for the dealer financing discount posted on the trailer.  Does anyone have any insidea tips or tricks to use when negotiating the purchase? From the reading I've done here on other posts it sounds like asking for the "out the door" request seems to work IF you can get someone to call back.

Paying cash nowadays is not what it was 50 years ago. The dealer gets cash when you finance it just like if you payed cash. There is no benefit/incentive to him to give you a better deal if you have cash.
As SeilerBird pointed out he gets money from the finance company.
I could have payed cash for my CR-V but the interest was so low it payed me to finance it. 0.9% to finance it and I was making 6.5% on my money. Now I have the CR-V + the money plus interest.
I would look at interest rate and terms.
The big thing is don't give any money to the dealer till you are totally happy with the unit. Don't believe the "we will fix it later" once they have your money they can't hear you. 
The outher thing don't buy any big add on warranty. Do some research. Most payout almost nothing.
Bill

 

[Girlgecko]

Thank you for both your replies.  A co-worker of mine had to "finance" a small amount of his new truck even though he had cash. Otherwise he would have beenough charged a higher price at all cash.

 

[Journey]

  If you end up with a loan its a second home interest write off.

 

[BLWRPWR]

You are buying at the peak of the season. If you can wait until next winter you will get a better deal.  The dealers and salesmen get real hungry in the winter. Especially in the snowy states. And in our case, here in Bend Oregon, cash was king. Used 2014 Greyhawk , did our research, did more research, bought in February, went in with cash and got a great deal.

 

[Gary RV_Wizard]

Sometimes there are incentives from the finance company, either to the buyer or to the dealer, but that's not real common with Rvs. As WildBill says, the dealer always gets "cash" anyway, so it's all the same to him. A buyer with cash in their pocket is perhaps a better candidate than one who hopes to get financing but maybe has a low credit rating, but in the end the dealer collects the same amount for the sale.

"Out-the-door" pricing is a way to make sure any additional fees or other contract tricks are not being hidden, but has little to do with price negotiation itself.  I don't think it has any effect on whether or not a sales person calls back.   

There is no real trick to price negotiation except to do your homework on market prices for that make & model and then make your offer.  It may take some iterations, but if the offer is good enough the dealer will take it. If not, you either up your offer or walk away.

 

[WILDEBILL308]

In today's market having your financing approved ahead of time is the same as having cash. You do know some finance companies do go for longer terms than car loans. There are 15 year and a few 20 year loans out there.
Bill

 

[MN Blue Skies]

First, welcome to the RV Forum.

We are currently in the process of purchasing a 5th wheel.  I have a banking/finance/sales background so it has been interesting to negotiate the trade-in, purchase price, financing, etc. on our new to us 5th wheel.  As an RV owner, my background has helped me understand both sides of the transaction.

My observation is that dealerships want to make the sale but also want to arrange the financing.  That means there is no discount for cash and they will try to charge you more if you don't finance through them. 

During our negotiations, I politely but firmly explained to the salesperson that we might finance through them, or we might pay cash, or we might finance with another source, but we were not going to pay a $2,000 premium if we did't finance through the dealership."  The salesperson's response was "Sorry, it's company policy.  It's disclosed on our website."  My response was "That's too bad".  Salesperson's response was "Let me pass this by my manager."  No surprise to us, the manager shows up and finishes the negotiations without any adjustments dependent how we pay for the 5th wheel.

We had a similar song and dance around the trade in and financing.  In the end all seems to be fair to both sides.  We finalize the paperwork and take delivery in the next few days.

 

[MN Blue Skies]

In today's market having your financing approved ahead of time is the same as having cash. You do know some finance companies do go for longer terms than car loans. There are 15 year and a few 20 year loans out there.
Bill

Large dealerships sometimes have bulk financing agreements with lenders that can mean rates below what the average consumer can find.  Consumers should still shop on their own but they shouldn't ignore rates that dealerships might have prearranged.  If you find great rates and terms, ask the dealership if it they can beat or at least match the rate and terms.

 

[Gods Country]

Yet another sign that the country is upside down.  Savers no longer get an incentive for being smart and having control over their lives, while people that are hocked up their rear ends and spend every penny they have ever made make out better.  Worse they are encouraged to live that way. 

As stated, I fear your only option will be to finance and pay off a soon as possible.

Personally I would tell the dealer to stick it, and go buy a very lightly used near new unit, from a private seller.
You will save thousands and get avoid their BS games. 

 

[MN Blue Skies]

Gods Country,

I think we need to be smart consumers and critical thinkers.  I don't think the OP's only option is to finance.  Knowing the rules of the game and good negotiating skills can still play a part.

From our local shopping experience, private owners didn't seem to care if we could pay cash.  Cash or approved financing still puts the same amount of money in the seller's pocket.

 

[SeilerBird]

Personally I would tell the dealer to stick it, and go buy a very lightly used near new unit, from a private seller.
You will save thousands and get avoid their BS games.

That is the best advise yet. And you will save the hassle of dealing with the dealership with your warranty items. It is much smarter to have a mobile mechanic come to you rather than take it to the dealership where it will sit for months waiting for parts to arrive.

 

[Gods Country]

Gods Country,

I think we need to be smart consumers and critical thinkers.  I don't think the OP's only option is to finance.  Knowing the rules of the game and good negotiating skills can still play a part.

From our local shopping experience, private owners didn't seem to care if we could pay cash.  Cash or approved financing still puts the same amount of money in the seller's pocket.

Being a smart consumer means getting the most with your dollar. I honestly don't have time to deal with games
and hear whinny salesmen lie about whatever crap they are trying to pull.  There are deals to be found everywhere.

 

[WILDEBILL308]

Yet another sign that the country is upside down.  Savers no longer get an incentive for being smart and having control over their lives, while people that are hocked up their rear ends and spend every penny they have ever made make out better.  Worse they are encouraged to live that way. 

As stated, I fear your only option will be to finance and pay off a soon as possible.

Personally I would tell the dealer to stick it, and go buy a very lightly used near new unit, from a private seller.
You will save thousands and get avoid their BS games.

Interesting perspective. NO cash no longer has any sway in negotiating deals of this kind. In the days when dealers did there own financing it did help when negotiating for a lower price. Today you have cash or you have financing or qualify for financing you get the same deal. You may get a better deal financing through the dealer because he makes money from originating the deal. I think MN Blue Skies will agree to this. I also think it is dumb bordering on stupid to use your savings to buy a depreciating asset. You end up with no money and a depreciated asset.
A smarter way is to use someone else's money to buy the depreciating asset and keep yours invested. Example when I bought my 2014 VR-V I could have payed cash. However I use their money at 0.9% while my money made 6%+. Now the problem some have is they spend to much and can't make ends meet. 
I have always bought used to save the big depreciation. I don't care what the salesman says or the individual, God's Country you probbabley think a private seller won't lie and mislead you.  I base my decisions on what I know and if needed a qualified inspector.
By the way add your RV to your profile and signature so we can see it.
Bill

 

[MN Blue Skies]

A smarter way is to use someone else's money to buy the depreciating asset and keep yours invested. Example when I bought my 2014 VR-V I could have payed cash. However I use their money at 0.9% while my money made 6%+.

Bill, where did you find financing at 0.9%?  Is that a recent rate?  What was the term?  (I want some of that financing!)   

 

[WILDEBILL308]

Bill, where did you find financing at 0.9%?  Is that a recent rate?  What was the term?  (I want some of that financing!)   

Honda runs specials I don't  know if it is national or just regional.  I believe I have seen the add when on the road but wasn't paying that close attention.
It was a 5 year loan. I payed $129.00 in interest last year. ;D
The sad thing is the post 2014 CR-V is no longer towable 4 down. :-\
Bill

 

[Gary RV_Wizard]

My observation is that dealerships want to make the sale but also want to arrange the financing.

The commissions they make on financing, insurance and extended warranties are often a substantial part of the dealership revenue stream. So are add-ons like "paint protection" and camping accessories. A smart dealer considers the whole revenues package from a sale and not just the margin on the RV (whether new or used). If enough other stuff can be sold in a package deal, the seller can afford to discount the main item a bit more.

The car sales business works the same. As does the farm equipment business, where the big ticket financing is often more lucrative to the dealer than the equipment itself.

 

[Baddog]

Gary hit the nail on the head as far as car dealers anyway.  There is a guy that has a national radio show "The Car Pro Guy" that used to own a Ford dealership. He has key contacts in the industry and talks about the way the car bizz works.  He said most people would not believe it but that most car dealers actually lose money selling new cars but by far make it up in all other sides of the business (parts, service, financing, warranties, etc.).

 

[captaindomon]

If you want to go through with it, you can finance it, make sure there are no prepayment penalties or fees, and then pay it off next month. Dealer gets their money, you get the deal, makes your credit scores awesome. Just one route you can go.