By Chuck Woodbury, editor
Do not buy this RV under these terms. Do you see the small print? This price does not include title, license, prep, freight, and dealer document fees.
So let’s assume a buyer got the dealer to lower the price down from here. All those other fees would probably bring it back up to more than the $134,999 as advertised. At the terms offered here with payments of $899 a month, the dealer would receive a down payment of $13,400 and an additional $137,000 to be financed.
But what’s most disturbing about this to me is whoever buys the RV under these terms — putting 10 percent down and then financing the rest at 4.99 percent interest for 20 years — yes, 20 years — will put themselves in a precarious financial position for all that time. For example, buy this RV at age 60 and you’ll still be shelling out $899 a month until you’re 80! The loan would not be paid off until February, 2038!
Does that seem wrong to you? Yet RV buyers fall for this. Notice this particular deal is with Camping World, which many RVers, me included, believe will do just about anything to make a sale.
•The buyer loses his or her job?
•The stock market dives and they lose their nest egg?
•The buyer or spouse gets sick and can’t RV anymore?
•The buyer has a big medical bill that robs them of precious savings?
•The RV fall apart in 10 years and they can’t afford to get it fixed?
•The buyer tires of RVing.
An RV does not appreciate – quite the opposite: It depreciates, and quickly. This RV will lose about $34,000 in value the minute it rolls off the dealer’s lot!
AT THE END OF THE LOAN, the buyer will have paid a down payment of approximately $13,500, principal of $137,000 and interest of $78,466 – for a grand total of about $229,000! If they buy today (February, 2018), they will still be paying more interest than principal for six years, at which time they will still owe $109,693 on the loan. Assuming the RV is worth maybe half what they paid for it then (I doubt it would even sell for that), they would receive about $62,000. But wait! They would still owe $109,693 on the loan! So, in order to pay it off, they would need to come up with $47,000 out of their pocket right there and then!
Actually, under the terms of this loan, no matter when the RV is sold – whether in two years or 15 years – the owner would still be upside down on the loan and need to hit their savings account to pay it off.
Be warned: Do not get suckered into such a trap.