Here’s an interesting, true story that happened to me this past weekend. I’d be curious as to know if you come to the same conclusion that I did, which is: cash is no longer the king it used to be.
Hubs and I went to an RV show this past weekend. We have no intention of buying anything now BUT, in three years hubby (who will be 100% retired by then) is looking to upgrade to a Class C style motor home. Right now, we tow a travel trailer. And we like to look. We like to go to RV shows because it’s a fun thing to do and we get to see all the latest innovations in the RVing world.
So, with that in mind, we go to this RV show, sponsored by Camping World (click here) one of the largest RV distributors in America. FYI: Camping World just posted a 4th Quarter surprise loss (click here) despite the meteoric rise of RV sales throughout the country!
CEO Marcus Lemonis, put the loss results into perspective: “After several years of very strong growth,” Lemonis said, “our sales of new RVs began to moderate in the second quarter of last year. While this trend accelerated through the end of the year, sales of used RVs were up in every quarter last year.“
Anyway, as what could happen when anyone attends an RV sales show, you usually find something you like. Or would want. If only the numbers were good. Hubs and I did see something he would be interested in. Me? I’m only interested in one thing: the cost! I’m the finance person and I have our three year plan in place. Hubby will be 65 in three years, will finally retire, collect Social Security and if all goes well, we plan on trading in our travel trailer for a Class C RV and travel across country. Till hubby saw this model:
Naturally, a salesperson’s radar activated when he overheard hubs and I discussing the possibility of purchasing this model. I’ll get to the point in my story. Just note that I was just going through the motions. I have NO intention of buying anything. BUT, and here’s that ‘but’……….if the numbers are ‘good’ I would consider purchasing the Class C RV now.
So, I ask the sales person to give me two numbers: #1 if I pay cash, what’s your bottom line? How much for the RV? #2 if I finance it, how much do you want down, what’s the rate and what would the monthly charge be?
Here’s the kicker. Just know, I’m not lying or making this up. I had the sales person put his offer in writing (and I snapped an iPhone photo of it).
If I pay cash for the Class C RV, the price with tax and prep fees would be $88,767 O.T.D. (Out The Door)
If I finance the Class C RV however, the price drops to $69,999 (a full $10,000 less than list price!) Now, based on those two offers, which one would you choose? I think most people would agree and choose to finance. The sales person stated that there was no pre-payment penalty and I could pay the loan off within the first month or two. In reality, does anyone really pay off their loans? Also, I’d have to put $45,000 down and finance the balance, at 7%, over 15 years (in order to keep the payments at the $300 level as I requested) At the end of the loan, if I had gone for it, I would have paid $99,000 for a Class C RV which in reality isn’t worth more than $50,000 (which BTW, if the sales person had given me a number in the $50s, I would have purchased the RV and paid cash for it right there, on the spot! Now we know why Camping World is running at a loss. They don’t know how to make deals. Period)
This was the first time, in my shopping experience, where cash was not king. If I financed I would have gotten a better price (not necessarily a better deal)
What would you have done, if you were really interested in buying a Class C RV?
Me, regardless if I wanted the RV or not, was to just walk away. Which we did.
I like my life just fine, just the way it is. When the time comes, to buy, my new Class C RV will just magically appear. I’m sticking to my three year plan and that’s the end of that!