I Guess Cash Is No Longer King

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.

Whatever!

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:

$79K RV Class C.png
Class C RV: $79,900

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)

cash cost.jpg
There’s the sales pitch up above

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)

finance cost.jpg

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!

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15 comments

  1. Wow. Just Wow. The only thing I can think of is they get a huge kickback from the financing company. I bet you could find a newish used one for half the price.

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    • The unit sells for a bit over $50 grand everywhere else in the country! But we’re not ready yet. It’s a future plan. One that will make Nick happy because he doesn’t want to tow anymore. He just wants to jump in the vehicle and go!
      Yes, the company makes a fortune from the financing. The sales rep finally admitted that to us. t’s the banks problem, he said, once the unit is sold. Nice.

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  2. Same thing happened to us. I think they make more money by having you finance it, I think they get kick backs or something, Our last Rv they tried real hard to get us to finance. But my husband is a great negotiator, it was an older one so they gave up trying to get us to finance after awhile. We love the Class C over the travel trailer. We down sized to a 23ft, and it is great. We don’t go to camping world anymore for Rv buying. They are to high. We go to US Adventure here in Iowa, they have always been good with us. Happy Shopping.

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    • Thanks Sandra. Good points to know. My hubs loves the Class C. We’ll see. If we can find a good deal now, maybe we’ll take the plunge. I want him to be happy. After all, its really he who does all the RV work. I just cook the meals and pay the bills LOL!
      Thanks again for your comment.

      Liked by 1 person

  3. Hi Cindi, Hope you are feeling better. Are you still taking Benadryl?
    I think the number one way I found that cash is not king is rewards credit cards. As long as you pay your credit card balances off monthly they provide discounts on all your purchases or perks. I also got a rebate bringing the price of a car down in 1998 when I took A zero interest loan.
    Does the Four Winds you were looking at sleep four? Looks like a small one. What kind of mileage does it get? Lara

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    • Lara, you’re not going to believe this. But the ER doctor told me he was going to give me a script for Benadryl but he never did. Can you believe this? I wasn’t in the mood to go back to the ER. I had some Equate Benadryl at home and took those.
      What a mess.
      I am very, very happy with our continuation of our zero interest based loans. I get big ticket items and pay them off all within our cash flow limitations. I try to pay them off one full month before they are due. If not, I refi with another zero interest loan that has no transfer fees. If ever I get bunched up, I have the cash to just pay them off outright. So, so far, so good.
      I think the RV we were looking at can sleep 4 to 6 people, so if we wanted to take the grands with us, we could. Yes, it’s a small one, which we prefer. Only 22 ft. The unit we were looking at was a Ford diesel on a Ford chassis. It got between 15 and 18 mpg, which in RV language is very good.
      We have 3 years before we will ‘need’ a Class C. I’m in no rush but hubby is tired and wants to enjoy his life now. So, we’ll see. He so longs to just jump in the car and go!

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  4. I’m pretty sure the RV people come out ahead with financing even with the lower price. Their profit is, of course, in the years of interest you would be adding to your purchase price. $99,000 is more money in their pocket than $88,000. The enticement is telling you that you can get the lower price by financing, then pay it off the next month if you like. But, as you pointed out, nine people out of ten won’t do that. Trust me, they have it all figured out psychologically.

    Glad you’ve compared prices with other dealers and realize they are definitely too high.

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    • Thanks Anne. We have to be super smart consumers these days. We also need (or at least I do) time to think and look at everything from all angles. We met a couple at the RV sales convention who are paying $1800 a month for their motor coach. That is insane!
      And yes, you are right: the RV people come out ahead. Not us, unless we are careful.
      Thank you for your comment.
      Our budget is $50K. Cash. Once we put our goal out into the universe, a deal that is right and affordable, our RV will magically appear.

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  5. It is the same with autos. The dealerships make more money if you finance, it must be some kind of deal they have with finance companies. I saw on one Dave Ramsey Facebook site that a dealership would not sell a car for cash because they didn’t make enough money on the transaction…..crazy world

    Liked by 1 person

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