Conventional thought would suggest that, during times of economic hardship, making a large purchase such as an RV or boat is a mistake. This is true in some ways, and those who cannot afford to take on more debt shouldn’t be running out the door to make a purchase.
However, when the COVID-19 pandemic struck, interest rates began to hit record lows. Record low rates for home mortgages were making headlines, but it wasn’t just homes that were affected. RV and boat dealerships were also beginning to offer terms that would have been unheard of in previous years.
When Is Extra Discretionary Spending Worth It?
Financing advantages, such as 0 percent interest and 90-day delays before first payment (or even longer), have traditionally been reserved for extremely qualified buyers, liquidation sales, and special events.
When the economy is in rough shape, though, incentives in the form of favorable financing are used to juice the system. Due to COVID-19 and its economic impact, suddenly rock bottom rates are becoming the norm for RVs and boats.
Is 0 Percent Financing Worth It?
Few of us are able to walk into a dealership and make a cash purchase. The idea conjures up the image of someone walking into the showroom with a briefcase of cash, dumping it onto a desk, and then driving off the lot with their new vehicle.
This is cartoonish, of course, and it never really happens this way. However, when 0 percent financing is available to a wide swath of people, suddenly customers have gained a degree of buying power that was previously thought impossible.
No, driving off the lot with a payment plan may not seem like the same thing as writing a large check, but with 0 percent financing, they are essentially the same thing. There are two scenarios where it is certainly worth it to take advantage of 0 percent financing.
First, the people who were already planning on buying an RV or boat but simply hadn’t moved on it yet. 0 percent financing presents an opportunity to make that purchase with a lower monthly payment and without paying more than the vehicle is worth. Second, for those that dreamed of adventures or family vacations in an RV, but weren’t sure if they could justify the cost, 0 percent financing brings the total cost of the vehicle down to a manageable level.
The Best Time to Buy an RV
Let’s go back to that cartoonish buyer with the briefcase full of cash. Imagine that they point to an RV and ask, “how much is that one?” and the salesperson responds, “Ma’am, that one right there is $100,000.”
“I’ll take it,” she says and then proceeds to drop $120,000 down onto the table.
Something isn’t quite right with this picture. However, this is essentially what is happening with financing rates above 0 percent, only over the span of the loan.
Put simply, the best time to buy a boat or an RV is:
When you can afford it
When you aren’t agreeing to pay more than the vehicle is worth
Financing rates of 0 percent make it possible.
Seize Silver Linings While They’re Around
We’ve all heard the phrase, “carpe diem” or seize the day. That is, take advantage of the time you have been given and make the most of it. The current situation with the pandemic and the economy is undeniably a dark time but there are silver linings everywhere. Perhaps the phrase should be “carpe argentum oblinit” or seize silver linings, such as 0 percent financing.
An RV purchase (or any toy vehicle, whether it is a boat or a trailer made to hold four-wheelers or jet skis) is an investment in an adventure. With many more dealerships than ever before offering 0 percent financing and terms that don’t require payment for 90 or 120 days, or sometimes even longer, there simply has never been a better time to join the ranks of RV owners.
For Dealerships Looking to Offer Better Financing
There are some extraordinary advantages for consumers in this environment, but dealerships stand to benefit as well. Sometimes, offering incredible financing, insurance, and warranty products is as simple as working with an outsourced provider that has the experience to secure them.
From our extensive network of lender relationships, our connections to insurers, and our extensive product and warranty knowledge, partnering with Finance Solution can be a dealership’s way to cash in on a favorable environment for RV sales. Simply fill out the form below to get started.