Comments on: Short-term lending causes long-term problems http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/ Welcome to RV Weekly where the editor of RV Trade Digest will be updating you on the latest news, trends, and products important to the RV industry. Thu, 09 Feb 2012 21:28:09 +0000 http://wordpress.org/?v=2.3.3 By: Auto Lead | Car Leads | Auto sales leads http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-16889 Auto Lead | Car Leads | Auto sales leads Fri, 07 May 2010 07:47:44 +0000 http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-16889 Premier Leads Inc. is your one stop connection to the highest quality sub-prime leads in the industry.Premier Leads Inc. specializes in car leads and Internet Marketing. Our mission is to increase sales and exposure, while providing the highest quality products and services to fit every dealership's needs. Two out of three consumers use the Internet to buy cars. The Internet has surpassed all other media, including television and print ads, as the place where consumers source for new and used cars. Research shows that 9 out of 10 consumers begin their shopping process online visiting a dealership. Find out how Premier Leads, Inc. customized product packages are proven to promote marketing and increase sales. http://www.premierleadsinc.com/ Premier Leads Inc. is your one stop connection to the highest quality sub-prime leads in the industry.Premier Leads Inc. specializes in car leads and Internet Marketing. Our mission is to increase sales and exposure, while providing the highest quality products and services to fit every dealership’s needs.
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]]> By: RV Camper http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-5207 RV Camper Thu, 24 Jul 2008 21:22:12 +0000 http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-5207 This has freedonroads all over it,this is their way of doing business in the northeast with their so call regional VP's. Just jam it down the customers throat, get the sale hammer it till they close. Who cares if they come back. Good luck in the future Marcus, you failed once in this business some of us are hoping for a repeat. This has freedonroads all over it,this is their way of doing business in the northeast with their so call regional VP’s. Just jam it down the customers throat, get the sale hammer it till they close. Who cares if they come back. Good luck in the future Marcus, you failed once in this business some of us are hoping for a repeat.

]]> By: Automotive Banking Books Business http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-3526 Automotive Banking Books Business Fri, 01 Feb 2008 08:16:06 +0000 http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-3526 <strong>Business Banking Explained...</strong> No matter where you are within your business, just beginning or have been in business for many years, one thing remains the same; your business needs a banking institution that is solid and great for businesses. Within this article, we will look at som... Business Banking Explained…

No matter where you are within your business, just beginning or have been in business for many years, one thing remains the same; your business needs a banking institution that is solid and great for businesses. Within this article, we will look at som…

]]> By: mike http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-2753 mike Mon, 03 Dec 2007 16:15:56 +0000 http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-2753 This practice has always been a problem. The big megadealers are preyed upon by the lenders to send deals to them. They are after volume quotas. As a small dealer I can't compete on equal terms. No matter what, the big dealers will get concessions from lenders that we can't. Everything is a numbers game these days. Most of our deals go to credit unions now. They are offering long terms, low rates. But who has the responsibility to educate the consumers? Soon we will have the amount of backend profits capped or disclosed to the consumers. LOnger terms definitely hurt the industry in the long term. I lose lots of deals because I use MSRP stickers in all units. Some large Mfg. don't have MSRP'S. Then the dealer can make the markup higher than other Mfg's and show a larger trade-in when he is actually inflating the true figures. Have MSRP stickers and better education for dealers as well counsumers. This practice has always been a problem. The big megadealers are preyed upon by the lenders to send deals to them. They are after volume quotas. As a small dealer I can’t compete on equal terms. No matter what, the big dealers will get concessions from lenders that we can’t. Everything is a numbers game these days. Most of our deals go to credit unions now. They are offering long terms, low rates. But who has the responsibility to educate the consumers? Soon we will have the amount of backend profits capped or disclosed to the consumers. LOnger terms definitely hurt the industry in the long term. I lose lots of deals because I use MSRP stickers in all units. Some large Mfg. don’t have MSRP’S. Then the dealer can make the markup higher than other Mfg’s and show a larger trade-in when he is actually inflating the true figures. Have MSRP stickers and better education for dealers as well counsumers.

]]> By: Darlene Leavitt http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-2697 Darlene Leavitt Wed, 28 Nov 2007 15:13:54 +0000 http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-2697 Looking at the big picture - There are really 4 parts to our new upside down customers: They were offered: "NO Money Down" "No Payments for 90 Days" The Dealers markup on the Interest Rate was obscene! AND the extended terms of the loans. We do not offer any of the payment incentives that these finance companies offer. When I have a customer come in - quoting these plans from other dealers - I show them what it actually costs them in the long run. Honesty, pays off in the end. Computers and finance programs are wonderful, when you can spit out payment numbers in the blink of an eye. We use a local bank for most of our customer financing - as I can save them up to 1% on the rate, vs. our big RV Finance Companies. You know 1% on a $20,000 loan is over $1,300 in interest charges (so take that difference to a $100 or $200K loan, it is pretty scary). We require at least 10% down. And we sell our rigs with a reasonable profit. We must be doing something right our sales for 2007 are currently up over 30% from 2006. Most dealers in our region are flat or down. Unfortunately our must have now at any cost buyers, are also doing this to themselves. Looking at the big picture - There are really 4 parts to our new upside down customers:

They were offered:
“NO Money Down”
“No Payments for 90 Days”
The Dealers markup on the Interest Rate was obscene!
AND the extended terms of the loans.

We do not offer any of the payment incentives that these finance companies offer. When I have a customer come in - quoting these plans from other dealers - I show them what it actually costs them in the long run. Honesty, pays off in the end.
Computers and finance programs are wonderful, when you can spit out payment numbers in the blink of an eye. We use a local bank for most of our customer financing - as I can save them up to 1% on the rate, vs. our big RV Finance Companies. You know 1% on a $20,000 loan is over $1,300 in interest charges (so take that difference to a $100 or $200K loan, it is pretty scary). We require at least 10% down. And we sell our rigs with a reasonable profit. We must be doing something right our sales for 2007 are currently up over 30% from 2006. Most dealers in our region are flat or down.

Unfortunately our must have now at any cost buyers, are also doing this to themselves.

]]> By: Frank Driesen http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-2691 Frank Driesen Wed, 28 Nov 2007 00:52:06 +0000 http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-2691 This issue and the inherent long time problems for "immediate satisfaction of the wants" is a long time in the making.. The customer of course bears the ultimate responsibility.. The "Industry" on the other hand, didn't (and still don't) care about "educating customers" as long as they could sell.. This is just the hallmark of a "capitalistic" structure.. Rest assured the credit market will be completely revamped very soon.. The RV industry should take a more "educational" posture once dealing with potential customers..I also think that RV dealers can/should create a kind of "certification seal" that certifies them to be an "honest" and "realistic" financial broker in your (customer) interest.... Bottom line.. only buy what you can afford and "educate" yourself about the differences between "wants" - "needs" and "affordability"....but that doesn't seem to be "cool" anymore.. instead a lot of people want it all NOW.. This issue and the inherent long time problems for “immediate satisfaction of the wants” is a long time in the making..
The customer of course bears the ultimate responsibility.. The “Industry” on the other hand, didn’t (and still don’t) care about “educating customers” as long as they could sell.. This is just the hallmark of a “capitalistic” structure..

Rest assured the credit market will be completely revamped very soon.. The RV industry should take a more “educational” posture once dealing with potential customers..I also think that RV dealers can/should create a kind of “certification seal” that certifies them to be an “honest” and “realistic” financial broker in your (customer) interest….

Bottom line.. only buy what you can afford and “educate” yourself about the differences between “wants” - “needs” and “affordability”….but that doesn’t seem to be “cool” anymore.. instead a lot of people want it all NOW..

]]> By: Jim Rau http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-2685 Jim Rau Tue, 27 Nov 2007 01:43:23 +0000 http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-2685 I have seen this problem coming from the beginning.As a long time respnsible R V dealer ( since 1961 ) we try to discourage any loans over 60 months. We are losing more and more deal with upside down trade ins. It is past time for the industry to adress this problem which if not taken care of will impact our industry adversely for many years to come Jim Rau U S R V Center Jefferson City and Columbia Mo. I have seen this problem coming from the beginning.As a long time respnsible R V dealer ( since 1961 ) we try to discourage any loans over 60 months. We are losing more and more deal with upside down trade ins. It is past time for the industry to adress this problem which if not taken care of will impact our industry adversely for many years to come

Jim Rau

U S R V Center Jefferson City and Columbia Mo.

]]> By: JimG http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-2681 JimG Mon, 26 Nov 2007 19:56:28 +0000 http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-2681 Most lenders have advance requirements that should help eliminate some of the negative equity positions but the demand for loans and if a person has good credit they usually relax the requirements some. On the other hand we have caught a couple of dealers changing the manufactures invoice which in todays market of computers is not that hard to do. They just sent the cost to what ever it needs to be and nobody from the lenders side has a way of catching it. Unless there would be some punishment severe enough to prevent this practice and techically it is illegal, it will continue. Most lenders have advance requirements that should help eliminate some of the negative equity positions but the demand for loans and if a person has good credit they usually relax the requirements some. On the other hand we have caught a couple of dealers changing the manufactures invoice which in todays market of computers is not that hard to do. They just sent the cost to what ever it needs to be and nobody from the lenders side has a way of catching it. Unless there would be some punishment severe enough to prevent this practice and techically it is illegal, it will continue.

]]> By: Sean Woodruff http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-2678 Sean Woodruff Mon, 26 Nov 2007 16:43:25 +0000 http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-2678 Jim, you may be missing the point here. It isn't about this specific deal. I have no idea if the numbers work or not. However, I do know people that have bad loans that will impact their ability to buy ANY new RV in the future. Jim, you may be missing the point here. It isn’t about this specific deal. I have no idea if the numbers work or not. However, I do know people that have bad loans that will impact their ability to buy ANY new RV in the future.

]]> By: Steve Moore http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-2677 Steve Moore Mon, 26 Nov 2007 15:04:02 +0000 http://www.rvtradedigest.com/interactive/2007/11/20/short-term-lending-causes-long-term-problems/#comment-2677 The RV industry is following the same path as the autos did years ago. We have been in the auto side since 1962, 36-48-60-84 month financing. Always pushing the limit so the buyer could make the payment. Why do you think the " buy here/ pay here side of the car business has seen 1000 % growth in the last few years ? The American consumer doesn't know how to say no ! Bankruptcy doesn't carry the stigma that it did in the 60's. Even with marginal credit the consumer can find an outlet for financing. On the banking side, lenders that I have had this conversation with, come back saying they would rather take their risk financing an RV than on the credit card side where they have ZERO chance of having anything to recover if and when the consumer goes bad. The RV industry is following the same path as the autos did years ago. We have been in the auto side since 1962, 36-48-60-84 month financing. Always pushing the limit so the buyer could make the payment. Why do you think the ” buy here/ pay here side of the car business has seen 1000 % growth in the last few years ? The American consumer doesn’t know how to say no ! Bankruptcy doesn’t carry the stigma that it did in the 60’s. Even with marginal credit the consumer can find an outlet for financing. On the banking side, lenders that I have had this conversation with, come back saying they would rather take their risk financing an RV than on the credit card side where they have ZERO chance of having anything to recover if and when the consumer goes bad.

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