Interest rates

[garyde]

With all the talk about the prime rate dropping down to 2 1/2%. I am wondering what Loan rates are for financing Prevosts right now . Has anyone looked into refinancing or are the Loan Companies keeping their rates high like the Banks.

[Loc]

Gary,

I talked with one finance company about a month ago. They said they could get as low as 6.25% with a good loan to value and a maximum principal amount. Unfortunately, I don't thinks rates will go that low, because the spreads have widened out to make up for most of the reduction in Treasuries. Still 6.25% on an after tax basis looks pretty good.

Loc

[Darl-Wilson]

Chattel loan rates do not seem to be declining and I do not look for long-term rates to make any significant change downward. Mortgage rates are actually increasing and chattel loans are not impacted much by the Fed changing short-term or overnight rates. I primarily finance manufactured housing (using OPM) and the rates for chattel loans (not secured by real estate) have essentially remained the same for the last 2-3 years. This is for loans with similar terms as our coaches, i.e. 10-20 years. I haven't financed motor homes although my Nevada license allows that kind of activity. If anyone is interested I will do a search for wholesale lenders that I can use and get some rate quotes. Many of the brokers I talked to when buying my coach used B of A in Jacksonville, FL. Their rates were about 6.5% for 240 month loans on a 10 yr old Prevost. I am guessing I could get a rate lower than that, especially on a refi. My current refi rates are almost 1% less than pruchase rates when lending 80% loan-to-value or less.

Since motorcoach loans, unlike mortgage loans, do not generally have any fees associated with them, I would suggest changing lenders to gain a rate advantage. Even $10.00 per month would be $2,400 over the term of the loan or refinancing at a lower rate could allow the same payment but shorten the term by several months.

Call or email me if you have any questions about the advisability of refinancing. Office toll-free is 866-286-4026. I am usually there from 9:30AM, PDT until late.

Darl

[Five-O]

I dont think the rate on a Bus is going to fall if they fall at all. I think what you will find is that it will be even tougher to get a loan. They will tighten up across the board. An attorney friend of mine who represents Regions Bank in the South and a bank that does RV lending is tightening up. I think rate will have very little to do with Bus loans; it will just simply be whether or not the lending institutions are willing to get involved with it as they will only see foreclosures in real estate and will think everything leads to that especially moveables like a bus.

[Ray Davis]

I think that Five-O is right on. When I was selling my 93, it was ultimately my 6th buyer, before the coach was finally sold. In several cases, the reason for falling through was financing. If I understand Steve Bennett correctly, the older coaches are a bit harder to finance, than newer.

But, even with newer, I do think credit has tightened up, and qualifying is harder.

Ray

[jack14r]

I watch most of the used web sites as well as the converter sites each day,it appears to me that used coaches are not selling nearly as fast as they were a few months ago.Has anyone else noticed this?

[merle&louise]

I have been watching RVOnline.com and I agree the units aren't selling well at all. I think that it is a combination of people seeing their investments decrease in value, high diesel prices, high prices on tires, batteries, labor in service departments, etc. With $100+ for a barrel of oil, our economic future doesn't look too rosy! Diesel costs $.70 to .80 per gallon MORE than gasoline. What's up with that?:eek:

Hey Bayley, where is that french fry oil/fuel?

[VegasDogMan]

Saw Diesel for $3.549 in North Carolina today.

Interest rates on 2005 Coach with Montana LLC is 6.25%

[mike kerley]

I wish!!!

Flying J in Fort Pierce Florida, cash price this AM $3.91.9....Thats with a nickel discount for cash!!!

Mike K:mad:

[Darl-Wilson]

I just found out that Gold Coast Funding (http://www.gcmfinance.com/) is a POG sponsor. They are advertising 6.75% as their low rate. I suggest that we first call our sponsors last after checking other rates. The fact that they are a sponsor I am sure they will treat us better than outside lenders. Just a thought.:)

[merle&louise]

I wish!!!

Flying J in Fort Pierce Florida, cash price this AM $3.91.9....Thats with a nickel discount for cash!!!

Mike K:mad:

Hey Mike, the Flying J in Pembroke NY, I-90 exit 48A has the hightest priced diesel (@ a Flying J) in the country: $4.059:eek::eek:

[Joe Cannarozzi]

Sorry to disappoint you but in the Chicago suburbs it is now 4.09 to 4.19 at the high end and nothing under 3.99.

I have a receipt from last year Feb 4 from the Flying-J Gary, Ind., that would be a short 13 months ago and it says 1.97:eek:

It is a good thing that I get so much enjoyment fixing and upgrading it, know what I mean.

[garyde]

Regarding interest rates; ahem! Loc and Darl were refering to the spread and long term rates and short term rates. I had heard there were some options regarding fixed rates and variable rates with RV loans. Have those disappeared? Also, those advertised rates usually are reserved for those with credit scores of 720 or more. If you are re-financing and you have a depreciating asset, is refinancing even a good idea.

[Jon Wehrenberg]

Owners and potential owners are likely concerned about the rising price of fuel. I hope everybody puts it in perspective.

If we presume the average coach covers 15,000 miles annually (that's a high number) and it gets 7.5 MPG about 2000 gallons of fuel will be burned. A year ago the prices were at least a dollar less than they are now so we are faced with spending $2,000 more than we did a year ago.

But let's look at some other numbers. The market has apparently slowed down if the inventories are any indication, so any coaches for sale have dropped in value considerably. The coaches we own have depreciated considerably. That drop in value is because of normal depreciation, plus the fact that there appears to be more coaches for sale than there are buyers. I hate to think how much depreciation there is on a new coach. It makes the cost of fuel look like chump change.

If a Prevost owner is going to be strapped because fuel is expensive he is going to be shocked at how expensive other things have gotten. Tires have risen about 35% in three years. Batteries have gone up in price. Oil and antifreeze has increased in price. But the bottom line is that no matter how high fuel and maintenance has become it is a minute percentage of the lost earnings on invested capital, or the interest charges on a loan, or depreciation.

I think now is the time to buy a coach and to enjoy it because a lot of sellers are thinking negatively, and buyers are in command.

[Joe Cannarozzi]

Jon you are a true optimist with a whole bunch of salesman mixed in. I think you actually have decreased your tire costs thus offsetting the cost of fuel further. The 100 dollars spent for POG also comes to us in this manner.

Unfortunately if I input your 15000 miles and use my mileage 5mpg and the 2 dollar increase in the cost of fuel over the last year that would be a 6000 increase in the last year for that expense if we travel the same distance. No matter how optimistic I try to be, for folks like us, that would be a hard one to swallow. I think many will begin to either travel less or take shorter trips to offset the expense. Did you notice how few are going from West to East or East to West for the rallies?

It has me second guessing the way we financed ours. We chose the 5 year plan instead of the 10 or 20 to save the all juice and looking at it optimistically that is actually also helping to off set the rising cost of fuel, but it sure aint helpin much right now today.

Lately I have been reminding myself anything that is easy to get usually ain't worth nothin.

Definitely a buyers market look what that girl got that Marathon for on E-bay.

I would not be surprised if fuel is 5 a gallon by this time next year. Looking at that optimistically it will then be very easy for us to figure fuel costs when taking a trip.

[ajhaig]

Gary,

I don't know what loan products are available for coaches but as a general rule being leveraged to a depreciating asset is never a good thing.

AJ

[flyu2there]

AJ,

You are spot on!! Never smart to finance a depreciating asset unless inflation outpaces the depreciation.....that will never happen! That being said, it may be ok if you can charge it against a business, but then again that too has to make sense. To cite an example, lots of really big players are dropping their own corporate jets in favor of fractional ownership because, at the end of the day, it doesn't make financial sense to own one outright in the current economy.

A number of coaches on the market today are corporate owned, I reference the last paragraph and the much discussed one that was recently sold (maybe) on E-Bay......that's good for a new thread. There are some great buys out there and all of them will bend, however you must be in a position to pay cash and to close the deal immediately....probably the reason that the TBC is thriving!

I still remember the first house that I bought. I looked at the closing statement, I believe I paid about 100K in the late 60's and saw what the lender was going to reap, had I held the note to term. GAWD!!

Now the diesel issue.....need a new thread on that one too!! I think you East Coast guys need to convert back to coal and free up that heating oil for our tanks. Bio diesel, 3.00 a gallon here... if you don't mind your tail pipe smelling like French Fry's. Jet fuel may be the answer...we shall see....


John

[Petervs]

Jon, Your logic is so faultless that it sounds like you have talked yourself into joining the TBC yourself!

Post some pictures of the new ride as soon as possible please.

[truk4u]

Hey Jon Boy, that means we're looking at about 585 gallons of go juice to get to Pahrump and back, at 3.80 per gallon, or 2,225.00 to hobnob with the left coast Poggers! Maybe we should just ask for pictures and you could send the jacks freight "collect";)

[dalej]

Hey you guys, it won't hurt to run to Nevada since the April Rally is out your back door!

[Jon Wehrenberg]

Peter.....a different coach is not in my future. Unfortunately when I have something like a coach or plane and consider getting a different one my brain cannot get past the question of whether the improvements are worth the dollars spent. So far the answer is "no." (See my comment below to Tom relative to making the first purchase.)

Truk.....your logic is unassailable. However if logic was used by Prevost owners there would be no Prevost owners.

[Darl-Wilson]

I have been doing some rate checking and it seems that our sponsor, Gulf Coast Funding (http://www.gcmfinance.com/), has the best rate I've encountered so far. I just called GCF and they extend a special rate to our group which is .25% less than their posted rate. Rates quoted by Karen (she and her father own this company) 1999 and older, loan for over 100k, excellent credit, is 6.5% fixed for 15 years. For most newer Prevost coaches the rate is the same but amortized for 20 years. I didn't ask about any other fees but I assume they don't have any or at least a very small document preparation fee. That could be negotiable. In the scheme of things this doesn't seem too bad. Despite what you might see advertised, conforming real estate loans for 30 years, fully amortized fixed rate is about 6.5%. Since a home is generally considered an appreciating asset and a RV depreciates, often rapidly, 6.5% seems fair. In addition a RE loan has several costs and fees associated with it where an RV is relatively fee-free.

I agree with the theory of not financing or leveraging a depreciating asset but if a coach is already financed or the only way of acquiring the Prevost is by financing it, does it not make sense to get the lowest rate possible? There is also the tax advantage if the coach is declared as a 2nd home.

Here is something to consider; the payment difference between a 7% 20 yr fixed loan for $200,000 and the same loan at 6.5% = $59.45 per month X 240 months = $14,268. Now that will pay for diesel for a trip or two!:)

[Ray Davis]

I used Gulf Coast on purchasing my Marathon. They were great to work with. I had everything arranged in advance, and when I pulled the trigger, they wired the money to the seller the next morning.

Couldn't have been easier. Although my rate (with I thought excellent credit), turned out to at their posted rate (at the time), but at 19 years.

Ray