A RV Financing Hack That Worked for Us
Late in the fall of 2015 a dream of mine came true. I didn't go to Disney World or win the lottery, but we signed the paperwork on a 2016 Winnebago Brave. I know it sounds corny, but I totally geek out over RV's.
For most of 2015 I tried to convince Alyssa that we should buy a new rig and upgrade from our 1994 class c motorhome, but she always shot me down (she's much more realistic and financially responsible than I am). We had been attempting to pay down a bunch of our student debt while living as cheaply as possible in our RV, so it just didn't make sense to go out and splurge on a super expensive RV.
While I was 100% on board with paying off debt, it didn't stop me from dreaming and occasionally having a weak moment where I suggested we go out and buy a new rig.
But after a long year of frugal living and paying off over $14,000 of our student debt, we finally felt like we were at a place where we could entertain the idea of buying a new motorhome. I had done tons of research and we ended up settling on the new, retro Winnebago Brave. I fell in love with it the moment I saw it. It was classic, iconic, and had all the living space we needed to Working Full-time in Our Rig.
After deciding to make the leap to a bigger and new rig, we were even able to find the one in Austin. I called the dealership. We drove over and did a tour of the RV. It was perfect. We loved her (it's a she) and wanted to jump on it as soon as possible. I told the dealer we had been working on building up our credit and paying down debt over the past year, so hopefully financing wouldn't be an issue. We went ahead and put down the $100 deposit to lock down our new home on wheels.
But then the call came. Our credit wasn't good enough. Our debt to income ratio was too high, meaning that we didn't make enough money on top of the remaining student debt we still owed. And since we do mostly freelance work, meaning that our checks come through random channels like one-off checks or Paypal, we couldn't provide the kind of consistent paystubs banks would like to see when they are lending someone over $100,000 (the Winnebago Brave retails at $123k).
I was crushed. I had been ecstatic about moving into a rig where I didn't have to constantly worry about a leaking roof or showering in the world's smallest shower. I knew I had to figure out a way to make this deal happen.
I knew our current income situation could easily cover any kind of monthly payments. It was an educated decision that we had carefully thought out. We weren't being irrational, we were just facing resistance from the banks.
I wasn't giving up on my dream that easily.
I visited several banks in person, telling them our situation. I know that sometimes you're more likely to make deals happen in person than on the phone. When people can see you, hear you, they are more likely to respond and want to help. But each of the banks said the same thing.
"Your credit is good, but you don't have enough of it. You need a lower debt to income ratio..."
Argh (that's my aggravated noise).
My next approach was finding a co-signer. I knew my dad would be on board to help. But a quick conversation with the salesman at Crestview RV in Austin quickly shot down that idea. He told me that you are not allowed to co-sign an RV. What? I had never heard that before in my life. A little bit of research proved this to be true. It seemed like the light at the end of the tunnel was dwindling for buying our new RV.
In a last ditch effort, I did some more research on Google. I read several articles about RV financing until I found one that caught my eye. The article was titled "How Co-Buyers Help Secure RV Approval."
As it turns out, there is something called co-buying in the RV world. It's different than co-signing and 100% legal. According to the article, a co-buyer will have equal ownership in the purchase VS. in co-signing where a co-signer is only responsible if a person defaults on the payment.
I forwarded the article to the RV dealership. They told me it wasn't always that black and white, but they had done it before. Less than 24 hours later we were approved for the RV purchase and we had brought my father on as a co-buyer. While we paid for the RV 100% on our end, we worked out a 2 week/year timeshare deal with my dad for being so cool with us leveraging his more extensive credit history.
Co-buying turned out to be the loophole that allowed us to get approved for financing and seal the deal on our new Winnebago Brave! Virtual cheers to a new home on wheels!