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What % did you put down for your RV & how many months financed


usaperuvian

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May I ask how much did you put down for your RV and how

 

long financed?

 

 

I need to continue to save for a down payment for my dream RV

 

and the one I like (with the 25% mark down from MSRP) will be

 

about $110,000 and I would like the max 240 month loan. I

 

plan on spending all my kids inheritance and not leaving them

 

the equity out of our house :D lol

 

We currently have a small 24' RV and that is fine for the next 2 years for our travel needs. But in 2 years I want to fulltime/travel in the RV and I want one like a home not a RV.

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Our first motorhome was paid for when we hit the road. We were going to pay cash for our new one but got such a good interest rate that we took a loan. Our return on investments are greater than the interest so it made sense I guess. But I still hate to have that payment.

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May I ask how much did you put down for your RV and how long financed?

Since your question was pretty specific, I'll attempt to respond as specifically as I am able. and then add just a little bit of advice at the end. To address the RV purchase, we have to first consider which RV purchase, because there have been several over a lot of years. Our very first RV was purchased many years ago and it was also a very experienced RV that we got from friends. Since it only cost $250 we did scrape up cash (in 1974) but it probably was not the sort of thing that is of any interest to you. Over the years after that we did finance several others, but then in 1988 we sold our last one were without any RV for several years until we bought our first motorhome(1987 Allegro), in 1990. As I remember we put down approximately 25% and the remainder was financed for 10 years.

 

The motorhome that we bought for our full-time adventure was purchased new in mid 1998 and the MSRP was $81,000. We traded in our 1987 Allegro as the down payment and the amount financed (including cost of a 7 year extended warranty) was $56K and it was financed for 15 years. We didn't actually carry it but three years, although that was not a part of your question.

 

Our present RV would not be suitable for full-time living although we have spent as long as 5 continuous months in it this past summer, so for that reason I'll not go into detail but we did buy without any financing and it cost far less than what you are considering. At present it would seem that most lenders are asking for at least 20% as a down payment and some of them more. In addition I believe that you will find very few if any who will write a loan for a used RV that extends beyond 10 years. Interest rates are fairly low at this time but they will be dependent upon your credit record and your choice of lender. I suggest that if you have a financial relationship with a bank or lender that you might be wise to discuss your plans with one of their loan officers, as they should be willing to advise you and they will have much more accurate information than any of us can give. Lending is a constantly changing business and historical information is of only limited value.

 

Like most folks on the forums, I have some strongly held views on financial planning and what is the proper way to approach things, but also like most everyone, my approach may not be workable for you. For that reason I'll leave that for another thread. If you do want to discuss views on finances, feel free to introduce that subject.

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Do what you can afford to do. IMO pay down as much as you possibly can. It is going to depreciate no matter what. You should be able to purchase that 110KRv for around 75K. If you can come up with 75 K pay cash. If not put as much down as you can and look for good loan rates. In our case we saved and invested for 10 years and were lucky enough to pay cash for our truck and 5th wheel. You know your budget. Do what you need to do.

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Like Rich said, you should be able to get 30-35% off any motorhome. Shop around and you should get way more than 25% off.

 

Like others my advice - although you did not ask it - is to put as much down as feasible and shorten the payments. Some dealers will do a 15 day payment cycle....that is worth considering. If you can get more in your investments - and they are locked into that rate - then I'd finance for sure. It is not purely a numbers based decision, though. If you feel you have the cash flow but not the up front money the pleasure obtained by having the asset and using it may be worth carrying a loan - only you can decide that. Now to answer your question and leave the advice you did not ask for behind... :)

 

We have financed two RVs. In the first case we put down 40%, in the second 30%. In both cases we paid them off within 3 years. In both cases the length of the loan was 15 years. The reason we financed at the time was that we were getting far more for our investments than the interest rate. We paid them off because the investment return got close to the payment cost, and we both do not like debt. In hindsight the payment never did exceed our investment return and on paper we would have been better keeping the financing. But we "feel better" not having debt. So it is not always a purely numbers based decision.

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I have a different view on the finance issue. Pay what you can down without putting yourself in a bind and there is nothing wrong with 15 or twenty years of payments to keep them low. You can

always pay more each month or pay it off any time you want or are able. Interest rates are currently low. That said, I do have over $1,000,000 in retirement accounts that I have complete control over.

I could take the money from there and pay cash for an RV which would mean that I would have to pay tax on the money taken from those accounts. Something that I don't want to do. My experience

has been that I will require more money to get by on between say 65 till say 85. I will be able to get by with a lot less, in todays dollars, when I am over 85, if I make it that long.

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We haven't bought our rig yet, so can't answer your question directly.

 

I can, however, relate what I found about financing terms on used rigs.

 

You can get:

60-72 months back to 1997

120 months back to 2002-3

180 months back to 2006

240 months back to 2011

 

All these assume a decent down payment and no more than 100k miles. And of course these windows will slide each year and with changing credit conditions.

 

I realize you want something new and this doesn't apply to you, but others may read the thread and, hey, you may change your mind. :)

 

Good luck in any case.

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We did the same as Jack, financed part because we had (have) investments that are doing so well, plus since most investments are in tax deferred accounts, the longer we keep the money in the funds the less tax we have to pay.

 

Don't go more than 10 years - - you're assuming your health will stay good all of the time, and that isn't necessarily true. And set up a table to show what the principal payment is each month and consider just doubling the principal payment - - each extra principal payment is one less month on the loan. Do this early in the loan and it can really make a difference.

 

For for all of those naysayers, it would be better to just sit and watch the grass grow than get out and live the dream?

 

Barb

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Specific answer, we put down about 48%.

 

So many variables, and one size does not fit all:)!

 

For us, I knew what our retirement cash flow would be, and worked the numbers to get the payments to a monthly amount that I wanted, and targeted paying of the loan in 7 years. (I took out a 12 year loan, but pay down more to hit the 7 year payoff time. Why? So if I have a month or two that I want to pay less, I can.).

 

We Schedule A the low interest rates, and the balance we kept working for us in our trading brokerage account, and have more then offset the costs of the overall financing.

 

Lots of angles, and lots of opinions. What matters to you is what really matters:)!

 

Best of luck to you,

Smitty

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Let me say up front that I'm not like other people. I am VERY conservative financially. I paid cash for every RV I've owned. As a result they were all older units and needed at least some work.

 

All our RVs, including the current one, were bought before selling the house and going FT. To me that made the RV a luxury item/toy. I have a rule that I don't finance toys. What I can "afford" means what I have cash to pay for, not I can cover the payment.

 

If your RV is your FT home, it's different. You gotta live somewhere and the idea of a monthly payment for a necessity (housing) is not unreasonable. If something were to happen to the current RV I would most likely pay cash for its replacement. However if this one hangs in there a few more years, our post-retirement budget settles out, we're still FT and gonna stay that way long term, I'll consider financing. Still probably won't because I believe being debt free gives me more options.

 

As an aside, I recommend looking at your options from a "total cost of ownership" perspective. Not saying that should always determine the course of action. Lifestyle considerations are more important. But it should be a strong driver in the decision process.

 

As always, worth every penny you paid. Good luck!

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We also financed our motorhome. We did not put anything down. There was enough value above and over the purchase price that we were not required to. We financed for the longest period possible to keep the payment as low as possible. When we have extra, we make additional principle payments. If we have a tight budget for a few months we are not obligated to pay more than we can afford, the original budgeted amount /lowest payment. I have always taken the longest term possible, but made extra payments on anything I have financed. No one stops you from paying it off early. Do make sure the loan does not have any penalty for paying it off early.

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We negotiated our best deal on our new 2014 5th wheel and put down 15% with a 12 year Note. We could have done 10 or 15 years as well, we settled on 12. In my opinion you should be able to do a lot better than 25% off of MSRP. If not keep trying or look elsewhere.

 

James

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Our down payment was the motorhome that we traded in. The mortgage we financed was for 20 years, but we will pay it off in six years, when I am 70. Right now it offers a nice tax deduction. The rate is a low 3.47, and we make much more on our investments.

 

I agree with those that say to do what is best for you.

 

Karen

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We paid cash for a new pickup and a used 5th wheel. Original plan was to buy a used pickup also but used prices then were too close to new not to go new. We didn't want another payment because there are enough of them to deal with in life as it is, i.e. space fees, fuel, insurance, etc., etc. Between our investments and retirements we are doing just fine enjoying our traveling lifestyle.

Since your question are finical do the math to see which options will leave you living the life you dream of. Good luck.

Later,

J

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Our down payment was the motorhome that we traded in. The mortgage we financed was for 20 years, but we will pay it off in six years, when I am 70. Right now it offers a nice tax deduction. The rate is a low 3.47, and we make much more on our investments.

 

I agree with those that say to do what is best for you.

 

Karen

 

Phew! Thank you Karen! I thought I might read though this whole thread with every saying PAY CASH! We're looking at retiring next year (financial planner says go now, but we want to get the house ready to sell, etc etc) and there's certainly enough value in the house to buy anything I've looked at. But with money available at 3.5-4% and my investments averaging several times more than that... why not use someone elses money? Just setup an auto debit for payment the extra money I would have plunked down can be making enough extra to cover annual fuel costs, repairs and camping fees with money to spare. While it's cool to tell all your friends and campground people "I paid cash for this", it's cooler to be banking 8-12% of $2-300K or more... the money's there to pay for it when the time comes, but why wouldn't I want to make a profit off someone else's money?

 

That said... everyone has to do what they're comfortable with.

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Like wise, we bought what we could pay for, not what we could finance.

 

Same here, but in a different way. Rather than liquidate highly appreciated assets and pay capital gains, I take out a loan against the assets and pay it back at a low (and tax deductible) interest rate.

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I would borrow money at today's low rates if I could invest the cash on hand at a higher rate. Anybody making 3-5% or more on a low risk investment has a very marketable skill. Maybe I'm just not smart enough...

 

That's dividend yield on some stocks, not even looking at the upward momentum of the market.

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