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

[ganto]

Biker56, on 31 Oct 2014 - 04:01 AM, said:Biker56, on 31 Oct 2014 - 04:01 AM, said:Biker56, on 31 Oct 2014 - 04:01 AM, said:

Wait until the house is sold. Then pay cash for the RV.

If it still has a mortgage. Put the saved RV money on the payments for it.

Cutting down on the interest money paid on it, will give you more back then any savings plan.

I agree with you wait till the house sells and PAY cash and be DEBT free!! plus the dealer will give them a nice discount for paying cash I have been offered .25% off of the cost of the RV or trailer vs financing one. you will come out ahead in the long run paying cash. I could have an rv that was priced at 128.99 for 85.99k big difference.i will be paying cash for what ever I will be roaming around in since I have perfect credit and I prefer not to be in debt and I like not having finance companies running my credit and doing (hard credit checks ) wich drops your score!!

[ganto]

everone's different is all I know. I seen people file a BK and still finance a house car buy a semi truck LOL. then I seen people with perfect credit get denined because of there debt burden

[jjwicklund]

We didn't buy a MH but a truck and fiver. We paid cash for the truck and took a loan on the trailer. At the time we thought that was the best until the house sold and we could then apply the house expense money to pay off the 5er. Percentage wise we put 75% down on the combination. It worked out well as it took three years to sell the house. We're now working on getting the trailer paid off. I hate the cost of buying money.

[bruce t]

Be careful about 'expecting' a larger discount for a cash deal. Many dealers rely on the financing for extra dollars.

 

regards

[Newt]

Everyone has to run the numbers to see what works best for them. In the past I've done some creative calculations to make a deal work.

 

That being said, our last 4 RV's have been cash.

 

Newt

[ganto]

Bruce T, on 02 Nov 2014 - 05:20 AM, said:

Be careful about 'expecting' a larger discount for a cash deal. Many dealers rely on the financing for extra dollars.

 

regards

I agree with you on what you said as well since the dealer gets a kick back on finacing every month off each rv they finance

[Jack Mayer]

 

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

I buy what I can pay for as well. However, I make the decision at the time of purchase on the best way to pay for it - financing or cash. In many cases - as discussed here - the best way to pay for it may be financing. I'm in that position right now in looking for a small motorhome (27-30'). I can easily pay cash, but with financing so low and my investment returns considerably higher - on the order of 6-10% higher on average - WHY would I pay cash? I'll likely do as in the past - finance it and pay it off if the investment situation changes or if I "feel like" I don't want debt. As long as you can afford it there is no "wrong" way. The key in my mind is being able to afford it.

 

Another observation in our MH search. Looking at used units in my "goal area" - small motorhomes - is quite interesting. In MANY cases a privately owned unit 2-3 years old is within 5% of a new unit (actual cost of the new unit - NOT the MSRP). In some cases I've encountered 2 year old units that are MORE than I can buy a new unit for of the same model. And that is AFTER negotiations on the used unit. This is fairly common. It does show that people either overpaid without a trade, or they are so much underwater in their tradein that they overpaid on "balance". Given the correct dealer it is relatively easy to get 35% off the MSRP on an ordered unit. The high or average retail value on these units is not what they are worth. If you look in the "real" dealer NADA book it is VERY different from the online resources people use to value their units. Also, NEVER include any options in your eval....they are worth virtually nothing. These are just my observations, and some will disagree....

[Smitty77_7]

Be careful about 'expecting' a larger discount for a cash deal. Many dealers rely on the financing for extra dollars.

 

regards

 

And, most large dealers get a kickback for bringing in the loans to larger banks, very few 'hold the paper' themselves. I actually feel that most times Cash is king when buying from a private seller. As a bargaining ploy, usually at the very end when they send you into the 'finance guy' to wrap up the purchase (this is usually a veteran closer kind of person). They'll again push you to all the little extras that add to their profits (cars more so then RV's, but RV's too), special paint seals, alarms, etc. And of course, they all, especially RV dealers, push the Extended Warranties. What I have found is I've been able to make final 'deal's' with this person, to get things that I might want. On the RV, I agreed to finance the amount I had calculated I wanted to carry, thru their finance bank. (Was not a bad rate, and I knew that after 3 months I would change it over to a lower rate anyways.). In return, I got the Finance Closer guy to get me authorized for up to 75 hours of Service Work at costs. (We agreed to $80 an hour, vs $125 hours.) I also got parts at cost + 10% for their in house handling (tried for 'at cost', but had to suggest + 10% to seal the deal.) I knew I wanted to make some mods and replace a few items on this new/used coach. This dealer had a service department with good reputation.

 

What the dealer got out of this, was the kickback on financing from the bank, which I suspect was 1% by how the Finance Closer Guy played the game.

 

And again, everyone has to do what makes them feel comfortable. Debt free is a nice feeling. And if you or a spouse will lose sleep by 'carrying a debt' - then do what works for you. Just understand that having your money working for you, and I posted already that I personally feel the interest rates are so low now, that you can do better returns than the costs of the finance rate, relatively safely. You toss in the Schedule A part of you 1040, if that is appropriate for you based upon income, and that also pencils in...

 

I also always recommend 'Live within your means...'. I know too many people who are 'smart', that have stupidly (IMO) run up all sorts of debts. Heck, one guy who has a Master in Business, bragged about having 17 credit cards, where he just shifts the rolling outstanding balance from one card to the other, for low or interest free... Leases a fancy car and every two years, swaps it out for new model. Has a financed boat, RV, and is a member of three or four Timeshares in different places, etc. He also took out a 2nd on his home, to go a month long 1st class all the way trip to Europe with his then girlfriend. Sooner or later, that house of cards will gall... Smart debt can be a good tool. But stupid debt is what it is called, stupid:)!

 

Cash, or finance - go out and have some fun. Best to all,

Smitty

[drifting]

Yeah, having the home-on-wheels paid for before you go is the only way to go if you will be retired. Even if you think you can afford the payments, you never know what life has in store for you. If something unexpected happens and you have to leave the road, you don't want to be figuring out how you are going to pay your rent or mortgage and the rv payment at the same time until you can sell it, especially if the economy takes a dip.

[ganto]

Bruce T, on 02 Nov 2014 - 05:20 AM, said:

Be careful about 'expecting' a larger discount for a cash deal. Many dealers rely on the financing for extra dollars.

 

regards

I agree!! the rv dealer from florida called me back. I asked about me getting a discount for paying cash and all she said was she would give me a deal. i'm taking it that they also want me to finance the rv as well so they can get a kick back from the bank every month.. for wich I understand they need to make a living to. but I want to be debt free when I start full timing!!

[ganto]

Yeah, having the home-on-wheels paid for before you go is the only way toggo if you will be retired. Even if you think you can afford the payments, you never know what life has in store for you. If something unexpected happens and you have to leave the road, you don't want to be figuring out how you are going to pay you rent or mortgage and the rv payment at the same time until you can sell it, especially if the economy takes a dip.

debt is a prison

[Kirk W]

debt is a prison

Well managed it shouldn't be, but for many of us it clearly can be. Having once been a slave to payments, I am very reluctant to ever borrow money again. I know that there can be times that financing makes economic sense for the good money managers, but not everyone has the discipline to keep it under tight enough control. I like knowing that I don't have any payments!

[usaperuvian]

I'm now considering purchasing a older 2000 Rexhall Aerbus for $24,000 so I will not be in debt for the new one. I have a lot of options and do have time before my son graduates from college. Thanks to all your input because it really does help.

[bruce t]

I've been told by some dealers that you can't get finance for anything older than 8 years. Or there abouts. True or false?

 

regards

[usaperuvian]

Most dealers won't finance over 10 years or 100,000 miles. But my local credit union will finance from 1999 but it has a higher interest rate.

[Kirk W]

I've been told by some dealers that you can't get finance for anything older than 8 years. Or there abouts. True or false?

I don't think that there is a fixed answer to that, but our experience has been that RVs get harder to finance, require more down with higher rates and shorter terms as the age increases. But the unknown in all of this is what RV are we considering? I know that you can get quite different loans for an RV like a Newell or Prevost than you can with one of the more mid-range priced RVs. In most cases when a customer goes to a lender that they have an established, long term loan relationship with they will get more generous terms. To the lenders it is all about risk and return.

[drifting]

Not sure, but I think one reason rv's take such a precipitous hit in value once they reach a certain age is a more limited market caused by difficulties getting financing. Rv's don't generally get nearly the wear and tear of cars, yet they seem to decline in book value faster.

[yzg]

Cash. Trying to buy everything before retirement and sale of house.

 

In Canada, I can make far more on my money than what it costs for a loan but there is a big difference between having investments and having cash flow.

 

And then there is peace of mind .......

[Selah]

I have to agree with those that say don't pay cash. Right now investments are making so much more than an RV loan will cost. I am not a financial guru or anything close but I will share what we did.

After the final price was set we put about 1/3 down and financed the rest for 240 months. We pay an additional $50.00 additional against the principle each month. This will significantly reduce the principle over just a few years. The idea is to always stay "right side up" on the loan. Should we for any reason need to stop this life style we can sell the RV for at least the loan amount of not a little more.

At least that's the plan.

[yzg]

I have to agree with those that say don't pay cash. Right now investments are making so much more than an RV loan will cost. I am not a financial guru or anything close but I will share what we did.

..

[yzg]

 

So you get yourself a big debt. That means you have to take a chunk of your cash flow to service this debt and you are paying much more for the unit that is not an asset in the financial sense. The market has been very shaky lately .. especially with what has been happening in the EU ...so, if we have another crash like in 08/09, you still have your debt but you no longer have the same value of investment....

 

Retirement isn't a time to start all over again.....

[Barbaraok]

Yzg,

 

You may not be familiar with the different types of retirement accounts available in the US, but there can be significant tax liabilities if you pull out enough cash to buy a RV, 25% or more, whereas borrowing and slowly removing funds to make payments leaves the funds making money tax free and avoids large tax bites.

 

Barb

[Jack Mayer]

You always take a risk financing something. The risk is that your ability to pay it off changes somehow in the future. That may be because the market has a downturn. It may be because your spouse dies or divorces you - and you no longer have their income stream. There are many reasons. So depending on a "better return" on your investment to make the payment is not foolproof. LIke anything else in life it SHOULD be an educated decision. Considering all your circumstances. There is no one answer that works best for everyone.

 

However, a guaranteed income stream - such as a pension/social security - would seem to be a good reason to finance something that might otherwise cause financial harm if taken from savings. That would be the case only if the funds were not needed at the present time, or at any projected time in the future given reasonable scenarios. A market downturn in those circumstances would not cause irreparable harm.

[Kirk W]

 

After the final price was set we put about 1/3 down and financed the rest for 240 months. We pay an additional $50.00 additional against the principle each month. This will significantly reduce the principle over just a few years. The idea is to always stay "right side up" on the loan. Should we for any reason need to stop this life style we can sell the RV for at least the loan amount of not a little more.

This is an interesting approach to the problem. Should you ever need to sell before the loan is paid off and actually owe less than the market value of the RV, that would put you into a very exclusive club. I think that I may know one person who actually managed that.

 

The issue that I find most concerning about financial planning for those who are considering the purchase of an RV to live in as their only home is whether or not they have done enough financial planning for what happens when the day comes that they must cease the the constant travel mode of life. We very carefully planned our budget in order to conserve the ability to have another home when/if the time came that living in an RV was not practical. That day came for us some years sooner than we expected and while I'd love to tell everyone that it was our good planning that made our change possible, it was actually a mix of having had good advice and good fortune or just plain luck. It frightens me when I hear people commit the bulk of their reserves to an RV in the belief that it can be their home for all of their remaining life. Our experiences taught us just how challenging RV living can be if you need a walker or wheelchair to get around. We discovered how much easier life is when you have no steps to deal with at the entry or inside and how important it is to have space for walkers & a caregiver at the same location at times. In 2009, Pam went through a major ankle surgery & recovery living in our RV and that brought home to us the degree of difficulty such can be and made us realize that as we get older we are less capable of dealing with tight spaces and that it gets more difficult for both the patient and the caregiver, since both age at the same rate. Physical limitations of most of us make assisting our partner a much greater challenge as we get older. Most of us loose both strength and agility as we age and just don't exercise enough to be capable of things we once did with ease. Assisting Pam was far less difficult just 6 years ago. We both feel that we simply could not have managed living in any RV through the hip replacement surgery that she is presently recovering from. It is a shocking thing to realize that we are getting old!

 

My point is not to tell anyone what they need to do or where and how to spend their funds, but it is an attempt to get our RVing friends to realize that even the most wonderful RV may one day be a very difficult place to live and how important it is to have some sort of alternative in your plans, just in case!

[Jack Mayer]

Kirk, not only that, but if you plan on paying off the RV over time with fixed income streams - as I suggested is a possibility - then you need to account for getting rid of the "albatross" when you no longer RV, or when you no longer need THAT RV. Financing heavily may make it impossible to get out of the RV without kicking in more money. For most people that is traumatic - to give over money for nothing. (Nothing other than your past pleasure, presumably.)

 

That is why paying ahead on principle in the beginning years of the loan is a wise thing, as well as putting down something reasonable. I happen to like the bi-weekly loan payments that are now available. The payment total is the same as a monthly payment, but half of it is taken every two weeks. The net result of this is SIGNIFICANTLY less money spent on interest over the course of a loan. Yet the same approximate amount paid per month for those using a fixed income stream to make the payment.

 

Again, a key factor that people need to recognize on any loan is "can you afford to make the payments" and as well "can you afford the item". They are not always the same. What happens if you stop RVing, have 10 years of payments left, and the RV is only worth 50% of the payout amount. Can you afford to pay it off? Or are you stuck making a payment for 10 years for something not usable by you?

 

Just food for thought.