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Old 07-29-2016, 12:48 PM   #1
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Financing Pros & Cons???

All,
As my wife and I near the "go for launch" in actually purchasing our first Used Class A Tiffin/Newmar/2008-2012/gasser/$50-80K range, we are trying to figure out the best way to pay/finance it.

We could pay cash for it, but I'd prefer to put a good downpayment on it ($20K ish) and finance the rest until we see how things roll out financially. Does anyone have suggestions on how to/where to go for financing so we may get the best rate/terms possible?

Credit Rating is no issue at all as we are well over the 800+ mark for credit purposes.

I know it's a "personal decision" and I get that but any info as to what and where to go for help would be great. Don't know if there are places that specialize in RV loans or not...
Thanx so much...
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Old 07-29-2016, 01:38 PM   #2
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Cool

Part of your thought process should be what happens to your tax situation.

If pulling the money [to pay cash] is coming from an IRA or 401K, be advised that the amount of money you take from that program will go into your gross income for the year. Most programs take 20 to 25% right off the top for taxes; so if you need $75,000, you have to take out $100,000 to get it.

When looking at paying cash or financing, it became apparent that paying cash would cost me a higher insurance premium (Medicare), a higher tax bracket and a huge tax liability.

Pro....you don't have to pay the interest on a loan or loan payments.

For me, financing is the better way to go.

FWIW...I have no coach right now
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Old 07-29-2016, 01:46 PM   #3
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The places that I remember being mentioned for loans (in no particular order) :

Essex
Bank of America
USBank
USAA (I have used two times must be a member)
Credit Unions

Mike
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Old 07-29-2016, 01:47 PM   #4
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Check out Essex Credit Corporation, US Bank and Costco. Essex and Costco advertise a lot and US Bank has a RV and boat loan division.
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Old 07-29-2016, 01:58 PM   #5
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For us it worked out better to finance the Magna than to take the money out of our annuity.
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Old 07-29-2016, 02:10 PM   #6
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In this economy, many are making more on their money in the stock market and other accounts than the current interest rate on loans. That kind of makes it a no brainer. Borrow the money at a lower rate and leave your cash alone. When you add the right off as a second home, you reduce your theoretical interest rate even further.
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Old 07-29-2016, 02:39 PM   #7
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A sincere thank you to all.... I appreciate the good information and once again I like to defer to those of you who are "doing it"!!!


Like I said, I could pay cash but in this low interest economy...a loan looks better. Not only that the Motorhome $$$ would come out of our funds we use to "flip houses" which is going very well right now...would not want to kill that goose who's laying some good eggs right now.


Another question...how about the term of the loan? Would you suggest go as long as you can and pay off sooner if it makes sense or pick a shorter term from get-go???
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Old 07-29-2016, 02:59 PM   #8
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Quote:
Originally Posted by Wundertaker View Post
Another question...how about the term of the loan? Would you suggest go as long as you can and pay off sooner if it makes sense or pick a shorter term from get-go???
Personally, I went with a longer term (20 year) with the intention of paying it off much earlier. As mentioned, another advantage is you can deduct the interest as a second home off your income taxes and some states you can claim the sales tax as a deduction.
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Old 07-29-2016, 03:17 PM   #9
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We just financed part of our new to us 2009 Thor magellan 36r. Where we got it was a local small RV dealer. He had a good rate of 4.7% for the remainder of our coach after the trade with Alliant Credit Union. A lower rate could possibly be had with a home equity loan. I'd stop buy your bank for guidance. Good luck and enjoy the lifestyle.
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Old 07-30-2016, 12:29 PM   #10
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Just remember that an RV is a depreciating asset, so the longer the financing term, the further in the hole you go as depreciation eats up the value. And the temptation to use your cash flow for something other than an early pay-off is great.
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Old 07-30-2016, 12:55 PM   #11
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When we decided we'd like to pay cash, we realized that, since we'd have to liquidate a few investments, there'd be a capital gains hit. Our house is paid off, so we decided on a home equity loan - tax deductible. Our "cash" and investments are intact, we'll pay it off faster than the allowable term, we can cash in investments on a schedule that is less "taxing" and will still have the funds we would have paid for "just in case".

We'd rather pay the bank than Uncle Sam at this point.
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Old 07-30-2016, 04:17 PM   #12
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Financing purchase of a RV

We used Bank of the West and got favorable interest rate and terms.
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Old 07-30-2016, 04:21 PM   #13
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I do "hard money" loans on Real Estate only that provides a 8-12% return. My coach is financed @ 4.25%. That was an easy decision for me. JH
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