Go Back   iRV2 Forums > MOTORHOME FORUMS > Class A Motorhome Discussions
Click Here to Login
Join iRV2 Today

Mission Statement: Supporting thoughtful exchange of knowledge, values and experience among RV enthusiasts.
Reply
  This discussion is proudly sponsored by:
Please support our sponsors and let them know you heard about their products on iRV2
 
Thread Tools Search this Thread Display Modes
 
Old 07-07-2015, 10:52 AM   #43
Senior Member
 
Join Date: Sep 2012
Posts: 5,992
The other thing worth considering is what deductions you have now. If you are like a lot of us senior citizens the kids are gone, house paid for and the minimum standard deduction is the best deal we get. That does not change if the interest payments are not enough to kick one out of the minimum standard territory. ;-)
__________________

__________________
nothermark is offline   Reply With Quote
Join the #1 RV Forum Today - It's Totally Free!

iRV2.com RV Community - Are you about to start a new improvement on your RV or need some help with some maintenance? Do you need advice on what products to buy? Or maybe you can give others some advice? No matter where you fit in you'll find that iRV2 is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with other RV owners, see fewer ads, upload photographs, create an RV blog, send private messages and so much, much more!

Old 07-07-2015, 11:07 AM   #44
Senior Member
 
alpha99's Avatar
 
Winnebago Owners Club
Join Date: Apr 2013
Posts: 1,035
Quote:
Originally Posted by nothermark View Post
The other thing worth considering is what deductions you have now. If you are like a lot of us senior citizens the kids are gone, house paid for and the minimum standard deduction is the best deal we get. That does not change if the interest payments are not enough to kick one out of the minimum standard territory. ;-)

The OP is in their mid-50's.

Whatever your deductions are, they are still pennies on the dollar. Deductions, not credits.
__________________

__________________
alpha99 is offline   Reply With Quote
Old 07-07-2015, 11:22 AM   #45
Senior Member
 
TexasTom's Avatar


 
Newmar Owners Club
Join Date: Jul 2013
Location: DFW
Posts: 956
For me financing made a world of sense because the capital cost was below the return on my money.

One thing I did learn on my original MH loan. It is not unusual for banks to include a demand clause. My first bank wanted to revise my loan to include it, (yea right, like I'm going to go for that) and the next 3 banks/credit unions I talked with all had that clause. So you might want to be sure to read the fine print.
__________________
TexasTom is offline   Reply With Quote
Old 07-07-2015, 02:28 PM   #46
Senior Member
 
SteveLevin's Avatar
 
Join Date: Feb 2010
Location: Sunnyvale, CA
Posts: 1,195
Quote:
Originally Posted by alpha99 View Post
The OP is in their mid-50's.

Whatever your deductions are, they are still pennies on the dollar. Deductions, not credits.
Sure, but in California, for example, if one is still working, it's easy for your Federal+State taxes to be close to 40% (and hard for it to be less than 30%).

And 6% interest taxed at long term capital gains is still profitable over pay 4% interest, even if you weren't effectively getting The Man to subsidize it down to 2.4%. And if you are able to make the payments without going into that money (that is, like a forced savings), until you can retire and your income drops (putting you into a lower bracket) and move to a state that has less income tax, you can do even better.

Like I said, when that is across $300,000 for example, it's an easy post-tax $12,000 per year. And depending upon your timing and situation, it might represent closer to $20,000/year -- so as much as $140,000 net profit over 8 years. I know to some folks that isn't worth the effort, but for many of us, a free $140,000 is definitely worth the effort.

Just sayin...

Steve
__________________
The Green Machine -- 2000 Mountain High Coachworks Summit (Spartan chassis / Cummins ISC)
...and F-Troop: Fearghus, Fiona, and Frankie (Cairn Terriers)
SteveLevin is offline   Reply With Quote
Old 07-08-2015, 12:10 PM   #47
Senior Member
 
Patti Brown's Avatar
 
Newmar Owners Club
Coastal Campers
Carolina Campers
Join Date: May 2015
Posts: 506
On financing RV purchase

I have known of too many people who ended up losing their financed MH when their person economic situation changed abruptly and they could no longer make those payments. (Banks make loans to earn them money, not to save you money.) The people who financed and lost learned the hard way the truth of the proverb, "The borrower is slave to the lender". We paid cash for ours and sleep much better for having done so. If our investments go down, or my business tanks, or sudden illness strikes, or any of a dozen other catastrophes hit, that MH is still paid for and I am not worrying where to find money to make the payment so the repo folks don't show up.

As many have said already, it is a personal choice. We have chosen on principle not to finance anything that is a depreciating asset.
__________________
2014 Newmar Bay Star 3308
Patti Brown is offline   Reply With Quote
Old 07-08-2015, 12:36 PM   #48
Senior Member
 
johnsonk555's Avatar
 
Join Date: Feb 2010
Location: Judsonia, AR
Posts: 113
Why pay cash for something that will depreciate as soon as you drive it off the lot?
__________________
johnsonk555 is offline   Reply With Quote
Old 07-08-2015, 01:20 PM   #49
Senior Member
 
Join Date: Apr 2014
Location: Austin,TX
Posts: 400
"By financing, he said we would be in a better position to negotiate if and when we wished to trade in for another coach."

I can not fathom how that would be true, or is based on actual facts.

You will get the best "trade in" for your coach when you OWN IT and sell it outright, not trade it in to a dealer. That's where they make THEIR money, on buying low and selling high on trade ins. Still having a note on an RV makes many people feel like they HAVE to trade it in at a dealer in order to deal with the paperwork of paying it off at the same time as buying a new one. Financing traps people into trading in to a dealer for a lower price then selling outright for a higher one.

I'd have to call Pants on Fire on that statement.
__________________
Loraura is offline   Reply With Quote
Old 07-08-2015, 05:01 PM   #50
Senior Member
 
Join Date: May 2015
Posts: 141
Quote:
Originally Posted by Patti Brown View Post
I have known of too many people who ended up losing their financed MH when their person economic situation changed abruptly and they could no longer make those payments. (Banks make loans to earn them money, not to save you money.) The people who financed and lost learned the hard way the truth of the proverb, "The borrower is slave to the lender". We paid cash for ours and sleep much better for having done so. If our investments go down, or my business tanks, or sudden illness strikes, or any of a dozen other catastrophes hit, that MH is still paid for and I am not worrying where to find money to make the payment so the repo folks don't show up.

As many have said already, it is a personal choice. We have chosen on principle not to finance anything that is a depreciating asset.
If those tragic things happen...wouldn't you rather more liquid assets? Being broke/sick and having a motorhome doesn't seem like a common mix. It's much easier to make a years worth of payments (to get back on your feet) with your, say $100k, than it is to be flat broke and have to sell your asset (likely for a bigger loss if you're in a hurry). If $hit really hit the fan, you walk on your loan and take the credit hit.

To each their own!

OP: Where are you at with your decision now that all the dust is flying?
__________________
Craig and Jessica | RV Rookies | 2014 Fleetwood Bounder 35K| Tampa, FL
Car54 is offline   Reply With Quote
Old 07-08-2015, 05:05 PM   #51
Senior Member
 
Winnebago Owners Club
Freightliner Owners Club
Join Date: Apr 2015
Location: Western WI
Posts: 688
Quote:
Originally Posted by MrBelvedere View Post
We're going to pick up our first RV next week. In our mid 50's, my wife and I have saved for years and always thought we"d make our best deal by paying cash. I received a call from the business manager who told me that we're approved for a significant portion of the cost at a rate of 4.25%..and that the interest might be tax deductible. By financing, he said we would be in a better position to negotiate if and when we wished to trade in for another coach. I'm doing better than 4.25% on my investments and am looking for input from more seasoned RV veterans!

Any thoughts are appreciated
If i can pay cash, I do. the finance guy is shinning you on, they get money for writing contracts for loans. The tax deduction is true, but is not that much and depends on what bracket you are in to see if it's even worth it.
__________________
2001 Itasca Horizon 36LD Cat
Retired Air Force, One lovely Angel, 2 Cats and three birds.
the_vfox is offline   Reply With Quote
Old 07-09-2015, 12:07 AM   #52
Senior Member
 
Hogbus's Avatar
 
Fleetwood Owners Club
Join Date: Jun 2014
Location: Lakeway,tx
Posts: 239
Seems simple to me. Have large nest egg in Ira that returns lets say 7%. This is non taxable until I withdraw. If I withdraw 100k for motorme I pay taxes on the withdrawal as ordinary income and lose the 7% income on the 100k. If I finance the coach I pay interest at 4% the loan that is deductible. Thus effective interest is further diluted. The bank is charging mr a much cheaper rate to borrow than to use my own money. It is about money management
And liquidity. My coach,cruiser,some of my cars are financed for these reasons. I could pay cash for all but would take a huge income/tax hit by depleting my growing assets. The collateral is wort what it is financed or paid for. If it is worth more paid for, pay it off before you sell or trade. My 2cents. JD
__________________
Jeff & Steph
2010 Discovery 40x Spartan Cummins ISB
2015 Wrangler Sahara Unlimited
Hogbus is offline   Reply With Quote
Old 07-09-2015, 12:36 AM   #53
Senior Member
 
Mr_D's Avatar
 
Solo Rvers Club
iRV2 No Limits Club
Join Date: May 2011
Location: Vancouver, WA
Posts: 28,538
We have a rather large annuity that we take 5% out every year and never touch the principal. So we use that to make the payments and insurance on the Magna, plus the income tax due. When we die some charity will get another long term donation! Won't leave it to our kids as they'd take it right away and be broke in a year!
__________________
2009 45' Magna 630 w/Cummins ISX 650 HP/1950 Lbs Ft
Charter Good Sam Lifetime Member, FMCA, SKP
RV'ing since 1957, NRA Benefactor Life, towing '14 CR-V
Mr_D is offline   Reply With Quote
Old 07-09-2015, 04:23 AM   #54
Senior Member
 
Shaky's Avatar
 
Vintage RV Owners Club
Ford Super Duty Owner
Join Date: Jan 2015
Posts: 183
I'd pay cash if you have it. Our credit was established years ago and now that we are retired even though we have investments we are still on fixed incomes. Our motorhome was paid for a long time ago and we tend to keep what we own in good shape and run it until it's no longer practical to repair. If and when we replace our motorhome it will be a cash buy. At our age we aren't looking for a 15 or 20 year payment. We would be looking for what would serve us well and we could afford out of pocket.

I actually have a slush fund that I've been putting money into in the event our current rig needs major repairs, or we need to replace it sometime down the line. The house is paid for and has been for quite a while. We paid it off early. Our cars were purchased with cash, no financing. No credit card debt to speak of. We use the cards when we travel and they get paid off when we get home. It's good to be debt free able to feed our beast.

RVs aren't cheap to own or operate. Someone called them a money pit. I consider boats the ultimate money pit, but our RV does require cash infusions now and then. It's the price we pay to do what we really enjoy. Regardless what you decide you have to be comfortable with it. Anything we've ever purchased such as our home was set up so that if one or the other of us were to unexpectedly expire the other could easily keep up with the payments or the cost of living in and maintaining it.

I hope to keep our old gasser until I can no longer travel due to health issues. If that doesn't go as planned it will be another motorhome paid for with cash. The Mrs won't be saddled with anything but finding a buyer if she no longer wants to use it on her own. Do what works for you. It isn't the best of tax write offs and will require monetary transfusions no matter how new it is. If you are young and are claiming it as a second home maybe financing makes sense for you. Your financial advisor would be the one to discuss that with. Whatever you decide to do enjoy your new wheels and have a great life.
__________________
'97 Pace Arrow Vision 36 with Tag Axel, Ford 460 with Banks Power Pack. 2000 Jeep Wrangler Toad, one miniature schnauzer that rules the roost and a wife that enjoys traveling. Retired FTCS (SS) USN and loving it. FMCA#461483
Shaky is offline   Reply With Quote
Old 07-09-2015, 10:53 AM   #55
Senior Member
 
TurtleKent's Avatar
 
Tiffin Owners Club
Winnebago Owners Club
Freightliner Owners Club
Join Date: Feb 2011
Location: The Buckeye State
Posts: 492
Send a message via AIM to TurtleKent
1) I make much wiser financial decisions when I'm spending my own money than I do when I am spending the bank's money. I sleep much better at night.

2) Most RV loans are underwater as soon as you drive the RV off the lot. With a 15-20 year loan, and it's many years before the borrower can get out of the loan without paying additional $$ to the bank. I'm not deceived into thinking I actually 'own' an asset, when actually the bank owns it and I am merely paying the bank monthly for the privilege of holding the keys and driving that same RV. I can't imagine having a payment of $1000-2000/month for an RV that sits in storage for 8-9 months/year.

JMHO, do whatever floats your boat. I appreciate that some people like having RV loans, and I benefitted from that by buying my first two motorhomes as repos at the local auto auction. Great deals for me!!
__________________
Kent & Sue & Pecos
2010 Allegro Bus 43QRP
Formerly 2004 Itasca Horizon 40AD
TurtleKent is offline   Reply With Quote
Old 07-09-2015, 02:52 PM   #56
Moderator Emeritus
 
SarahW's Avatar


 
Fleetwood Owners Club
Ford Super Duty Owner
Join Date: Oct 2011
Location: In a lawnchair
Posts: 11,204
Quote:
Originally Posted by johnsonk555 View Post
Why pay cash for something that will depreciate as soon as you drive it off the lot?
To keep from having an upside down loan against it?
__________________

__________________
.2012 Fleetwood Bounder 33C | 2012 Jeep Wrangler

SarahW is offline   Reply With Quote
Reply



Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Bounder: part time full timing it in the Bounder mojoracing Fleetwood Products Owner's Forum 12 08-19-2015 08:12 PM
1st time RV buyer 2015 Coachmen RV Freelander 32BH or 2014 Thor ACE 30.2 corvfamily Class C Motorhome Discussions 8 08-18-2014 04:11 AM
1st time RV buyer? 2015 Coachmen RV Freelander 32BH Vs. 2014 Thor ACE 30.2 corvfamily Class A Motorhome Discussions 9 08-17-2014 06:50 PM
First real RV, long time campers Wayco New Member Check-In 14 08-04-2014 10:09 PM
First time buyer some questions please illusionist Forest River Owners Forum 5 06-30-2013 09:13 AM

» Virginia Campgrounds

Reviews provided by


Copyright 2002- Social Knowledge, LLC All Rights Reserved.

All times are GMT -6. The time now is 12:54 PM.


Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.