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Old 08-04-2016, 09:58 PM   #71
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Let's all agree that a motorhome is a purchase that will depreciate overtime no matter if it was paid for in cash, financed, won in a lottery drawing or received as a gift from a long lost uncle. With that said the depreciating asset is much like anything we buy for pleasure and fun-a good meal, fun movies, trip to Hawaii etc. Over the life of the purchase we hope to exchange the cost for pleasure. The only difference is how we pay for it. If we pay cash we loose the ability for that money to work for us and be available for emergencies etc. and that "feel good" feeling of paying cash has a cost. Today's dollars are more valuable than tomorrow's dollars. If the cost of money is low and you have some tax benefits than it makes more financial sense to pay with future dollars and put that money to work for you. In my case I let the earnings from a small international index fund make the payments for me. The fund has not dropped in 3 years and I still have access to the fund.
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Old 08-04-2016, 10:20 PM   #72
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I narrowed it down to USAA or Essex. The dealer actually beat Essex, but not USAA. The two things I learned buying an RV that are completely backwards to buying anything else on a loan are... 1) You have to borrow over $100K to get the best rates, and 2) You have to be willing to go LONG on the loan (20 years in my case).

USAA gave me the best rate of 3.99% at 20 years on $100,000 or more. If I paid more down, and it went under $100K, the rate went up, and the number of years went down. But if I kept it above $100K, and did only 10 years, the rate also went up. Say what? In the end, I financed just over $100K for 20 years to get the rate of 3.99%. Essex wanted 4.35%, and the dealer was 4%. Credit score was about 815.

Checked 3 local credit unions, and they were around the 5-8% range. No way!
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Old 08-04-2016, 10:27 PM   #73
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I charge absolutely everything I possibly can on a CC. To include part of the down payment on my coach. Why? Because I get 1-3% cash back on every dollar spent. Beats every savings account in America, and many investments. And it's money I cannot invest anyway, so why not make some extra on it?

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Indeed. I saved up and paid cash for my unit. I don't do credit cards either. Different strokes of course.
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Old 08-05-2016, 05:13 AM   #74
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Hey Ifly, I thought USAA would only go 15 years? Have they changed?
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Old 08-05-2016, 10:04 AM   #75
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If you finance a play toy (RV, motor cycle etc) you should not buy it.
There's always this guy.
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Old 08-05-2016, 09:59 PM   #76
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I guess so. I know that as I tried to reduce total interest paid out by lowering the note to 15 or preferably 10 years, the interest rate actually went up. I think it was 4.25% at 15, and 4.35 or higher at 10 years. As I said above, the best rate I could obtain was 3.99% by extending it out to 20 years, and ensuring the loan was over $100K.

Of course, there is no penalty for early payments, and that we certainly intend to do!

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Hey Ifly, I thought USAA would only go 15 years? Have they changed?
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Old 08-06-2016, 12:44 AM   #77
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I used to go to the dunes with a group throughout the 90s that would buy new mohos every few years on credit and invest their money. In 2000 most lost their mohos and at least half their money. It's a great idea until it isn't. I'm not against using credit to buy one and that's a great rate, just hate to pay 20 years on a toy and the tax.
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Old 08-06-2016, 06:34 PM   #78
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There's always this guy.
This is about Math vs. Emotion! It's the same with a mortgage! There are people who definitely benefit to having it paid off, like if you on a fixed income, or you get the maximum tax deductible already, and sometimes it is nothing more than having peace of mind! But if you still have a large income and have investments that far exceed the cost of the money to borrow, that is where Math wins out every time. Over a long period like 10 or 15 years, it will be a lot of money. Regards
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Old 08-08-2016, 06:23 PM   #79
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This is about Math vs. Emotion! It's the same with a mortgage! There are people who definitely benefit to having it paid off, like if you on a fixed income, or you get the maximum tax deductible already, and sometimes it is nothing more than having peace of mind! But if you still have a large income and have investments that far exceed the cost of the money to borrow, that is where Math wins out every time. Over a long period like 10 or 15 years, it will be a lot of money. Regards
No, I don't think Math vs. Emotion was the case with the post I was referring to.

Dutchstar08's post was very judgmental. "If you finance a play toy (RV, motor cycle etc) you should not buy it."

My impression is this is about someone bragging that he doesn't have to finance his toys.

There are many people who make a conscious decision to finance, whether or not there is a need. There are also a lot of people who would not have any toys at all if they had to wait until there was enough in the bank to buy it outright. Think teachers, social workers, first responders, etc.

My personal feeling is there is no reason to make a judgmental comment such as the one Dutchstar08 made. It added nothing to the discussion. But there frequently (always?) seems to be one of these posters every time there is a discussion about financing.
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Old 08-08-2016, 06:47 PM   #80
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Remember, you can't take it with you when you die. Spend what you want on what you want, even if you have to make payments, you earned it. Enjoy

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Old 08-08-2016, 10:21 PM   #81
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Not only that, but in certain circumstances, financing it can provide a tax benefit that paying cash would not. Particularly if someone cannot afford to pay cash for an object.
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Old 08-09-2016, 12:03 AM   #82
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Pulled the trigger.Financed it. Brought her home. Smiling.

I don't know if I updated or not but... we did it. We finally pulled the trigger and bought a 2016 Newmar Baystar...whoop! whoop! We are heading out on (quite) a shakedown trip this weekend including over 3000 miles with our family of 5. Can't wait.

When I posted this I didn't know it would be this interesting of a thread. I thought 20 year loans were very common. Anyway we did secure a 20 year loan @ 3.99% interest. I am thrilled. My husband, the financial advisor, is cautiously optimistic about this decision. We could've paid cash for this- but wanted the $$$ to work for us. He's taking the 98K out of our savings and is going to invest it. With a very modest rate of return 6% let's say. ....We are making 6K/year. Our $595/ monthly payment: after tax savings- writing off the interest of approx $300/ month to the tune of a 45% tax bracket- results in a net payment of about $460...the return on our investment is paying the payment and then some. Meanwhile we have enough money in the bank to pay off this "toy" at any moment. My husband doesn't like debt, but we are relatively young (turned 40 this year) and have many years ahead of us (God willing) to make our money grow, and also to recover if things did go south. 100K seemed like a lot for us to just plunk down all at once.

Different strokes for different folks. One thing we can all hopefully agree on is an RV is a great backdrop for family memories!
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Old 08-09-2016, 05:31 AM   #83
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One thing we can all hopefully agree on is an RV is a great backdrop for family memories!
and congrats, hope you enjoy your many hours of family fun in your new RV
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Old 08-09-2016, 05:46 AM   #84
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Sounds like a plan jewels! Good for you guys, the Bay Star is a very nice coach and will give you years of good family fun. Where did you get the 3.99%? The only place I've seen that rate is USAA.
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