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Old 08-24-2019, 09:57 PM   #1
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What to do if you are upside down on your RV loan? Falling RV values.

Just wondering if anyone has experience with this situation. I know some people who have taken out 15 or 20 years financing and have many years left on the loan, but, they want to sell....

And, they are discovering that their payoff amount exceeds the value of the RV......

I suppose I'm going to have to tell them that they might as well keep the RV and just make the payment or have to raise the money to pay the loan off.

It seems that the recession will depress the value of RV's even further.

This doesn't seem like a good time to sell an RV.
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Old 08-25-2019, 06:09 AM   #2
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tough situation.

sad to hear it.

but i suspect it is common situation.

what do you tell them?

pay the loan!
or
sell the coach and quit going to starbucks and on cruises till they get the loan paid off....
or
sell their jeep grand cherokee and their race boat and use equity to bring loan to manageable levels...
or some combination of the above.

or
ask their friends who are generous and worked hard and lived within their means to give them $$
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Old 08-25-2019, 06:40 AM   #3
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It's very common today. People get starry eyed and have to have the best and newest without giving thought to depreciation is happening faster than the payments can keep up with.
What will an RV be worth at the end of a 20 year mortgage? Probably less than the sales tax that was financed into the final deal.
The same holds true for new cars and trucks in today's market. Buying a new well equipped 1/2 ton pick up will run you nearly $50,000 now. Financing for 8 years will still create a high payment amount to live with and at the end of the payments you have a vehicle worth next to nothing and have had to spend cash on it for maintenance for the length of ownership.
Too many folks get caught up in the "only so much per month" syndrome without looking ahead to where they will be later on. This is one reason you don't see many single wage earner families anymore.
Checked your grocery bill lately?
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Old 08-25-2019, 06:41 AM   #4
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What to do if you are upside down on your RV loan? Falling RV values.

I speak from previous experience, if you had done a little more homework before you entered the RV world, you wouldíve seen the depreciation on these things are an absolute disaster. Always has been. IMHO it is better these last two years than it ever has been, but still terrible. And the newer the unit you are considering the worse the financial loss will be.

Find a cherry,older rig and put a lot down, is the best plan. Once you are in one your fate is sealed.
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Old 08-25-2019, 06:52 AM   #5
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Quote:
Originally Posted by MWeiner View Post
Just wondering if anyone has experience with this situation. I know some people who have taken out 15 or 20 years financing and have many years left on the loan, but, they want to sell....

And, they are discovering that their payoff amount exceeds the value of the RV......

I suppose I'm going to have to tell them that they might as well keep the RV and just make the payment or have to raise the money to pay the loan off.

It seems that the recession will depress the value of RV's even further.

This doesn't seem like a good time to sell an RV.
It seems the only viable option is to find the money to pay the balance after selling it -- borrow on life insurance, second mortgage on the home, borrow against 401k, etc.
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Old 08-25-2019, 06:55 AM   #6
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Find a cherry,older rig and put a lot down, is the best plan. Once you are in one your fate is sealed.
Almost 9 years ago we paid cash for what was then a 10 year old Beaver in exceptionally good condition. We paid ~30% of its original MSRP. Since then we've put >65k miles on it and have made all sorts of improvements (and some repairs).

But even with everything we've paid for, our total investment is still less than 60% of the original MSRP and way, way less than the cost of an equivalent new, high quality DP. Furthermore, we have an agreed value policy with Progressive that would provide us 70% of our original purchase price in the event it was totalled. That's on a 19 year old MH!! And that policy is renewable for another 8 years, if we wish.

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Old 08-25-2019, 07:02 AM   #7
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No different than a house or a car. With the ridiculously long finance period available today on rv's and cars it is very common. Not only does the bank get to take a bucket full of extra interest payments you are stuck until you either pay it down or foot the bill for the difference.
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Old 08-25-2019, 07:08 AM   #8
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Like most other luxury items in life, if you have to borrow to buy, you shouldn't be buying.

Debt is the harsh reality of playing a game you can't afford to lose, but ultimately will. It's the American way of living because we've been convinced that we deserve it "all", when in fact most Americans don't have a pot to piss in or a window to toss it out.


Stay well.
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Old 08-25-2019, 07:14 AM   #9
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From the Insurance side of all this...

Do you know why more RV(s) burn down rather than blow away?

Have you ever tried to start a tornado?
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Old 08-25-2019, 07:25 AM   #10
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Quote:
Originally Posted by MWeiner View Post

...

It seems that the recession will depress the value of RV's even further.

This doesn't seem like a good time to sell an RV.

What recession are you referring to ?


.
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Old 08-25-2019, 07:41 AM   #11
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What recession are you referring to ?


.
I was wondering the same thing. Also, with full employment and more jobs available than can be filled, this has to be the best time ever to sell.

But what do I know, I took 6 months to find just the right coach at 5 years old, that the owners thought was riddled with problems that they had no way to fix, but were actually small issues if you're handy.

I gave the guy cash, less than half the original MSRP, and we have been good to go the past 5.5 years. The only advise I could give to someone that would take out a 15 to 20 year loan on an RV is pay what Dave Ramsey calls your stupid tax, and learn from the experience.
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Old 08-25-2019, 08:24 AM   #12
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Any RV is a depreciating value asset. You are much better off buying a higher end used unit over anything new. The new units depreciate heavily the minute you leave the lot.

If you buy new, negotiate the absolute lowest price you can get and put down at least 30% on the load. Keep the loan term to a maximum of 10 years.

For most, RVs are a luxury item.

Ken
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Old 08-25-2019, 08:39 AM   #13
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What recession are you referring to ?


.


Great point. Word of mouth is a great way to initiate a recession.
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Old 08-26-2019, 07:36 AM   #14
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Great point. Word of mouth is a great way to initiate a recession.
Why on earth would anyone want to do that?
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