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Old 05-15-2012, 04:32 PM   #15
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If you finance, look into gap insurance, for the difference on what you owe to what it's worth.
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Old 05-16-2012, 06:39 AM   #16
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If you finance, look into gap insurance, for the difference on what you owe to what it's worth.
MAJOR DITTO! Unless you are going to put 50% down...
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Old 05-16-2012, 07:23 AM   #17
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Remember that the value of an RV drops like a rock, the minute it is rolled off the lot. Look at the NADA Guide for values on 1 and 2 year old RVs to get an idea.

Ken
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Old 05-26-2012, 01:10 PM   #18
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Many Class C have a u-shaped dinette.
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Old 06-07-2012, 06:06 PM   #19
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Remember that the value of an RV drops like a rock, the minute it is rolled off the lot. Look at the NADA Guide for values on 1 and 2 year old RVs to get an idea.

Ken
Bang on Ken. I thought the banks and other lenders learned their lessons last time around and were no longer stupid enough to lend based on 20 or 30 year loan amortization and then risk getting caught in a repeat of what we just went through. If they are doing it again I wonder if the manufacturers are so pressed for sales that they are standing behind the loans? No prudent lender should advance even 70% of cost for a MH on a 20 year loan without a pile of other security (like your house, cars, etc.). A home is one thing - a vehicle that depreciates rapidly is another thing.

You chaps south of our border have had a big benefit in this to date and that is interest deductibility - in Canada we haven't allowed that and never will. I know that I'd be really po'd to find my neighbour bought a $1.5 million Marathon and only put down $300k and borrowed $1.2 million and is now getting a tax break for the huge interest payments.

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Old 06-07-2012, 08:30 PM   #20
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The tax break ain't that great!!! Don't let the RV salesmen (or real estate agents) fool you. The average person gets back less than 10 cents on the dollar. That is, pay $100 to the loan company & Uncle Obama will give you only $10 back. Not a good deal unless you're the loan company.
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Old 06-07-2012, 08:50 PM   #21
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The tax break ain't that great!!! Don't let the RV salesmen (or real estate agents) fool you. The average person gets back less than 10 cents on the dollar. That is, pay $100 to the loan company & Uncle Obama will give you only $10 back. Not a good deal unless you're the loan company.
Well, I thought you could deduct the full amount of the interest. If that is the case then 10 cents on the dollar means you aren't paying much tax to start with which may mean one has a lot of strange exemptions or has little income to start with. Surely that is not the case across the board is it?

If it is not a lot, then why are various associations of owners and manufacturers and retailers making submissions to Washington to try and keep the deduction?
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Old 06-07-2012, 09:10 PM   #22
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I pay way too much tax!!!

You are correct. You do enter the full amount of the interest paid as a deduction on Schedule A. However, it is not treated as a credit (i.e., the amount does not come off dollar for dollar from the bottom line). It goes into your deductions. Your deductions then reduce your taxable income. This, in turn, reduces your tax paid. But, to be clear, if you had claim $5000 in paid interest, your taxes are not reduced by that same $5000 amount. You do get some benefit just not the full $5000 amount.

If you use an online tool such as TurboTax, you can actually check the exact amount that a mortgage interest deduction netted you. Simply delete the mortgage interest amount. See what the tax liability is. Then reenter the mortgage interest amount. See what that tax liability is. Subtract A from B. If you use a tax service or CPA, they could do the same thing.

The various interested parties want to keep this particular tax break because people don't truly understand it but it encourages continued spending.
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Old 06-07-2012, 09:25 PM   #23
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I guess too much tax is a matter of opinion. But anyone who is only at a marginal rate of 10% is not, in my books, paying too much tax.

The guy with the Marathon on Prevost for $1.5 million is not likely in that bracket. But then again, maybe he is living on capital gains and is paying a much lower rate. You kind of feel sorry for him. NOT.
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Old 06-08-2012, 06:10 AM   #24
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Remember that the value of an RV drops like a rock, the minute it is rolled off the lot. Look at the NADA Guide for values on 1 and 2 year old RVs to get an idea.

Ken
The general rule of thumb is that an RV drops 40 to 45% of it's MSRP as soon as the paperwork is done. IE your shiny new RV you just ordered and signed papers for two hours on even though it hasn't been built had an MSRP of $100,000.00 at the moment you signed the papers it is worth $60,000.00 to $65,000.00 (this is a retail generalization and doesn't include any options you add later which only give pennies on the dollar.)
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Old 06-08-2012, 08:11 AM   #25
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The deduction is as a "second home"; defined as anything with sleeping, cooking and bathing facilities. Boats, RV's, Camping Vans, and cottages in the woods may qualify for the interest deduction from a loan if they meet the qualifications.

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...The various interested parties want to keep this particular tax break because people don't truly understand it but it encourages continued spending.
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Old 06-08-2012, 08:11 AM   #26
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The general rule of thumb is that an RV drops 40 to 45% of it's MSRP as soon as the paperwork is done. IE your shiny new RV you just ordered and signed papers for two hours on even though it hasn't been built had an MSRP of $100,000.00 at the moment you signed the papers it is worth $60,000.00 to $65,000.00 (this is a retail generalization and doesn't include any options you add later which only give pennies on the dollar.)
But comparing the decline to $100k really makes no sense since no one pays that price. Our last purchase this past year was a new 41 ft destination trailer to sit on a lot in Florida next to our park model and the discount from list was 29%. So using your example the gap wouldn't be all that wide. Why any lender would put a 20 year loan on for perhaps 90% of purchase price is what puzzles me. Not very prudent on the part of the lender unless it gets a lot of other collateral.
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Old 06-10-2012, 07:19 AM   #27
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But comparing the decline to $100k really makes no sense since no one pays that price. Our last purchase this past year was a new 41 ft destination trailer to sit on a lot in Florida next to our park model and the discount from list was 29%. So using your example the gap wouldn't be all that wide. Why any lender would put a 20 year loan on for perhaps 90% of purchase price is what puzzles me. Not very prudent on the part of the lender unless it gets a lot of other collateral.
I was using 100k as an easy number. No you wont pay 100k unless you are getting a spectacular rig but the 40 to 45% drop is based off MSRP not what you paid for it. So IE You look at a fully decked out Class C MSRP 100,000.00 you negotiate the price down to 70,000.00 + taxes, title, tags and dealer fees. The 40 t0 45% drop comes off MSRP and that is based on retail not trade in value which will be lower. Don't worry about what the coach will be worth after you buy it because if you use it well you wont have to worry about it anyway. The only thing you need worry about is Gap insurance so if you total your coach or it catches fire your insurance may only give you 70% of what you owe and the gap will cover the rest.
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Old 06-10-2012, 08:43 AM   #28
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If you look all you have done is state the same thing I just stated above. As to the insurance, any idiotic lender who will lend for 20 years on an RV (given the experience of the past 5 years) might also be stupid enough to fail to recognize the need for insurance to protect them (with a rider making the policy payable to them in the case of total destruction). I don't know what lenders in the US are doing now with respect to insurance (or in Canada for that matter) since we paid cash for all five motorhomes we've purchased. Thus, the insurance we carry is based on our view of our needs.

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I was using 100k as an easy number. No you wont pay 100k unless you are getting a spectacular rig but the 40 to 45% drop is based off MSRP not what you paid for it. So IE You look at a fully decked out Class C MSRP 100,000.00 you negotiate the price down to 70,000.00 + taxes, title, tags and dealer fees. The 40 t0 45% drop comes off MSRP and that is based on retail not trade in value which will be lower. Don't worry about what the coach will be worth after you buy it because if you use it well you wont have to worry about it anyway. The only thing you need worry about is Gap insurance so if you total your coach or it catches fire your insurance may only give you 70% of what you owe and the gap will cover the rest.
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