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07-29-2016, 11:48 AM
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#1
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Senior Member
Join Date: Jul 2016
Posts: 2,009
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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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07-29-2016, 12:38 PM
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#2
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Senior Member
Entegra Owners Club
Join Date: Jul 2015
Location: Central Florida
Posts: 529
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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
__________________
2020 Entegra Anthem 44W
2012 Entegra Anthem 42RBQ - Sold
2005 Beaver Monterey - Sold
2016 Jeep Cherokee
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07-29-2016, 12:46 PM
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#3
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Senior Member
Join Date: May 2011
Location: PNW
Posts: 220
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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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07-29-2016, 12:47 PM
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#4
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Senior Member
Winnebago Owners Club Workhorse Chassis Owner
Join Date: Aug 2007
Location: Sonoma County, CA
Posts: 6,401
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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.
__________________
Wayne & Roberta
08 Winnebago Destination 39W Gas UFO Workhorse Chassis......It's really weird being the same age as old people. I thought getting old would take much longer.
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07-29-2016, 12:58 PM
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#5
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Senior Member
Country Coach Owners Club Solo Rvers Club iRV2 No Limits Club
Join Date: May 2011
Location: Vancouver, WA
Posts: 37,725
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For us it worked out better to finance the Magna than to take the money out of our annuity.
__________________
2009 45' Magna 630 w/Cummins ISX 650 HP/1950 Lbs Ft, HWH Active Air
Charter Good Sam Lifetime Member, FMCA,
RV'ing since 1957, NRA Benefactor Life, towing '21 Jeep JLU Rubicon Ecodiesel
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07-29-2016, 01:10 PM
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#6
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"Formerly Diplomat Don"
Newmar Owners Club
Join Date: Apr 2005
Location: Moorpark, Ca.
Posts: 24,076
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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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Don & Mary
2019 Newmar Dutch Star 4018 (Freightliner)
2019 Ford Raptor
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07-29-2016, 01:39 PM
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#7
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Senior Member
Join Date: Jul 2016
Posts: 2,009
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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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07-29-2016, 01:59 PM
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#8
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Community Administrator
Tiffin Owners Club
Join Date: Sep 2013
Location: DFW, Texas
Posts: 21,517
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Quote:
Originally Posted by Wundertaker
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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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.
__________________
2017 Phaeton 40IH XSH Maroon Coral - Power Glide Chassis with IFS
Previous '15 Tiffin Allegro RED 38QRA and '06 Itasca Sunrise 35A
'16 Jeep JKU Wrangler Sahara or '08 Honda Goldwing
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07-29-2016, 02:17 PM
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#9
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Senior Member
Ford Super Duty Owner
Join Date: Jul 2012
Location: Port Orange, Fl
Posts: 884
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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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07-30-2016, 11:29 AM
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#10
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Moderator Emeritus
Join Date: Jan 2000
Location: West Palm Beach, FL. USA
Posts: 27,676
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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.
__________________
Gary Brinck
Former owner of 2004 American Tradition and several other RVs
Home is West Palm Beach, FL
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07-30-2016, 11:55 AM
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#11
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Senior Member
Join Date: May 2015
Location: Silver Spring, MD
Posts: 602
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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.
__________________
2022 Imagine 22 MLE
2022 F150 Powerboost wi 7.2 KW
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07-30-2016, 03:17 PM
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#12
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Member
Join Date: Apr 2014
Location: Greensboro NC
Posts: 38
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Financing purchase of a RV
We used Bank of the West and got favorable interest rate and terms.
__________________
Bill P
2004 HR Scepter/2014 CR-V
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07-30-2016, 03:21 PM
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#13
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Senior Member
Join Date: Apr 2015
Posts: 149
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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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