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Old 04-30-2020, 07:44 PM   #1
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Looking to finance a used RV and then this happened.

I am attempting to upgrade from my 17ft Hybrid to a good used Class A MH to attack a future bucket list, I began researching information on financing with banks and or credit unions and etc. Then I stumbled onto this.. UGH. https://youtu.be/zJFbtUTd4T0 Needless to say I have now lost all the wind in my sails. I know you don't buy a MH in the hope of one day selling it to make money or to break even. I believe you buy a motor home to make memories. At least that's what I keep saying to myself. Any thoughts from you folks who may have wrestled with this or how you came to your decision to finance a MH would be appreciated. In a perfect world I would just pay cash and be done with it. I don't live in a perfect world and I don't have tons of cash but I do have A1 credit. And my mailbox is proof as every outfit that loans money fills it with offers. Thank you. P.S. Finding a good used MH is a whole another post.
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Old 04-30-2020, 08:21 PM   #2
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I found for me there was a sweet spot,too new and out of my pricerange,too old and nobody would finance it. I ended up buying a 4 year old gas motor thor(34 ft) in excellent shape with only 10,000 miles on it.paid almost 70 grand and i'm real handy and do all my own work on it.there are plenty of low mileage units out there for sale.
I think banks are a little more forgiving on age if its a deisel,
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Old 04-30-2020, 08:33 PM   #3
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This all depends on how you finance. If you take out a 20 year mortgage on a MH and take 20 years to pay it off, that is a good way to join the broke people. If you finance because you have enough, income, investments or other appreciating assets, sufficient to pay off the loan tomorrow, but you don't want to lose all of that earning power instantly, it might make sense.

Remember, for a $100,000 loan for twenty years, you pay around $150,000, if you have good credit.

You have to consider, if you are still working, can you continue to live and pay off the loan if you lose your job? If all goes well can you pay off the loan in five years? Have you planned for a portion of money in savings for maintenance, repairs, insurance, and any state personal property tax you may have to pay yearly, based on the value of the MH? And gas at 6-8 mpg? $2000- $3000 for a set of tires, when the time comes. Tires should be changed every 5-6 years or so. Some take chances and go longer, but I would not take the risk. Are you going to need another primary vehicle during the course of the loan, for which you will also need financings?

I don't want to discourage you, but there is a lot of thinking and planning for unexpected things or things you may not have considered.
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Old 05-01-2020, 06:57 AM   #4
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If you have assets in a non-IRA account, you may be able to get a very low interest loan against the assets. I received a 2.28% loan against the stocks in my brokerage account (cannot be used to buy more stocks)
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Old 05-01-2020, 11:10 AM   #5
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You have to think of the RV expense like you do a night on the town. An expense that is justified solely by your enjoyment and limited by your disposable income. The interest on the loan is part of the operating expense, just like maintenance, insurance and fuel. Add up all your costs of ownership and determine if you have enough reliable income to burn that kind of money, then ask the question "Is it worth it to me/us?". It is indeed a LOT OF MONEY, but the memories can be PRICELESS. Be honest with yourself: do you get bored easily, maybe always looking for new activities and events? Will the RV become a seldom-used toy in a year or two? Does the family actually have enough playtime to take advantage of RV travel? Is your income steady and reliable, or maybe it's seasonal or driven by economic factors out of your control?


That said, too many people underestimate the total costs and overestimate the value of the memories. If you do, you can dig a financial hole real quick. And real deep as well.
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Old 05-01-2020, 03:36 PM   #6
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I recommend listening very intently to what Dave Ramsey has to say in that video. He’s giving solid advice.

With that said, there are so many variables involved it’s very difficult to advise without having more details of your financial situation, goals, timeline, etc which don’t need to become public.

Good luck with your decision process.
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Old 05-01-2020, 04:04 PM   #7
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Excellent advice

Quote:
Originally Posted by Gary RVRoamer View Post
You have to think of the RV expense like you do a night on the town. An expense that is justified solely by your enjoyment and limited by your disposable income. The interest on the loan is part of the operating expense, just like maintenance, insurance and fuel. Add up all your costs of ownership and determine if you have enough reliable income to burn that kind of money, then ask the question "Is it worth it to me/us?". It is indeed a LOT OF MONEY, but the memories can be PRICELESS. Be honest with yourself: do you get bored easily, maybe always looking for new activities and events? Will the RV become a seldom-used toy in a year or two? Does the family actually have enough playtime to take advantage of RV travel? Is your income steady and reliable, or maybe it's seasonal or driven by economic factors out of your control?


That said, too many people underestimate the total costs and overestimate the value of the memories. If you do, you can dig a financial hole real quick. And real deep as well.
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Old 05-01-2020, 04:09 PM   #8
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Dave Ramsey says live like nobody else so you can live like nobody else.
I say save your money up. Skip the waste like DD coffee and wasting money on restaurants.
Get the full amount of the RV you are going to buy in the bank.
Then buy the RV with cash.

I did that 4 times.
I saved and saved and saved.
No loans, no paying double or triple for a depreciating asset.
Once you get it, use it, use it, and use it.
We take ours everywhere.
Haven’t stayed in a motel in 20 years.
I take it and pull my Jeep. It’s a home on wheels and I use it that way.
I take everywhere I can. The only limit is winter, but I’ve dry camped in winter a few times.
Last year our last trip was Nov 2019, Our first trip this year was end of February to Chattanooga. So we try and get 9. Months of use.
Back in 1999:I bought a Fleetwood Storm 30 H, no slides. $49,000. It’s what I could buy at the time. Same with the rest of them. Never go bankrupt over a house or a RV or a boat.
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Old 05-01-2020, 04:12 PM   #9
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If this helps. We bought a 15 year old unit, paid if off in 2 years, fulltime debt free. And like jeeepz said, he is handy and does all his own work. DYI goes a long way on the affordability side of things. What will I get when I sell it? Don't care. Our coach will have served its purpose.
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Old 05-02-2020, 11:33 PM   #10
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I would also suggest looking into older mid to upper end coaches, preferably buying from a private owner, not an RV dealer who will just mark up the price and add little extra value. If you have good credit interest rates are low, and as long as you finance it over a reasonable time frame I say why not.


After about 5 months of shopping, I bought my current coach in 2016, it is a 2002 Safari Trek 28 ft class A, paid about $22,000 for it and financed over 4 years, I did not have to finance, but choose to vs tax hit I would have taken otherwise. I don't have the exact interest rate in front of me at the moment, but financed over 4 years I am only owing about 1,500 in interest payments, with monthly payments a bit under $500 per month. It will be paid off in a couple of more months, just in time to spend about $2,000 on a new set of tires, though with the lack of travel plans for this year those tires may wait until next spring.


As mentioned above it is important to also account for cost of ownership, in the first 12 months of ownership of my current coach, I had probably spent around $7,500 on the coach counting, repairs, insurance, provisioning, etc. not counting actual camping expenses. This was with doing a lot of the work myself, and having a place to store it under cover for free.



$7,500 may sound like a lot, but keep in mind this counted no major repairs, though I did splurge on several optional upgrades in there. I bought the coach about a thousand miles from home, and spent over $500 in the first 2 days of the drive home, much of it at Wal-Mart on such things as sheets, pillows, towels, pots and pans, etc. From there another $800 went to insurance, $750 to dash air conditioner repair the next spring, $350 or so flushing all the fluids, $150 on new spark plugs and plug wires, $200 on a new backup camera (old one had moisture in the lens), ... it all adds up.


So far this year is shaping up to be the cheapest yet, excluding insurance I have spent less than $250 on the motorhome, of course it has not moved out of its shed since November as given the world situation our planned trip to New Orleans in March was cancelled. Of course part of the fun of motorhome ownership is things break just while sitting, I cranked the engine on mine a few weeks ago just to be surprised by a loud squeal, turns out the bearings on the dash air blower motor were failing, so $45 (and a few weeks of shipping delay thanks to Amazon) later, I have a new blower fan installed.
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Old 05-03-2020, 05:45 AM   #11
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I would never finance an Rv. A used pickup and travel trailer is comfortable and will not be much of a loss when sold. Regardless of the equipment we’re all doing the same thing.
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Old 05-03-2020, 05:13 PM   #12
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I just financed my 100,000 dollar RV. Although I had the cash and could have paid it in full, I didn't want to lose all that cash. So I financed for 20 years, but I went to Dave Ramsay's early mortgage calculator to see how much extra I could pay towards the principle to pay it off in 3-4 years. If I do so, as I fully plan to, I will save about 60 grand in interest.
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Old 05-03-2020, 06:38 PM   #13
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Nothing wrong with financing an RV. Really not much of a difference between financing or paying cash.
You either pay interest expense or lose investment income.
As long as you have decent credit and keep to a reasonable budget relative to your income.
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Old 05-03-2020, 07:45 PM   #14
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Quote:
Originally Posted by Miamicamper View Post
I just financed my 100,000 dollar RV. Although I had the cash and could have paid it in full, I didn't want to lose all that cash. So I financed for 20 years, but I went to Dave Ramsay's early mortgage calculator to see how much extra I could pay towards the principle to pay it off in 3-4 years. If I do so, as I fully plan to, I will save about 60 grand in interest.


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