Financing The New RV

[Bama12]

We have found the perfect RV now need to finance it. It is new from a dealer but they only have auto type financing and I need a longer term. What companies have you folks had good and bad experiences with?

[rowiebowie]

Originally Posted by Bama12

We have found the perfect RV now need to finance it. It is new from a dealer but they only have auto type financing and I need a longer term. What companies have you folks had good and bad experiences with?

Did you loose track of your earlier thread?

http://www.classbforum.com/forums/f5...w-rv-9157.html

[engnrsrule]

Check your options involving home equity line of credit. Also be aware that some lenders can call your loan if you rent the unit out.

[Cryptofit]

Credit unions will give you a better rate especially if you sign up for a bank account with them.

[ld1555]

If you're a veteran go to USAA.

[Roadie1]

Don’t finance it! RV’S depreciate like crazy. Save up and pay cash or buy used. It’ll make those drives down the road so much sweeter!

[RossWilliams]

Waiting for something until you save up for it is certainly cheapest financially. But you give up the use of it while you wait. You will never recover the value you have lost. You won't get that time back, its gone forever.

So yes, RV's and other similar purchases ARE investments. You will recover the cost as you get use out of it over time, not when you sell it.

[avanti]

Originally Posted by RossWilliams

Waiting for something until you save up for it is certainly cheapest financially. But you give up the use of it while you wait. You will never recover the value you have lost. You won't get that time back, its gone forever.

So yes, RV's and other similar purchases ARE investments. You will recover the cost as you get use out of it over time, not when you sell it.

The flaw in this argument is the hidden assumption that the "while you wait" time is wasted. If your only goal in life is owning an expensive B-van, and you plan to twiddle your thumbs while you wait, then fine. But there are plenty of other wonderful ways to spend your time while you wait and save. Camp in a tent, get a little Scotty trailer, splurge once in awhile and spend a few nights in Old Faithful Lodge rather than the campground (which you are unlikely to do once you own an expensive van). Those times will be cherished, not "gone forever". Use the long-term goal as a motivation, and the money will accumulate soon enough.

I've always believed that there are two kinds of people: cash people and credit people. The differences are (a) it takes cash people a few extra years to get to any given level of consumption; and (b) it costs 20% more to be a credit person (and so in the long run, you will be able to afford 20% less stuff). I would NEVER purchase a luxury item for which I couldn't pay cash.

Calling a vehicle purchase an "investment" by any meaningful sense of that term is delusional.

[booster]

Originally Posted by avanti

The flaw in this argument is the hidden assumption that the "while you wait" time is wasted. If your only goal in life is owning an expensive B-van, and you plan to twiddle your thumbs while you wait, then fine. But there are plenty of other wonderful ways to spend your time while you wait and save. Camp in a tent, get a little Scotty trailer, splurge once in awhile and spend a few nights in Old Faithful Lodge rather than the campground (which you are unlikely to do once you own an expensive van). Those times will be cherished, not "gone forever". Use the long-term goal as a motivation, and the money will accumulate soon enough.

I've always believed that there are two kinds of people: cash people and credit people. The differences are (a) it takes cash people a few extra years to get to any given level of consumption; and (b) it costs 20% more to be a credit person (and so in the long run, you will be able to afford 20% less stuff). I would NEVER purchase a luxury item for which I couldn't pay cash.

Calling a vehicle purchase an "investment" by any meaningful sense of that term is delusional.

Yep, us too. I have never driven a car that I couldn't pay cash for, so I drove old and/or small and still do, as I have better things to do with that money. Were totally going to buy a used van as a first van to reduce risk of not liking the whole class b thing and to prevent depleting "fun" stashed money. As it turned out while we were looking and researching the recession hit and we got a new, on the lot a long time, unit for barely more than a used one. Depreciation risk was very much reduced at that price. It was a bit earlier than we had planned on buying, but it all worked even better that way as it gave us more time to figure out how it all worked.

[Bud]

Originally Posted by booster

Yep, us too. I have never driven a car that I couldn't pay cash for, so I drove old and/or small and still do, as I have better things to do with that money. Were totally going to buy a used van as a first van to reduce risk of not liking the whole class b thing and to prevent depleting "fun" stashed money. As it turned out while we were looking and researching the recession hit and we got a new, on the lot a long time, unit for barely more than a used one. Depreciation risk was very much reduced at that price. It was a bit earlier than we had planned on buying, but it all worked even better that way as it gave us more time to figure out how it all worked.

IMO, this is becoming silly.

Unless someone knows the op's financial circumstances, there can be no opinion about financing.

Yes, and it ok, to discuss financing rv's, boats, houses,...............

I've had 3 loans in my life, all made financial sense. About 45 years ago one minimum payment with a credit card, one house 39 years ago, one vehicle 6 years ago (not rv). If I buy a new Crossfit, I'll be looking for the lowest cost loan just like the op here. Why? Cash WILL cost more given my financial circumstances even though I can come up with the cash, that cast will cost more.

There are a variety of financial circumstances where financing makes sense. Many, most do not make financial sense, some do.

[avanti]

Originally Posted by Bud

There are a variety of financial circumstances where financing makes sense. Many, most do not make financial sense, some do.

Nobody said that borrowing money never made sense. What I said was:

I would NEVER purchase a luxury item for which I couldn't pay cash.. (emphasis added)

[RossWilliams]

Of course its silly. There is no good reason people shouldn't borrow for things that they will use in the future while they are making payments on the money they borrowed. Its called paying as you go. It may cost you more, but you get the use of the thing when you need/want it. Its becomes an investment when you are still using it long after the payments stop.

And, as you point out, paying cash can end up being more expensive. That is especially true for people with savings tied up in tax deferred retirement accounts. For the past decade it has been true for anyone who left that cash in the stock market.

[booster]

Originally Posted by Bud

IMO, this is becoming silly.

Unless someone knows the op's financial circumstances, there can be no opinion about financing.

Yes, and it ok, to discuss financing rv's, boats, houses,...............

I've had 3 loans in my life, all made financial sense. About 45 years ago one minimum payment with a credit card, one house 39 years ago, one vehicle 6 years ago (not rv). If I buy a new Crossfit, I'll be looking for the lowest cost loan just like the op here. Why? Cash WILL cost more given my financial circumstances even though I can come up with the cash, that cast will cost more.

There are a variety of financial circumstances where financing makes sense. Many, most do not make financial sense, some do.

Of course all circumstances are different, and I spoke about us and our way of doing it. The OP may look at it differently and not be uncomfortable with financing and thinks it is worth to have the RV now. We financed the house (2 of them), also, as the rent/own balance justified it. If I needed a new car because I was putting on 50K a year to keep a good job, sure it makes sense if the option is no job. Especially for necessities like housing or transportation, you know that the costs are coming a long ways ahead, so planning is much easier.



Is buying an RV different? For us it would be totally not the same as a house or even necessary vehicle to survive and work. Basically a luxury so then the balance is really only monetary vs fun factor and everyone's idea of that will be different. Immediate gratification vs more later, just like we have all seen in the kids and marshmellow tests so many times. The goal for us is to have as many marshmellows as we want and need without missing out on anything important or that we want to do.



There certainly is a lot of middle ground between the person who dies with $2 million in the bank but never did anything he wanted to, and the one who brags about all the new stuff he got one week and few weeks later is complaining about all the payments or getting it repossessed. Moderation is the key for either end.

[Bud]

Originally Posted by avanti

Nobody said that borrowing money never made sense. What I said was:

I would NEVER purchase a luxury item for which I couldn't pay cash.. (emphasis added)

There are folks that do borrow for a 'luxury' item because they can make money with the borrowed money, more than it costs them after taxes and whatever expenses.

Again, nothing wrong with the discussion. But here is a quote from this discussion: "Don’t finance it! RV’S depreciate like crazy. Save up and pay cash or buy used. It’ll make those drives down the road so much sweeter!" The point is you can't make that kind of categorical statement without knowing someone's financial circumstances."

avanti, you said a little more than above: "I've always believed that there are two kinds of people: cash people and credit people. The differences are (a) it takes cash people a few extra years to get to any given level of consumption; and (b) it costs 20% more to be a credit person (and so in the long run, you will be able to afford 20% less stuff). I would NEVER purchase a luxury item for which I couldn't pay cash."

The first part could be quite false for someone or not apply at all. The money borrowed enables the person to make more money than the cost of the loan. It does not have to be an RV, it could be anything used to borrow money, even someone's reputation.

Borrowing money should save or make more money. Buying, financing a new suit to interview for a job could be an example of making money. Continuing to finance new clothes usually does not make financial sense, but it could.

[avanti]

Originally Posted by Bud

There are folks that do borrow for a 'luxury' item because they can make money with the borrowed money, more than it costs them after taxes and whatever expenses.
...

Borrowing money should save or make more money. Buying, financing a new suit to interview for a job could be an example of making money. Continuing to finance new clothes usually does not make financial sense, but it could.

Although, I agree that there are times when borrowing money makes sense, IMO conflating the decision to buy an RV with the wholly-independent decision of whether your current financial situation calls for the use of borrowed money is dangerous in the extreme. We are all subject to bounded rationality and I am very skeptical that very many of us can properly separate the emotion involved in the Call of the Open Road with a completely independent, coldly-rational calculation about ROI vs interest rates.

If you think you should buy an RV, decide what you can afford and buy it.

If you think you should borrow money, look around at your potential collateral, and pick the best one for the purpose. If that turns out to be your RV, so be it. But color me skeptical that that will be the correct answer very often.

Combining the two will frequently lead to irrational decisions.

I am bored with this discussion. Over and out.

[Bud]

Originally Posted by avanti

Although, I agree that there are times when borrowing money makes sense, IMO conflating the decision to buy an RV with the wholly-independent decision of whether your current financial situation calls for the use of borrowed money is dangerous in the extreme. We are all subject to bounded rationality and I am very skeptical that very many of us can properly separate the emotion involved in the Call of the Open Road with a completely independent, coldly-rational calculation about ROI vs interest rates.

If you think you should buy an RV, decide what you can afford and buy it.

If you think you should borrow money, look around at your potential collateral, and pick the best one for the purpose. If that turns out to be your RV, so be it. But color me skeptical that that will be the correct answer very often.

Combining the two will frequently lead to irrational decisions.

I am bored with this discussion. Over and out.

Hey, even though you're bored, I'll mention that I agree with all of the above.