Do You Finance Your RV or Purchase Cash

[wicked1]

Just wondering if people finance their RV's or only purchase with Cash?

I am trying to see if it is worth it to finance my new one or not and keep cash in the bank. This is just a thread of curiosity as I know it depends on financial situations


2014 F150 FX4 Crew 4X4 EB
2015 Roo 23IKSS

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[RSchleder]

Paid cash for our last 3 units. Like most folks, when the kids were young or in college, we financed our cars, RV's, and home. Time and personal situations change and as they say--"Ya gotta do what ya gotta do". Each family/individual will need to use whatever means works for them based on their "point in life" as well as financial situation. There certainly is no one size fits all when it comes to purchasing large ticket items!
Rate of return on savings/investments vs loan interest rates will also be a decision factor by many folks.

[DaveSchwartz]

If you have both the cash and the credit available then it comes down to a calculation of whether it will cost you more to use someone else's money (interest on the loan) than the return you would get in some other form of investment. In addition, there is potential lost opportunity cost (having your money tied up and not available for other needs or opportunities). Plus, an RV is always a depreciating asset and you might be able to use your money for an appreciating asset. Essentially, consider under which strategy you will be farther ahead at the end of the potential finance period.

Like the above reply, it all depends on your individual circumstances.

[5er_tom]

We finance. Low interest rates plus the RV qualifies as a second home so the interest is a deduction on our taxes.


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[bob caldwell]

Paid cash...plan on spend'n it before someone else does

[Dogpatch]

I use my line of credit.

Lower interest rate. Not locked into any term. No payout penalties.

[youroo]

I refinance 3 times then file Bankruptcy ! Youroo!!

[GOTTOYS]

Financed over 5 years with a reasonable down payment. We were never upside down on the loan and could have payed it off at any time or sold it and gotten some equity if an emergency came up. Interest on loan was tax deductible. Considered it a forced savings account.

[bob caldwell]

Mine is like a boat....Never stops ask'n for credit card....

[Papa GLS]

Originally Posted by youroo

I refinance 3 times then file Bankruptcy ! Youroo!!

[Mtelkman]

I literally paid cash. About gave the salesman a heart attack when I whipped all those 100 dollar bills out.

[bob caldwell]

Wear'n bib's?

[ba964]

My approach is the same as David Swartz. #3 post.

[mike.t]

Paid cash. If i want to up/down size i'll sell it. take the $ and then figure which is best way to go.

[RudysWorld]

Went looking thinking I would pay cash. Found out I could get 20 year loan at 3.5% through credit union, interest was deductible as 2nd home. Got what I thought was a good deal on a new motorhome that was sitting on the lot for awhile, less than 50% of suggested retail. Due to deal didn't think I would be upside down on the motorhome. My decision was based on a lot of factors. Seemed like the best option at the time. Good Luck!

[V-Lite Fun]

I once had a dealer say a unit was a great "investment". I said, No, an investment has the potential to appreciate. When I drive out of here I will lose t least a third of my "investment". I pay cash then make payments to myself until my funds are restored to my acvount. Works for me.

Had another dealer who was really trying to help me justify spending more for a much nicer unit tell me, "If I have a penny left when I die I miscalculated. Interesting.

[bob caldwell]

I'll go with youroo's deal...worked for him!

[RubberNail]

I've spent the last 20 years doing financial modeling for my own planning. My 6 MB Excel spreadsheet, which I began crafting in 1996, includes all types of income, retirement income, SS, inflation, COLA and an itemized annual expenditure projection, by year, for my wife and I, for our lifetime. Unfortunately, fortunately, wife's expected life span is 103 years, so finances have to project that far, even though I'm departed. What I have discovered is the enormous number of variables that affect economic outcome. I could write a book, but to simplify, I have observed that the TRUE COST of financing, verses, cash, usually runs about TWICE (2x) the actual financial cost. Hence, if financing cost is 5%, you need to be making 10% on the money you did not spend. But beware, there a numerous factors that could complicate this norm.

For those of us drawing SS, the huge distortion to all this is the TAXABLE SS computation. If you have to withdraw from a retirement account (401K or IRA) the tax rate escalates both because of the withdrawal amount, and the increased % of taxable SS. For my personal situation, contemplating a $200k DP, it means that the optimal finance term is 2 or 3 years, as opposed to cash, or longer period.

[PeterF]

We paid cash. Here in Canada the dealers suck you in with low monthly payments but the payments are spread out over 12 or more years.

[schrederman]

I paid off my first home in 10 years, and I was only 32 when we did that. I'm twice that age now and I have to say that the quickest way to financial freedom is to stop paying interest... on anything. The only way I've bought a vehicle on credit in the last 30 years was the last Ford I bought. It came with a $1,000- rebate if I financed through FMC. I had to keep the loan for 90 days to avoid payoff penalties. On day 91 I paid it off and ended up saving about $900- as opposed to just paying cash.

V-Lite Fun has the right idea... unless you go the Youroo route... We did that for years until the kids got out on their own... now we don't have to as the drain on the cash reserves has diminished to almost nothing. Ten months to retirement...

When we upgrade this year, we'll just pay for it... and hit the road...