Financing over paying cash

[Cowracer]

Most of my holdings are in Powerball tickets. Return rate is kinda horrible right now, but I only need one to hit.

Tim

[Cowracer]

Seriously though....

One consideration is that financed items usually are not be attached in a lawsuit. God forbid you have an accident (your fault) where you seriously injure someone, anything you own free and clear can be taken to cover any lawsuit against you. Items that have liens are generally not.

Tim

[djreg]

Being and X banker cash is King. First off find yourself a good 2 or 3 year old RV that fits your needs. You have to consider and Rv in most cases is a luxury item. If you buy new you drive it off the dealers lot you lost 25 to 30%. Your salesman will try his best to get you to finance it because the dealer makes a nice kick back on it. Used against new example 2012 I bought a 3 year old 5th wheel New cost had been $76,000 . I paid cash on private sale of $35,000. Just lots to think about.

[corn18]

Originally Posted by djreg

Being and X banker cash is King. First off find yourself a good 2 or 3 year old RV that fits your needs. You have to consider and Rv in most cases is a luxury item. If you buy new you drive it off the dealers lot you lost 25 to 30%. Your salesman will try his best to get you to finance it because the dealer makes a nice kick back on it. Used against new example 2012 I bought a 3 year old 5th wheel New cost had been $76,000 . I paid cash on private sale of $35,000. Just lots to think about.

You are singing my tune! Let someone else take the depreciation hit. Only problem I have is that my wife has CDO (it's like OCD but in alphabetical order). She cannot stand the thought of buying a used anything, let alone something she has to sleep in. New build houses, new cars, new trailers. At least she only has her sights set on $28k trailers, so losing 25% isn't breaking the bank. Now the BMW is another story.

[Vince and Charlette]

A few added factors: 1) Anyone who thinks a 0% loan is 0% is smoking some of that funny weed. Yes, it's 0% as long as you meet the conditions of the loan. Read the fine print and see what happens when you skip a payment or two, which leads to the second point. 2) As in #1, you are presuming upon the future. There is a probability and meaningful risk associated with a ten year period of time. Are you healthy, how secure is your job, etc. 3) Finally, and perhaps most importantly, what is you debt to income ratio? If you're making $150k a year, a $35k camper is a pittance. But, if you're like Bubba making $35k a year, up to your ears in credit card debt, etc. the last thing you need is more debt. Let me close in siding with some others. When I was about 5 or 6 back in the 50s, dad bought a cabin on a lake in Minnesota. He was an auto mechanic not pulling in much money. To him $3k was a stretch. Yet, those are some of the finest memories of my life! It was many years later that I learned Dad had to borrow that $3k (not from a bank, but from relatives). But, it was a true "investment" that is still paying dividends. If it's not too much of a stretch, go ahead and make some invaluable memories.

[CaptnJohn]

Financing an rv goes against all other loans. The higher the amount and longer term the lower the interest. Instead of taking out cash or selling investments I borrowed the $50k for 20 years giving a $330 payment. I send $2500-$3500 every month. Balance drops quickly. It will be paid in about 2 1/2 years.

[Mike134]

I like the new debate. Tires and gas vs diesel debates have been beat to death.

[Locky]

Originally Posted by Mike134

I like the new debate. Tires and gas vs diesel debates have been beat to death.

Well at least you don't drive a Ford LOL

[Cowracer]

Originally Posted by Vince and Charlette

A few added factors: 1) Anyone who thinks a 0% loan is 0% is smoking some of that funny weed. Yes, it's 0% as long as you meet the conditions of the loan. Read the fine print and see what happens when you skip a payment or two, which leads to the second point. 2) As in #1, you are presuming upon the future. There is a probability and meaningful risk associated with a ten year period of time. Are you healthy, how secure is your job, etc. 3) Finally, and perhaps most importantly, what is you debt to income ratio? If you're making $150k a year, a $35k camper is a pittance. But, if you're like Bubba making $35k a year, up to your ears in credit card debt, etc. the last thing you need is more debt. Let me close in siding with some others. When I was about 5 or 6 back in the 50s, dad bought a cabin on a lake in Minnesota. He was an auto mechanic not pulling in much money. To him $3k was a stretch. Yet, those are some of the finest memories of my life! It was many years later that I learned Dad had to borrow that $3k (not from a bank, but from relatives). But, it was a true "investment" that is still paying dividends. If it's not too much of a stretch, go ahead and make some invaluable memories.

Oh boy... where to start?

OK first off, of all the flavors you could be, you picked salty? Why does someone only making $35K a year have to be a debt-riddled Bubba? I know fine people making about that, living within their means and still have enough (and good enough credit) to be able to buy a $35k RV. And no, 35K is not a 'pittance' to someone making $150K. I am that someone and its not like I'll drop 3 or 4 $100 bills and not pick them up because it's too much bother, ya dig? Making more money does not automatically confer sainthood on anyone (again, I am that guy) , and making less does not make anyone a lesser person. We all are RV enthusiasts and to look down your nose at anyone is missing a very large point of being one.

Secondly... Nobody and I mean No Body is secure in their health or their jobs at any time. But if I cant make plans for 10 years out from right now, then I guess I should just shoot myself in the head, then?

Also, You do realize that ANY loan has significant penalties for "missing a payment or two", right? Its not just 0% ones. I absolutely think that 0% loan is truly 0% and there is a total lack of funny weeds here. All you got to do is abide by the rules you agreed to when you signed up for it.

Lastly, that $3000 your Dad spent in 1950 is equal to about $32,115 now. But I guess your dad wasn't a Bubba like some of these guys today?

Lets ease up on the condescension...

Tim

[NJKris]

I'm almost 54 and can retire in 2 years from my job. Did I alwats make the best decisions...heck no. But with age you start to get a grasp on things.

I'm same age, just retired. Payed out about 20k for trailer, out the door and another 30k on the tow vehicle. Spent another 6k on 'accessories'. Had I paid interest also, I don't think I would have justified the purchase, it is a luxury. If I had children, knowing I should be saving to help them through college if that was what they wanted, I would have put the money towards that. Plenty of great camping memories I had through Scouts and a tent when I was a kid, I imagine the same memories could be made today at low cost.

[Mike134]

Originally Posted by Cowracer

Oh boy... where to start?





Lets ease up on the condescension...

Tim

I was also going to engage him with your points but internet debates are the same as debating a drunk in the bar.

[Walholler]

I retired for good in March of 2010, paid $6000 cash for a used Holiday Rambler 5th wheel and $10,000 cash for a used GMC 2500HD. My wife and I and our two West Highland terriers enjoy it for six years. Decided to move up to a newer and larger 5th wheel. Sold the HR for the same as I paid for it, $6000. purchase a new Crusader Lite 5th wheel, paid cash. Sold the GMC and purchase a new Chevy 2500HD Diesel Crew Cab 4x4.Paid $20,000 down, financed the rest. Reason we financed the truck and not the travel trailer, got a better finance rate on the truck than I could have on the trailer.

[DavidBo]

One other factor is the infamous credit score. One effective way to get a low score is to stay out of debt. Sounds weird I know, but a lack of revolving credit will drop your score. I used to have a near perfect score, then I paid off my house and truck and did the apparently unAmerican thing of not buying a new vehicle or refinancing my house. My number dropped nearly 100 points for that alone as the only loan I had was a small one for my trailer, and I maintain a zero balance on my Amex card.
Personally, I think the whole credit score deal is a scam to keep you paying the banks. I am in the market for a new truck, my plan is to pay cash for most of it and finance the rest for 3 years tops. I hope I have that option, when I financed my Rockwood I was told the shortest note I could get was for 4 years, and I had to threaten not to buy the trailer just to get that!

[NJKris]

Sounds weird I know, but a lack of revolving credit will drop your score

Wouldn't credit card debt help? I charge everything I possibly can, average 5k in credit card purchases a month. Ooooooohhhh, I love that credit card!! Charge away! Of course I pay it in full monthly. I wonder if it makes a difference if not Amex.

[walaby]

I think I have a simpler way to look at it.



Basically the only people I have to justify my purchase as either cash or finance is me, and my wife. Other than that, I have nothing to prove or justify to anyone, anywhere, at any time.


I don't look for financial advice on the internet, nor do I pay much attention to it when it's offered.


Has worked out just fine for me and the wife.


Mike

[Locky]

Originally Posted by walaby

I think I have a simpler way to look at it.



Basically the only people I have to justify my purchase as either cash or finance is me, and my wife. Other than that, I have nothing to prove or justify to anyone, anywhere, at any time.


I don't look for financial advice on the internet, nor do I pay much attention to it when it's offered.


Has worked out just fine for me and the wife.


Mike

And at the end of the day that is all that matters.

[TitanMike]

Originally Posted by NJKris

I'm same age, just retired. Payed out about 20k for trailer, out the door and another 30k on the tow vehicle. Spent another 6k on 'accessories'. Had I paid interest also, I don't think I would have justified the purchase, it is a luxury. If I had children, knowing I should be saving to help them through college if that was what they wanted, I would have put the money towards that. Plenty of great camping memories I had through Scouts and a tent when I was a kid, I imagine the same memories could be made today at low cost.

One can make the same camping memories as the did when young scouts but remember this. At our age the ground is harder, rain wetter, wind's stronger, and "cold" is colder.

Something comfortable enough to off set those is going to have it's price.

[ncebeemer]

Originally Posted by Mike134

Paid cash for the camper. Financed the Truck for 72 months. Ford offered 0% so who cares how long the term is, it's free money.

I too bought a car with 0% interest, instead of paying cash. My savings (in mutual funds) are earning way over that interest rate. Laughing all the way to the bank.

[ncebeemer]

Originally Posted by Mike134

I'm money ahead paying cash right now instead of investing, had I left the money invested it would have evaporated the past 2 days. Sometimes you get lucky when you take your profits from the market.

Choose your investments wisely Grasshopper. Current market only down a mere fraction.

[boogiejack75]

Originally Posted by SlowrideHD

I wish I would have had your financial advisor last year! Did OK but not 30%!

Lost more the last two days than I paid for my first home! Now that I think about it, I lost more yesterday than I paid for my first home! Yuck.

You haven't lost it until you sell. Greed will bring the market back...as always.