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Cash Vs. Finance

DallasSteve
Nomad
Nomad
I'm planning to buy a new RV in March. Yes, I know they depreciate like crazy, but I've window shopped the used market and I don't see any that's what I want at a reasonable price and I don't want to get into the used RV inspection dance, either. I have the cash, but my plan has been to finance initially and then pay off the loan in a month or two. Interest would not be tax deductible for me and I don't think I'll get a 29% return in the market again next year. So I don't want to keep the loan.

The reason I want to get a loan to start with, is because I like the idea that a bank or some other business has "skin in the game" with me. What I mean by that is "How do I know if I give the dealer my cash for the RV they will actually deliver the RV? I don't have much trust for any RV dealer and I don't know what paperwork to look for. A company in the business of putting their money out to finance these purchases almost certainly knows what to look for.

So what are your opinions/suggestions about a plan like this? I know I will loose a little money by doing a loan, but I consider that to be like title insurance if I was buying a home. It's something I'm willing to pay for. And as a related question, What are typical prepayment penalties or terms on RV loans?
2022 JAYCO JAY FLIGHT SLX 8 324BDS
2022 FORD F-250 XL CREW CAB 4X4
All my exes live in Texas, that's why I live in an RV
73 REPLIES 73

ppine
Explorer II
Explorer II
Now is not that the time for signing up for non-essential debt.
Put your plans on hold and re-think the idea in about 18 months.

C_Schomer
Explorer
Explorer
I would never buy a new rv... they depreciate about like a used diaper! Pay cash for a use one, as long as you can, or have, a good inspection done. I've done very well, that way. Don't pay the NADA valuation either. I've always done several thousand better. Craig
2012 Dodge 3500 DRW CCLB 4wd, custom hauler bed.
2008 Sunnybrook Titan 30 RKFS Morryde and Disc brakes
WILL ROGERS NEVER MET JOE BIDEN!

ppine
Explorer II
Explorer II
Buying a new RV and financing it is pure consumption spending. Much better to buy a used one for cash. For serious expenditures and financing I like investment spending. That is how I got retired at age 50 which was 20 years ago.

time2roll
Explorer II
Explorer II
GDS-3950BH wrote:
Why not blame the company that hosts this board? They'll be more than happy to sell anyone a $20K POS stick and tin TT that will be lucky to last 5 years, and finance it for 10 or 12 years for them.
My stick and tin is doing just fine 15 years running. Much better than all that delam that gets posted. I went with 20 year financing, paid in 5. NO regrets.

rvshrinker
Explorer III
Explorer III
Did PDI, wrote check, drove home. No escrow needed.

GDS-3950BH
Explorer
Explorer
Grit dog wrote:
GDS-3950BH wrote:
If it gets that bad and you financed an RV just dont make the payment and they'll come and get it, which is why it's called collateral. Any depreciation or difference will be written off as a profit and loss write off as you can not get blood from a turnip. At that point your FICO score won't mean much anyway, and as soon as it's over they'll be glad to finance another for you regardless.


I'll hope this part was written tongue in cheek and just not presented as such.
If not, I'd like to personally thank you for promoting the major reason I lost over $100k on a house that I chose to be responsible with and hang onto during the last recession rather than just stop paying, toss the keys under the mat and wait for the bank to foreclose on it.

(At least 2 other families that did just that with their mortgaged homes paid "some" of the rent to live in mine and offset my loss, somewhat. They got a more personal thank you, as about half my loss was not in market value, but rather unpaid rent and damage to the house because they were scum bags too...)

At the same time, I'd like to also thank those with irresponsible debt for allowing us to buy a new boat, new truck and a 1/4 section of land, all at significant discounts because the owners couldn't make their payments on their luxury items that were leveraged 100% or more.


It was all tongue and cheek. You would not believe the amount of people I know (not by choice) who live by the tactic. It became a little harder back whenever they changed the bankruptcy code which seems like eons ago, but that just slows em down a little.

Why not blame the company that hosts this board? They'll be more than happy to sell anyone a $20K POS stick and tin TT that will be lucky to last 5 years, and finance it for 10 or 12 years for them.

Grit_dog
Nomad III
Nomad III
GDS-3950BH wrote:
If it gets that bad and you financed an RV just dont make the payment and they'll come and get it, which is why it's called collateral. Any depreciation or difference will be written off as a profit and loss write off as you can not get blood from a turnip. At that point your FICO score won't mean much anyway, and as soon as it's over they'll be glad to finance another for you regardless.


I'll hope this part was written tongue in cheek and just not presented as such.
If not, I'd like to personally thank you for promoting the major reason I lost over $100k on a house that I chose to be responsible with and hang onto during the last recession rather than just stop paying, toss the keys under the mat and wait for the bank to foreclose on it.

(At least 2 other families that did just that with their mortgaged homes paid "some" of the rent to live in mine and offset my loss, somewhat. They got a more personal thank you, as about half my loss was not in market value, but rather unpaid rent and damage to the house because they were scum bags too...)

At the same time, I'd like to also thank those with irresponsible debt for allowing us to buy a new boat, new truck and a 1/4 section of land, all at significant discounts because the owners couldn't make their payments on their luxury items that were leveraged 100% or more.
2016 Ram 2500, MotorOps.ca EFIlive tuned, 5โ€ turbo back, 6" lift on 37s
2017 Heartland Torque T29 - Sold.
Couple of Arctic Fox TCs - Sold

Grit_dog
Nomad III
Nomad III
time2roll wrote:
When I bought my RV trailer I had just paid cash for my house. Dang I was out of money and had to finance the trailer. Armageddon was upon me.


Lol. Yes, there's responsible debt and irresponsible debt for sure and too many get caught up in irresponsible debt and a few too many preach NO debt.
As with anything, it's subjective and good for you, sounds very responsible.
2016 Ram 2500, MotorOps.ca EFIlive tuned, 5โ€ turbo back, 6" lift on 37s
2017 Heartland Torque T29 - Sold.
Couple of Arctic Fox TCs - Sold

Bobbo
Explorer II
Explorer II
To repeat myself: Do what you are comfortable doing. I pray that you don't learn a hard lesson.

The voice of caution is never welcome when things are going well. Good luck.
Bobbo and Lin
2017 F-150 XLT 4x4 SuperCab w/Max Tow Package 3.5l EcoBoost V6
2017 Airstream Flying Cloud 23FB

bid_time
Explorer
Explorer
Bobbo wrote:
For all of those who think it is a good idea to carry debt that you don't need to carry, I hope you never live through a 5+ year recession. I have. I won't carry debt unless it is necessary.

As far as selling your "collateral," good luck with that when the recession hits and no one has any money. As far as withdrawing your savings from your investments when the recession hits, good luck with that when your savings are suddenly 50% of what they were.

Do what you are comfortable doing. I pray that you don't learn a hard lesson.
Bobbo - Why would I wait 5 years to cash out and cover my loans?

If the market dropped 10% over a month, I can cash out, cover my loans, and still be thousands $$$ ahead.

mich800
Explorer
Explorer
Bobbo wrote:
For all of those who think it is a good idea to carry debt that you don't need to carry, I hope you never live through a 5+ year recession. I have. I won't carry debt unless it is necessary.

As far as selling your "collateral," good luck with that when the recession hits and no one has any money. As far as withdrawing your savings from your investments when the recession hits, good luck with that when your savings are suddenly 50% of what they were.

Do what you are comfortable doing. I pray that you don't learn a hard lesson.


Where is all this cash you have that is not subject to the same market swings everyone eles diversifies for? Unless buried in coffee cans you still have risk. In fact under your scenario that coffee can money has lost significant purchasing power.

GDS-3950BH
Explorer
Explorer
Bobbo wrote:
For all of those who think it is a good idea to carry debt that you don't need to carry, I hope you never live through a 5+ year recession. I have.



Huh? 5+ year recession? The great depression was only 4 years and the latest which was compared to it, although it wasn't even close by the numbers, was less than 2? Are you 91?.

Taking into account the last ended @ 10+ years ago and its the longest expansion in history, the next may be a doosey but what is the big deal? If it gets that bad and you financed an RV just dont make the payment and they'll come and get it, which is why it's called collateral. Any depreciation or difference will be written off as a profit and loss write off as you can not get blood from a turnip. At that point your FICO score won't mean much anyway, and as soon as it's over they'll be glad to finance another for you regardless.

Bobbo
Explorer II
Explorer II
For all of those who think it is a good idea to carry debt that you don't need to carry, I hope you never live through a 5+ year recession. I have. I won't carry debt unless it is necessary.

As far as selling your "collateral," good luck with that when the recession hits and no one has any money. As far as withdrawing your savings from your investments when the recession hits, good luck with that when your savings are suddenly 50% of what they were.

Do what you are comfortable doing. I pray that you don't learn a hard lesson.
Bobbo and Lin
2017 F-150 XLT 4x4 SuperCab w/Max Tow Package 3.5l EcoBoost V6
2017 Airstream Flying Cloud 23FB

rk911
Explorer
Explorer
goducks10 wrote:
Could you imagine the selection of RV's if everyone paid cash only?
My RV would be a 5x10 utility trailer with the best tent I could find.

just imagine the type of RV you could have if you were to eliminate debt, get on a budget and save/invest. without debt all things are possible.
Rich
Ham Radio, Sport Pilot, Retired 9-1-1 Call Center Administrator
_________________________________
2016 Itasca Suncruiser 38Q
'46 Willys CJ2A
'23 Jeep Wrangler JL
'10 Jeep Liberty KK

& MaggieThe Wonder Beagle