RV Financing - Rookie Question

[saenzm]

Where is the best place to attain RV financing. I bought a 97 Pleasure Way yesterday cash, but was thinking of getting some of it financed. Should I just go to my local bank?

Oh and Insurance too. I have my vehicles insured with USAA, but the guy I bought it from swore by progressive. Thoughts on this?

Thanks,
Mark

[B Eventually]

USAA no longer insures RVs. They have a partnership with Progressive that likely gets USAA members slightly better rates than going directly to Progressive.

Give USAA a call re: financing. They may be able to auto approve you over the phone. That's the route we took. It was an extremely simple process, literally only taking a few minutes. And they were able to drop their rate .25% to match a rate our local CU was offering.

[goreds2]

I would advise not to get a loan but if you must do so, go to a credit union.

[avanti]

There are two kinds of people: Cash people and credit people. Cash people have to wait a little longer for their toys. Credit people pay 12% more for them.

[Bruceper]

Originally Posted by avanti

Credit people pay 12% more for them per year.

Fixed that for you.

[gregmchugh]

For someone with a good credit rating, an RV loan today is around 4% fixed interest which is tax deductible so a little less in the end. There can be advantages even if you could afford to pay cash or delay until you can save enough to pay cash. Not necessarily a bad idea to finance if you understand the actual cost vs paying cash and you want to get out and enjoy traveling...

[jrobe]

Originally Posted by avanti

There are two kinds of people: Cash people and credit people. Cash people have to wait a little longer for their toys. Credit people pay 12% more for them.

Reminds me of the old saying - "the difference between poor people and rich people is that poor people pay interest and rich people collect interest."

[wincrasher]

I'm all about keep my options open.

Having payments to make can get you into trouble if something bad happens.

Also, every new RV takes a big depreciation hit those first couple of years. You could easily be upside down on loan, limiting your ability to get out of it easily.

[avanti]

Originally Posted by gregmchugh

For someone with a good credit rating, an RV loan today is around 4% fixed interest which is tax deductible so a little less in the end. There can be advantages even if you could afford to pay cash or delay until you can save enough to pay cash. Not necessarily a bad idea to finance if you understand the actual cost vs paying cash and you want to get out and enjoy traveling...

Our financial advisor keeps telling us that we are crazy not to take out a mortgage on our (mortgage-free) property, given the ridiculously low interest rates. I actually believe that he is rationally correct. But we are willing to pay the small financial penalty to just not have to think about it.

[Boxster1971]

Originally Posted by avanti

Our financial advisor keeps telling us that we are crazy not to take out a mortgage on our (mortgage-free) property, given the ridiculously low interest rates. I actually believe that he is rationally correct. But we are willing to pay the small financial penalty to just not have to think about it.

Your financial advisor is typical - they just want control of your money so they can make money from it. Your mortgage free property does not make money for your advisor. Yes interest rates are low, but guaranteed returns on your invested money are also low, even lower.

[Bruceper]

Not having a mortgage also affects your credit rating.

[avanti]

Originally Posted by Bruceper

Not having a mortgage also affects your credit rating?

Why would I care about my credit rating?

[Boxster1971]

Originally Posted by Bruceper

Not having a mortgage also affects your credit rating.

Yes it could make it go up or down depending on other credit you have open. But generally it will have little effect according to Equifax.

Does Paying Off My Mortgage Affect My Credit Score? | Equifax Finance Blog

[RickNV]

At one time Costco was offering RV and Boat financing - I'm not sure if they still offer it but I would look into that if you are a Costco member needing financing

[goreds2]

Originally Posted by Boxster1971

Your financial advisor is typical - they just want control of your money so they can make money from it. Your mortgage free property does not make money for your advisor. Yes interest rates are low, but guaranteed returns on your invested money are also low, even lower.

Very well said concerning taking a mortgage on your already paid off property. In my opinion do not do it.
From DaveRamsey.com:

Let me help you with the mathematics on this. Let’s use an example. Let’s say you have a $200,000 mortgage at 5% interest. If this is your personal residence and you do itemize—by the way, only 27% of Americans who file taxes itemize—you can write off the interest portion of your payment on your personal residence. If you have a $200,000 mortgage at 5%, that would be $10,000. We have a $10,000 tax write-off because we have a $200,000 mortgage at 5%. That’s a tax deduction, meaning if that couple makes $75,000 a year and they take a $10,000 tax deduction, they don’t pay taxes on $75,000. They instead pay taxes on $65,000. If you do this weird Dave Ramsey thing, though, and you pay off the house, you no longer pay taxes on $65,000 because you would not have a tax deduction. You’d have to pay taxes on $75,000. You’re in a 25% tax bracket if you make $75,000 a year. That $10,000 a year that we’re talking about is taxed at 25%. By paying off your home, 25% of that $10,000 that you’re going to have to pay extra taxes on is $2,500. In essence, you lost a $2,500 savings on your tax bill, but you gained $10,000 by not having to pay it (interest) to the bank.

[dknightd]

It would be nice if people answered the question. Here is my answer.
You would be lucky (or unlucky) to finance a 1997 camper. I don't know if a bank would take it as security. It is 19 years old. If you have equity in your house it might make sense to use that. This is not a finance forum, but here is my take.
I'm thinking there might be good reasons to finance even after you have made the purchase. Two come to mind right away.
1) you spent all your emergency cash on a camper, and you'd like to have some cash sitting in the bank even if it costs you money.
2) My situation. I could pay cash, but I'd have to take it out of my retirement account (would be taxed as ordinary income). When you figure in taxes on withdrawing the money, and tax savings on mobile home it works out about even right now. We don't know what the future might hold - I think I might pay 50% cash and finance 50% to hedge my bets.