Why buy a new $125,000 motorhome?

Jarlaxle wrote:
Might as well put the cash in a pile & burn it.

I've done that, but it's just so much more rewarding to buy a nice new car with it.

Jarlaxle wrote:

msmith1199 wrote:

Jarlaxle wrote:

msmith1199 wrote:

2oldman wrote:

msmith1199 wrote:
But I like having a brand new car fresh off the show room floor about every three years.

It's nice to be in a position in life to do that. Congrats.

It doesn't require a lot to do this. Lease payments are cheaper than car payments if you buy. If you can afford a car payment you can afford to lease. You just have to realize you'll be making payments forever doing it the way I do.

Leasing...it's car rental for the really gullible.

So please tell me what you think is the cheapest way to put a new car in your garage every three years?

Might as well put the cash in a pile & burn it.

I guess I have money to burn. Sorry you feel the need to be insulting about it.

pnichols wrote:

BurbMan wrote:
To the OP, I wouldn't finance a $125k MH either, but hey, who am I to criticize?

Hmmmm .... if you were in the banking business for years you of all people should realize that it's sometimes bad money management to pay cash for something if the extra cost from financing it is less than what you can make off the cash by investing it elsewhere.

i.e. I'm retired and have a mortgage on our home ... which is considered a bad position for a retired person to be in by money management experts. HOWEVER, the interest on my mortgage is less than what I'm making in my portfolio, so it would be unwise to draw the money out just to pay off the mortgage ... it may be a feel-good thing for me to do, but not a money-wise thing for me to do.

It's not a bad decision because real estate is considering an appreciating asset while a vehicle of any kind is depreciating asset....more so an RV....

There are many variables in financial planning...my opinion is that I wouldn't finance an RV. Also why many lenders have stayed out of the RV and recreational segments....when times get tough, the toys are the first to go.

IMO the economy had not yet "settled in" back to normality yet...banks are all over the map on lending policies. I am not a fan of regulation and government oversight but I think just as we have the federal reserve we need a return to Glass Steagal or some modern form to keep the banks out of the risky end of investments...that's why we have investment houses.

We all know that the greater the risk the greater the return, but there is a time and place to take risk and a time and place to play it safe. We have the investment houses if we want to take risk, we need the banks to be safe harbor if we don't.

This is not political commentary, this is economic commentary, regardless of who is in the white house.

pnichols wrote:
it would be unwise to draw the money out just to pay off the mortgage ... it may be a feel-good thing for me to do, but not a money-wise thing for me to do.

I paid off a home in the 80s as fast as I could because I valued the "feel good" much more than the dollars. Worked for me.

BurbMan wrote:
To the OP, I wouldn't finance a $125k MH either, but hey, who am I to criticize?

Hmmmm .... if you were in the banking business for years you of all people should realize that it's sometimes bad money management to pay cash for something if the extra cost from financing it is less than what you can make off the cash by investing it elsewhere.

i.e. I'm retired and have a mortgage on our home ... which is considered a bad position for a retired person to be in by money management experts. HOWEVER, the interest on my mortgage is less than what I'm making in my portfolio, so it would be unwise to draw the money out just to pay off the mortgage ... it may be a feel-good thing for me to do, but not a money-wise thing for me to do.

pronstar wrote:
It's far better/easier to let the government and financial institutions make the right decisions for us.
They only have our best-interests in mind

Sooo ... you call banks requiring 30%-40% down (probably required by banking regulations back then) like they did back in the 50's so that folks really had to have their acts together before they could buy a house letting "... the government and financial institutions make the right decisions for us"??

Practices like that sound like good practices and I don't really care if it's the government or grandma enforcing policies like this.

BurbMan wrote:
but I voted for Bush but this was one thing that he did that I did not agree with.

I'll never forget that speech.. something like "everyone should be able to buy a home."

Medico wrote:
Yes I can, and do sit on my countertops. I can also put hot pans on them and cut on them without damaging them. I have a king size sleep number with a 4 to 5 inch memory foam topper, and yes I do have a VERY strong roof system that does not leak! The point was if you wish to buy or build an RV with cheaper products, then so be it, but don't try to tell those of us who chose to get more that we might be crazy because "why buy a new $125K MH". Heck, $125K is cheap for a descent NEW MH. You might get an entry level, shorter gas MH for that!

But .... can you go here with your motorhome?:



Or here?:



Or here?:



We can .... with our $70K motorhome.

And for what it's worth .... we do have a one piece fiberglass roof, and two generators, and two queen size beds, and distributed air conditioning and heating, and long range Internet access, and long range cellular phone access, and twin deep kitchen sinks, and an outside ducted cooktop exhaust system, and an oven, and heated tanks, and an electric step, and 100% LED lighting, and an outside hot/cold shower, and an outside entertainment system, and two powered roof vents, and seven outside steel carpet lined storage compartments with two of them being extra long for fishing poles/shovels/beach umbrellas, and access from the inside to the outside battery compartment, and it's all on an overkill chassis so the DW can bring home around 2,000 more lbs. of rocks from our adventures.

P.S. I'm just having some fun with ya' - enjoy your luxurious rig!

With 30 years in banking let me share a few facts...this was not some grand scheme to defraud the american public through unbridled greed...

Adjustable loans that had balloon payments after 3-5 years were viewed as viable in an escalating market. The last thing a bank wants to do is re-po an asset...ANY asset, whether it is a house, car or RV. The costs involved in the process are significant and the amount they recover on the loan is usally a fraction of what was owed.

After the Great Depression congress passed the Glass-Steagel act in the 30's that banned banks from investing in risky markets like securities and insurance. When this was repealed under the Bush Jr administration, many banks took the opportunity to get into the investments business in a big way.

It's been common practice for years to sell bundles of mortgages as investment securities. You have the investor who owns the security that is backed by the loan and the servicing agent who collects the payments from the homeowner and services the loans for a fee. It's not uncommon for big institutional investors to hold some mortgage backed securities in their portfolios.

The new whiz bang security that was invented in the early 2000's were derivatives of mortgage-backed securities...not just bundles of mortgages but bundles of bundles so to speak. This was a brand new investment vehicle and looked like a great idea at the time. What we found out later was that the effect of investing in mortgage derivatives was that the quality and type of the underlying mortgages were not visible to the derivatives investor...the rating services like Moody's and others had no basis to rate these new securities because there was no comparable type, so they gave them all a "AAA" rating, even though many of them held high risk mortgages that could not withstand that rating.

And in full circle, many of the investors that bought these new mortgage back derivatives were banks, who were now allowed to do so after Glass-Steagel was repealed....

And then it became easier to write these hi-risk mortgages because the mortgage companies could bundle them and then sell the bundles to the investment houses (like Lehman) that would in turn bundle the bundles as derivatives. The mortgage company figured out that the end buyer couldn't see what the detail of what they were buying, and so what were portfolios of mostly 30 year conventional mortgages not mostly consisted of these new ARMs that had balloon payments 1-5 years out.

So the cycle ran away like a runaway diesel spinning faster until it self destructed....

Had Glass-Steagel been left in place for the same reason it was put in place after the depression, this downturn would have been a fraction as bad as it was.

Not to get political, but I voted for Bush but this was one thing that he did that I did not agree with.

To the OP, I wouldn't finance a $125k MH either, but hey, who am I to criticize?

msmith1199 wrote:

Jarlaxle wrote:

msmith1199 wrote:

2oldman wrote:

msmith1199 wrote:
But I like having a brand new car fresh off the show room floor about every three years.

It's nice to be in a position in life to do that. Congrats.

It doesn't require a lot to do this. Lease payments are cheaper than car payments if you buy. If you can afford a car payment you can afford to lease. You just have to realize you'll be making payments forever doing it the way I do.

Leasing...it's car rental for the really gullible.

So please tell me what you think is the cheapest way to put a new car in your garage every three years?

Might as well put the cash in a pile & burn it.