Travel Trailer Depreciation?
What is the "rule of thumb" depreciation on used travel trailers? I know that if the MSRP is real(lol) than 25%-30% off new. what is the norm for 2-5 year depreciation schedules? thanks to everyo...
Forum Discussion
Gdetrailer the two options were purchasing cash or financing. If you purchase with cash your loss will be higher. The fact is there IS an opportunity cost losing that investment income. With low interest rates the interest paid is muted by the gains in your investment account that would be $0 if you paid cash. This is assuming the OP assumptions are accurate. I used 5% @ 10 years for the loan and 8% on their investments. Selling in 18 months and realizing a $1,000 loss on that sale. (actually I took your $20k purchase price from your example)
Remember, this only works when we are comparing financing vs cash purchase. If you are just financing a luxury item without the cash reserves as a back up that is an entirely different argument and more in line with your original "never finance a toy" argument which I do not necessarily disagree with.
Remember, this only works when we are comparing financing vs cash purchase. If you are just financing a luxury item without the cash reserves as a back up that is an entirely different argument and more in line with your original "never finance a toy" argument which I do not necessarily disagree with.
- Monthly Payment
- $212.13
Purchase Price - $20,000
Loss @ Sale - $1,000
Loan Bal@18 Mo. - $17,597.68
Interest Paid - $1,416.02
Total Cost to finance+loss - $2,416.02
Less Investment Inccome - $1,600
Net Loss - $816.02
Total cost/loss if paid cash - $1,000
Less Investment Income - $0
Net Loss - $1,000
