Financing a motorhome.

[falconbrother]

My old motorhome needs to be replaced. It's 26 years old. Everything works but, I feel like it has major repairs in the near future that will cost more than I'm willing to pour into a unit that old. It has a pin hole size leak in the top of the radiator that I had found on a trip and fixed in the campground with JB Weld. The leak, though very small, has returned. In a five hour drive it loses about a cup of water. The tail pipe hanger slipped out of the rubber mount and I fixed that in a rest area last Sunday. I'm getting to an age where a reliable motorhome seems really important.

We really must have an RV of some type due to family issues spread across three states, plus we have dogs. I would like to get an ACE or similar unit. I hate to go into debt for anything but, now way I have the cash on hand to buy a new or, new-ish unit. My wife wants a class C. I'm in the middle on the issue. I know I don't want a DP and 31-33 is my limit for length.

Any suggestions on financing a motorhome? I'm 52 years old, retired and then back to full time work. How many years does one finance a motorhome? I plan to stay in the workforce 10 more years unless something happens to upset the proverbial applecart, which can happen.

[msmith1199]

If it weren't for people financing RV's then the RV industry would not exist and there would be no motorhomes for you rich folk to buy. And if that happened there would be no RV.NET for you to post on to tell people not to finance an RV.

[msmith1199]

ratfink09 wrote:
We were thinking of using our home equity line of credit for a large part of the cost. Currently we have it paid off. I was going to ask if our line of credit limit could be increased. Interest is tax deductible for now unless IRS screws with tax laws.

Wouldn't be the IRS screwing with it, it would be Congress.

[msmith1199]

jorbill2or wrote:
Can't help on where but one note of correction. Any loan , bank , personal etc the interest can be deducted as a second home. Assuming you already don't have a second home with a loan on it. Where you get the loan is immaterial .

The loan just has to be secured by the motorhome.

[msmith1199]

Dick_B wrote:
How about a home equity loan? The interest would be tax deductible. Hard to find a loan with the RV as collateral because the value decreases whereas a home usually increases.
The interest on a personal loan is NOT deductible.

Interest on a loan secured by the RV is deductible has a second home.

[Mondooker]

And Bruce, it's a very smart option and like you, I like options!

[Bruce_Brown]

The question of weather to finance or not has nothing to do with the OPs question. It's obvious if he was in a position to pay cash the question never would have been asked. :W

When we bought ours the dealer had a better rate than any of the other, normal outlets. Like many, we went 20 years to begin with, but a few years into it rates dropped and we did a refi with Good Sam Credit that shaved 4 years off the note - we kept the payment the same, just shortened the term.

The longer term does let you make a lower payment, but you MUST look at the overall costs. We went 20 years for the lower payment "just in case". Like some others we also make a habit of paying ahead. We paid the MH off in 8 years. We went 20 years on our house, paid that off in 12. I just financed a truck for 5 years, at my current rate it will be paid off well before it's 3rd birthday.

We always figure what the payment would be at a shorter term vs the longer term, normally finance at the longer term but make the larger payment of the shorter term. A longer note gives you the lower payment OPTION as a safety net in case the poop hits the fan and you can't swing the bigger payment. Paying off in the shorter term is normally (always) the better option.

[falconbrother]

OP here.. We haven't done anything on this yet. Had a couple of deaths that rocked my world so, I'm just now getting back to living a "normal" life. My wife and I have been discussing this. I do think we will do something as soon as we get my wife's car paid off. That's not far off. She wants another motorhome. I want a tow vehicle and a 5er or a TT. I'm tired of maintaining a motorhome that we don't use that much. I was "semi-retired" but, my employer convinced me to go full time so, time off to travel is pretty limited for the next few years.

Thanks for all the replies. No way I will be able to save the cash to buy what we want before we are too old to enjoy it. I get the wisdom in paying cash. But, the reason my wife has a great car is because we financed it. The same rule will apply to an RV. I won't stress over it too much. I'm hyper aware right now that they will dig a hole and put me in it some day in the not too distant future. If you wait too long what you wanted never happens.

[Sully2]

Sam Spade wrote:
Not what you wanted to hear but..........
YOu should have been saving for this starting about 10 years ago.

Something in the 5-10 year old range can save you a TON of money if it is in good shape. I have a 28" C and it would be fine if it had a slide out or two.

A shorter term loan will save you money on interest.

The problem IS......that not every institution will make loans on RV's at a reasonable interest rate.

I always advise young people to NOT get in the habit of financing their "toys" and they don't understand it.......until they get to be in your situation and then it's too late. Good luck.

You go out of your way to brighten everyones day....dont you?

[J-Rooster]

I financed my coach thru Boeing Employees Credit Union for 15 years. BECU had a lower rate then my bank or my other credit union. It's a must to shop around to get yourself the best rate.

[Mondooker]

It seems a never changing circle where some poor soul asks a simple question about Financing a Motorhome? It ultimately ends in a flurry of "only a moron finance a depreciating item" to "if you can't pay cash you failed at every aspect of economic sobriety"!

Somewhere in the middle is you and me but tell me something? What does any of that have to do with the question of the poster which is FINANCING A MOTORHOME???

Come on folks let's stay on message and help the guy who asked that question. And if you don't I'll ask a question about a Montana LLC and that will blow up the entire forum!

How bout them Broncos!!! 🙂

[Mr_Mark1]

It's the RISK that using 'other people's money' that can put a person in a 'situation'.

We will go into another downturn in the economy as it cycles pretty much on a regular basis. You want to have a place to sit when the music stops. I saw a few acquaintances trying to act like big dogs buying houses before 2008 and using them as weekend rentals (popular retirement location). They, too, said 'using other people's money' and it bit them hard in the arce, real hard. They lost everything, million dollar homes that fell to less than half, bank repossessions, lawsuits, etc. It was not pretty.

Even commercial real estate takes a beating. What you are earning today might be a deficit tomorrow. I don't know if you are talking about physically owning commercial real estate or an investment that buys commercial real estate. When stocks fall, generally, so does everything else whether you own the physical building or investment.

I'm from the 'never finance' group. But, I know everyone cannot pay cash but they should be very careful and understand the total cost of financing. If someone finances for 20 yrs. the economy can go up and down several times. Those investments that were earning good money could be much lower but their financing costs keep going. So, they could be paying way more in interest than what they are earning on investments.

Safe travels to all!
MM.

[DownTheAvenue]

The problem with financing a motorhome, especially new or late model over an extended period of time, is that it will depreciate very rapidly, often much faster than the loan pays off. It is a recipe for a financial disaster when something unforeseen and not financially planned for derails the status quo.

Some examples would be a catastrophic mechanical failure requiring tens of thousands of dollars to repair, requiring the motorhome to be parked. Or, a the death or serious illness of a spouse making travel no longer viable.

[AllegroD]

https://www.excelcredit.com/ gave me great rate.

[Mondooker]

Hey Bob are you sure about the 25 year financing? I've seen 20 years as common place but never 25?

Don't get me wrong, I'm not advocating a 25 year loan, I'm only saying I've never seen it!