Be Perpared to Pay if you want to Play

I'm 11 mos. from retiring. We bought our 5'r and truck (used) together a little over 6 yrs ago. Financed for 5 yrs to have paid off before we ride off into the sunset. Yeah, they are older, but in real good shape and suit us fine.

We have gone to a lot of RV shows and almost jumped into a new unit until I realized what that would mean for our retirement finances. Right now we are just stashing $$ as much as we can and we'll go with what we have.

Chuck .. wrote:
Just went to the Credit Union today to see about a loan for a used and possibly a new 5th wheel. Well, well, well, what a eye opener! If I get a 60-month loan for $38,000 on a used unit at 4.01% ...

I'd love to know what credit union(s) offer 4% RV loans -- I personally haven't seen it. The CU I am a member of (Penfed) offers loan rates for RV's as follows:


Fixed New RV and Travel Trailer Loans
Rate Term Amount Approx. Loan Payment
6.15% APR 12 to 84 months $5,000 - $25,000 $220.21 for a $15,000 loan amount for 84 months
6.50% APR 12 to 120 months $25,001 - $39,999 $340.64 for a $30,000 loan amount for 120 months


Fixed Used RV and Travel Trailer Loans
Rate Term Amount Approx. Loan Payment
6.15% APR 12 to 84 months $5,000 - $25,000 $220.21 for a $15,000 loan amount for 84 months
7.25% APR 12 to 120 months $25,001 - $39,999 $352.20 for a $30,000 loan amount for 120 months


Additional variable rate new and used RV loans are also available. Please call 800-247-5626 for more information.

soren wrote:

Effy wrote:
Math is math and of course your payments will be high on a 5 year note. That's a lot to cram into a short span. That's why they offer 15-20 year notes on RV's.That's why they offer 15-20 year notes on RV's. Sure you pay a lot more in the long run but the monthly sting is less and makes actually living on a budget manageable.

While shopping for our last two motorhomes (used) we continually ran into people who were suffering greatly because they took out a long term loan on a liability that depreciates far quicker than the loan balance. It's common to find really nice 6-10 year old rigs that are overpriced, and firm on the price, since they have a 15-20 year loan, and they owe tens of thousands more than the thing is worth. Saddest of all is the widows we met who can't handle the motorhome at all. They have never driven the thing, and would have no idea how to set it up on a site. They are now alone and saddled with a stupid mistake their husband made. Trapped in a mortgage that far exceeds the value of their motorhome, and have no idea how to get out of the mess.

Sure taking an irresponsible long term loan on a steeply depreciating liability WILL make the payments more "affordable" short term, but for many, situations change, and half way through a long term mortgage, they discover that they really managed to screw themselves pretty well.

I wasn't opining on whether it was a good or bad idea. It's an option. OP complaining he can't afford certain things on a 5 year note. Amortizing helps to afford it. And interest aside - which is deductible, what's the difference if you pay it all up front or amortized? The amount paid (less interest- which again can be claimed) vs depreciation is the same. So your loss is the same whether you pay it all faster or slower. If you buy a 40k FW and 10 years form now it's worth 20k, what difference does it make if you spent that money in 5 years vs 10? Add that if you have cash, isn't it better to use the banks money and invest yours elsewhere for a better return rather than throwing all your money on a depreciating asset?

Irritating when people are overly critical of other's financial decisions because they look at things with blinders on. I took a 15 year note on our MH. The cash I would have spent on it I invested elsewhere in commercial real estate. Not only did I get a healthy ROI in monthly income, I made an 80% profit on top of that when I sold it 5 years later. All the while used the bank's money to purchase the RV and wrote off the interest. Are you saying I would have been wiser to throw all my cash at the RV, avoiding investing elsewhere for a profit only to arrive at the same depreciation with the same loss on the RV?

What caught my attention is $55,000 for a new 5th wheeler. Sure, you can spend that much, but if money is tight you can find large new fifth wheelers from major names starting around $35,000 after you negotiate 30 percent off the MSRP. That kind of discount is normal on expensive trailers.

soren wrote:

Effy wrote:
Math is math and of course your payments will be high on a 5 year note. That's a lot to cram into a short span. That's why they offer 15-20 year notes on RV's.That's why they offer 15-20 year notes on RV's. Sure you pay a lot more in the long run but the monthly sting is less and makes actually living on a budget manageable.

While shopping for our last two motorhomes (used) we continually ran into people who were suffering greatly because they took out a long term loan on a liability that depreciates far quicker than the loan balance. It's common to find really nice 6-10 year old rigs that are overpriced, and firm on the price, since they have a 15-20 year loan, and they owe tens of thousands more than the thing is worth. Saddest of all is the widows we met who can't handle the motorhome at all. They have never driven the thing, and would have no idea how to set it up on a site. They are now alone and saddled with a stupid mistake their husband made. Trapped in a mortgage that far exceeds the value of their motorhome, and have no idea how to get out of the mess.

Sure taking an irresponsible long term loan on a steeply depreciating liability WILL make the payments more "affordable" short term, but for many, situations change, and half way through a long term mortgage, they discover that they really managed to screw themselves pretty well.

You speak a whole lotta truth here. No one can manage your retirement like you can. Be a realist, sit down and document every single buck you spend currently. Make it into a list of your current lifestyle and that after you retire. Push the list out 5 years forecasting everything from fuel costs to new cars to food to housing, insurance and doctor costs. This is hard to guess but give iot a try and don't lie to yourself. Now at the 5 year and 10 year forcast deplete you pensions by roughly 6% per year and then see what you may afford.
I did this, spent hours on it , looked for the good and the bad..... It has been 10 years now since I retired and thanks to a 3% inflation rate my list is good for several more years before hitting my cost predictions. This means we can enjoy retirement even more so. The old truth about saving for your future needs to be heeded to the nines if you want to enjoy those "golden years"

Effy wrote:
Math is math and of course your payments will be high on a 5 year note. That's a lot to cram into a short span. That's why they offer 15-20 year notes on RV's.That's why they offer 15-20 year notes on RV's. Sure you pay a lot more in the long run but the monthly sting is less and makes actually living on a budget manageable.

While shopping for our last two motorhomes (used) we continually ran into people who were suffering greatly because they took out a long term loan on a liability that depreciates far quicker than the loan balance. It's common to find really nice 6-10 year old rigs that are overpriced, and firm on the price, since they have a 15-20 year loan, and they owe tens of thousands more than the thing is worth. Saddest of all is the widows we met who can't handle the motorhome at all. They have never driven the thing, and would have no idea how to set it up on a site. They are now alone and saddled with a stupid mistake their husband made. Trapped in a mortgage that far exceeds the value of their motorhome, and have no idea how to get out of the mess.

Sure taking an irresponsible long term loan on a steeply depreciating liability WILL make the payments more "affordable" short term, but for many, situations change, and half way through a long term mortgage, they discover that they really managed to screw themselves pretty well.

time2roll wrote:

Chuck .. wrote:
Also, the Credit Union said it is a clever idea to get a loan or loans before retirement because if your income drops, you just might not qualify for the amount you requested.

Now there is some of the worst advice on retirement I have ever read. :(

Seriously. I have a buddy who is unbelievably bad at handling his finances. He desperately wanted to retire at 58 Y.O from a crappy job. He was too young for his SS, and took a steep discount on his small pension to start early. As a final act of stupidity, he trades in a perfectly good older motorhome and finances a new, very low end Class A. He does this based on his current income, then retires as soon as the motorhome is in his driveway. There is simply no way he can afford to own the thing is his retirement.

As for the OP's rant, take the advice of a few savvy folks here. Buy what you can afford to pay cash for. RVs are not an investment, they are a horrible financial decision and depreciate like a rock falling off a cliff. A new truck and fifth wheel might look like it's going to run $1800 a month for payments, but you can add at least another ten grand a year in depreciation on top of that, for the first 3-5 years. My motorhome was seven years old, with low miles, and in extremely good condition. It cost me exactly 1/4 of what a similar new one would be. Meaning that it lost roughly 10% of it's original purchase price every one of those seven years.

That's the going rate try paying for yours kids college also

Math is math and of course your payments will be high on a 5 year note. That's a lot to cram into a short span. That's why they offer 15-20 year notes on RV's. Sure you pay a lot more in the long run but the monthly sting is less and makes actually living on a budget manageable.

Searching_Ut wrote:
In the end, it really isn't about putting off life for a future date. It's all about finding the way to enjoy life to the fullest while staying within your current means. In doing so, I think your means will grow to the point where you can do so much more than you would have been able too.

Excellent advice for the young people out there... live within your means.