Just my opinion

[Locky]

I have noticed quite a few times on this forum when people talk about financing a travel trailer they will get responses saying "save up and pay cash". Well here is my take on it:
I will use my exact scenario. I bought my trailer new in 2006 for $14,000. I financed it for 10 years and when my trailer was all paid for my total amount was $18,651. So it cost me on average an extra $38.65 a month in interest. I think that was money well spent to spend the quality time i have had with my kids and now grandkids. So for the ones on here that always bring up the stupid comment about saving up to pay cash for that......well enjoy sitting at home saving while the rest of us are out enjoying mother nature and making memories with our family.

[Wagonqueen_Truc]

I think that the cost of financing is absolutely sometimes worth it to enjoy something you otherwise might never be able to afford. I financed my home. Mortgage was cheaper than the going rent rates. sound investment. I also financed my second home in Florida. I bought in 2009, when the housing market imploded. Worth the extra stretch of finances since I bought a 250K for 40K. Extremely sound investment. I financed a travel trailer years back. The new TT literally rotted out within 4 years. Had 2 more years to go. Paid $16,000. Sold $500 just to get it off my property. BAD investment. Did I have fun with my kids those 4 years? Yea, I did , BUT, Would I finance a TT again? No! The problem is most of the manufacturers build their RVs to only last a few years. Do your due diligence folks. Take a look at what your favorite camper is built from... cheap sandwiched luan floors, thin framing, fiber board that screams... please water, infiltrate me, so I can start bubbling. Compare apples to apples and oranges to oranges. Not all manufactures make a good product.

[philandterri]

When we purchased our stick built house, we didn't save until we had enough cash for the purchase. Same with our RV's. Enjoy while you can.

[Cobra21]

A lot of posters on this topic are in the southern U.S. I would do a loan for a camper or boat if need be. But up here in Minnesota, I don't like having a loan on a camper or a boat that is so seasonal. It's no fun making payments on something in storage.

[et2]

Who cares what others think. Do what works best for you. Pleanty of people have financed and still were able to go on with their lives. Many payed cash, great for them. It doesn't make them or the latter any different ( other than attitude or perceived bragging rights). Many retired people have financed rigs. Just plan it right and let it work for your needs.

WHO CARES?? We're all going out the same way 🙂

[troubledwaters]

rk911 wrote:

wing_zealot wrote:
Here's my scenario. About 14 years ago I bought my last camper. I financed at 4.2 percent. I kept the "cash" invested. Over the 12 year life of that loan my "cash" earned over 7 percent average annualized return. I am ahead about 5 percent per year. Paying cash forme would have been dumb.

your math works except you haven't taken risk into the equation. risk that your income stream will slip or disappear; risk that something else in life will rear its ugly head necessitating a change. risk. my wife and I were "normal" for a long time. car loans; RV loan, this loan, that loan. then, as Dave Ramsey would call us, we became weird. we paid off the house, started paying cash for cars and yes, we saved, saved, saved for what will likely be our last MH and paid cash for it. the other end of that stick is save, invest, save and then invest more. live beneath your means so later you can pretty much do as you please.

When you consider a loan at 4% ± vs. a well balanced stock and bond portfolios long term average annual return of 7.5% the risk is pretty low. The other side of the coin is, you haven't considered the risk that a period of high inflation could keep moving that target just out of your reach. Then it becomes like the carrot and stick, you can never quite catch that carrot. Seems to me the risks are about the same either way.

[TomG2]

When a neighbor purchased a farm, both his daddy and father in law offered to buy it for him. My dad paid on a thirty year mortgage for our place. Which one was "right"? Both. A lot depends on your circumstances.

[Fizz]

The people who get in heavy dept using credit are the ones who charges everything on their VISA and make minimum payments

My basic rule is if I need it and I'm low on cash, charge it.
If it's a want, I save up for it.

A replacement for my flat screen TV is a 'need', charge it if I have to.
A 78" super duper TV is a 'want', I'll save up for that one.

[DryCreek]

Well, no matter *how* you purchase your RV, just keep at it!
Oh, and make sure that you buy a Winnebago product. On a Ford chassis. I want them both to be a going concern so that I can readily get parts for my current RV, for years to come!

[WTP-GC]

As much as I hate this statement...different strokes for different folks.

I've been through the Dave Ramsey course and applied it to our lifestyle for a period of time. Despite what anyone would say about his programs and advice, the one fact is that following his guidance will not get you in trouble. Not to say that its always the best advice for you at whatever stage of life you're in, but it simply won't "get" you in trouble.

One thing to keep in mind about Dave Ramsey is that its easy for a multi-millionaire to pay cash for everything, avoid credit cards and debt. But then again, there are a great big pile multi-millionaires that have achieved their success for leveraging debt and holding cash. So what may work for you may not work for me. And that's up to you and me to work out ourselves. You'll note that over the years, good 'ole Dave has modified his positions on some issues.

For a period of time in our life, we had paid off all debt on everything except our mortgage. We were living just fine and had the things we wanted. But then when we started our construction company, things changed. As an industrial general contractor, cash is king and the sureties/banks/accountants mandate that we hold cash. That means we have to finance anything more than about $10K. Just the way it is. Other types of contractors that don't have to worry about bonding and such matters can spend out their cash, especially if they need some tax breaks.

So relevant to this thread, yes, we financed our 5er, but not because we didn't have the cash. Once size does not fit all.

[Grit_dog]

Oh geez. Is it camping season yet???

[Old-Biscuit]

Have only done long term financing on S&B mortgages.

Paid cash for every vehicle I have bought.....bought what I could afford.
Some times financing for couple of months then pay it off

Paid cash for RV over the years....bought what I could afford.
Never financed a 'toy' and never missed out on camping trips

Paid cash for guns/rifles/ammo supplies for my hobby of Cowboy action shooting & competitions-----worked OT for those toys

Used credit cards for other items....paid them in full at due date.

Have stayed Debt Free majority of my life by living off of my take home pay, paying myself like a regular monthly bill, paid extra each month on mortgages so they get paid off sooner, worked OT for extra cash and invested 21 'percent' of wages each month until retirement at 50 yrs old.
(Can't use the 'symbol' :S )

All done on middle income wages.....lived within means and never lacked for cash to purchase toys. Just takes willingness to NOT get caught up in the hype of 'needed all the newest stuff/being in hock up to ones ears' (love that old commercial) :B


I am a 'cash' man and have credit score over 800.

[NYCgrrl]

westernrvparkowner wrote:
The vast majority of Americans can and do use credit responsibly. The Dave Ramsey approach is similar to Alcoholics Anonymous, Gamblers Anonymous and Narcotics Anonymous. There are people who cannot handle Alcohol, betting, drugs, and yes, money. For that segment of the population, total abstinence is often a great solution. However, for each Alcoholic, each compulsive gambler and each drug addict there are hundreds of people who drink alcohol, go to casinos or take pain medication without spiraling out of control. The same with credit. Used properly credit allows us to buy houses, invest and grow businesses and yes, get some instant gratification. And the vast majority of those people who have used credit to buy RVs do not end up eating cat food in their senior years.

Thank you for stating clearly and compassionately what many have thought.

[DownTheAvenue]

kohai wrote:
You're assuming it is an either/or scenario: either I buy it now or I wait 10 years and pay cash and miss the opportunity. That's a false dichotomy.

How about a third option? Find a way to pay cash, sell something, get a second job for awhile, spend less on other stuff. The average car payment in America is over $500 a month -- drive something else.

Your interest rate calculates out to 3.3ish. What if someone with less than quality credit does this at 8 percent - 10 percent? Is it still a good idea? What if it's a $80,000 trailer instead of $14,000? Still a good idea? Your scenario is a bit of a straw man argument.

What if you had invested that $4,000 over a 10 year period? That's missed opportunity not included in your calculations. You really missed out on $4,000 plus what you could have done with that $4,000 to make more money.

As my grandmother said about interest, those that understand it
get to receive it and those that don't understand it get to pay it.

here is someone who understands.

[Lantley]

westernrvparkowner wrote:
The vast majority of Americans can and do use credit responsibly. The Dave Ramsey approach is similar to Alcoholics Anonymous, Gamblers Anonymous and Narcotics Anonymous. There are people who cannot handle Alcohol, betting, drugs, and yes, money. For that segment of the population, total abstinence is often a great solution. However, for each Alcoholic, each compulsive gambler and each drug addict there are hundreds of people who drink alcohol, go to casinos or take pain medication without spiraling out of control. The same with credit. Used properly credit allows us to buy houses, invest and grow businesses and yes, get some instant gratification. And the vast majority of those people who have used credit to buy RVs do not end up eating cat food in their senior years.

Well Said

[BizmarksMom]

I avoid debt at all costs. I don't even carry a mortgage on my house. I car camped and tented it for years until I could afford to buy a travel trailer outright. FWIW, I see lots of extended families having a great time tent camping.

That's me, my paranoia, and my finances. I refuse to get into other people's finances. I'll handle me, and let you handle you.