Did I make a mistake in Financing? How long do you finance?

[yankeeslover]

oh boy....stupid me.... purchased my camper last summer... 2014 primetime rv... first camper ever... I didn't know any better... none of my family members nor friend camp or own campers so this was my wife and I sole decision...anyways, stupid me, not knowning any better financed this camper for 12 years... I didn't know any better.. spoke to my credit union for the financing and they told me most people finance these for 12-15 years..
I admit, I should have researched more, but I didn't... has anyone else made a big boo-boo like this? and no, I cant afford to double up on my monthly payments right now to pay off sooner... do these campers with proper care, generally last this long? I don't want a camper breaking down in two years with ten more years of payments...how bad are they to trade in? do they depreciate just like a car?
I know its all too late now and we cant change this, but im just wondering if anyone else has ever made a boo-boo like this and financed the camper this long? or am I the only poor sole...LOL

[RandACampin]

Most people don't worry about what others do and just enjoy their camper. If your happy with your terms and purchase good for you. If you always compare your actions to others you worry for nothing.

[Ron3rd]

10-12 years is very common.

[APT]

You got what you got. Enjoy the camper. It should last with proper care.

I do recommend investigating a refinance. I do not know your loan value, but you might be able to get the loan term and interest rate lowered saving you money over that 12yr period. For example 10 yr at 5.25% is very close to the same payment. Find out what you might qualify for at your credit union for 8-10 year loans.

[v10superduty]

sherpaxc wrote:
I made the same mistake with a truck. Impulse buy and I was upside down. I ended up selling it, cutting my loses, paying off what I owed and calling it a lesson learned. I then saved up and bought a pop up camper for 5k.

Please don't expect to pay 15 years on that thing. It's not worth it. Everyone makes mistakes, but your's can be fixed. Cut your losses and sell it.

So this guy who obviously wants to go camping has a brand new camper in his yard at a payment he can afford. He is going to pay a whack of interest if he doesn't re-fi lower or make some extra payments BUT he has a camper he can afford..

He is badly upside down and your "advice" is to sell it now at a loss, still owe probably quite a lot, don't get to go camping but keep making payments on something you don't have? :h

Sorry, but I can't agree and doubt he will take this advice..

[Kip81]

yankeeslover wrote:
I am the original poster and I just looked up my loan again...Oh boy... checked my interest rate... its a whooping 9.99% and was for 15 years, not 12... maybe I got taking for a ride, maybe this camper ends up costing twice as much... but you know what? im gonna have fun... im not gonna sweat it... I can afford the payment..

I agree with this. If you happy and can afford then go for it.

[time2roll]

12 year financing is very common. 20 year was common and might be still available.

If you cannot afford double payments then the 12 year loan is the correct financing for you. A shorter loan would only increase your payments.

Yes the trailer will last 12+ years as long as you take care of your stuff. Good luck if the extended family gets invited.

The first 50% of value depreciates fairly quick then it will slow a bit. Go to NADA and find your model 10 years old to get a rough idea. No worries. Just enjoy the time you have before the kids are grown and gone.

[dave54]

Financed for 7. Paid off in 3.
Pre approved by the credit union before we started shopping.

[Cotay]

Just because you finance for a set period doesn't mean you can't pay it off earlier. We have a 15 year loan on our TT, and plan on having it paid off within 2 years. There should be no prepayment penalty on most RV loans.

[bradnailer]

You could calculate what your interest charge will be with your 12 year loan then calculate it based on 6, 8 and 10 years. With those numbers, you can see how much it is costing you to finance for 12 years versus shorter terms. When you do that, at some of today's low interest rates, you may find that it is only costing you a few hundred dollars for the 12 term. They you can say, hey, ain't that big a deal.

Enjoy the new trailer, that's the mainest thing.

[sherpaxc]

I made the same mistake with a truck. Impulse buy and I was upside down. I ended up selling it, cutting my loses, paying off what I owed and calling it a lesson learned. I then saved up and bought a pop up camper for 5k.

Please don't expect to pay 15 years on that thing. It's not worth it. Everyone makes mistakes, but your's can be fixed. Cut your losses and sell it.

[2oldman]

yankeeslover wrote:
I cant afford to double up on my monthly payments right now to pay off sooner...

If you can't afford to double up, then you got a finance plan you *can* afford. Enjoy your camper.

[M_GO_BLUE1]

yankeeslover wrote:
M GO BLUE.... I pay roughly $225.00 per month...If I divide by 12 that comes to $19.00...if I pay $20.00 more per month, what will this acchive? will that even put a dent in what I owe? im just courious...... thanks...

This translates into one extra payment per year and since most consumer loans are a simple interest product the more you pay aboveand beyond the required monthly payment goes directly to principal amount so each month when you make your payment an increasing amount goes to principal and less to interest...

The one extra payment per year will cut ~ 2 years off your loan...

[JordanH]

Common term around here is 20 years which I think is absolutely crazy! 12 years dont sound so bad to me! I purchased my camper with cash, used.

[beemerphile1]

Some really scary calculations;

$225 x 12 = $2,700 per year
If you camp two nights every weekend for five months of the year that makes 43 nights.
Divide 43 nights into $2,700 = $62 per night
But will it really get used 43 nights per year? Will anyone camp every weekend for five months a year? Unlikely.
Maybe you will camp every other weekend, now the per night cost is $114.

Now add in lot rent, insurance, and the myriad of other costs.

Also consider that most new RVers use their purchase frequently for the first couple of years and then use declines.

All goes to say that RVing is a very expensive hobby and impossible to justify financially. The only ones that can financially justify the cost are full timers that sell their home.

JJBIRISH wrote:

End of year – approximate depreciation…
1 - 18%
2 - 10%
3 - 7%
4 - 6%
5 - 6%
6 - 5%
7 - 5%
8 - 4%
9 - 4%
10 - 3%
11 - 3%
12 - 2%
13 - 2%
Salvage Value, condition…

Pretty good argument in favor of buying two or three years old RV rather than new.

[JJBIRISH]

I can’t predict if you made a mistake, that is your job, but I can give you my opinion on where you might stand and why…

Here is the problem, unless you put a huge down payment on it, which doesn’t seem plausible, you were already under water the day you left the dealer with it… the water gets deeper for about the next 5 or 6 years before it stabilizes for many more years to follow… at 15 years chances are you will be underwater for the life of the loan… the window for refi at lower rates and shorter term is very small unless you can add some cash to it… while this is a generalized statement, I believe it will be true no matter what numbers to put in…
How I figure the value of the unit compared to the value of the loan will estimate the depth of the water…

If you use the MSRP, and you have to remember no one actually pays that price…

But if you are going to go by that (for easy math), the MSRP less 30% when pulled off the lot, - another 10% by the first years end will closely give you the current value of you unit… deduct another 6% for the second year…

But no one buys at MSRP… so the depreciation curve I use from new that seems to work fairly well on almost all types of RV’s from their selling price, works something like this through and to salvage value at the end of the 13th year…
MSRP minus 20% discount and a minimum or no down payment…

End of year – approximate depreciation…
1 - 18%
2 - 10%
3 - 7%
4 - 6%
5 - 6%
6 - 5%
7 - 5%
8 - 4%
9 - 4%
10 - 3%
11 - 3%
12 - 2%
13 - 2%
Salvage Value, condition…