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

[v10superduty]

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..

Hey, its done.
Can't be undone now.
Enjoy the time with your family.. 🙂

In my opinion the only mistake you really made was posting info here and getting beat up over it.

You have to stick to what you said in this post and live with the situation and make the best of it.


Edit--personal message sent...

[alexleblanc]

i'm probably the minority here, but it's my opinion if you can't afford to finance it for 5 years or less you either need to wait to put a bigger DP or buy a less expensive unit. Over 5 years you end up paying way too much interest and also end up being upside down on the loan for too long imo. I finance my last unit for 5 years and traded up last August to a larger unit and had it financed for 39 months so i'll end up having it paid for close to when our last unit would have been as per our original plan. the guy at the dealership was blown away that we didn't want a "lower payment" with the longer term.....

[v10superduty]

spike99 wrote:
.

Financing RV/TT? NO more than 3 years. If I cannot pay for it within 3 years, then I buy a lower cost unit. And if I buy "well used" and fix it up myself, that's ok too. After all, a TT is only a box - to sleep in. For recreational items, its all about living under one's income limits and NEVER impulse buy.

Same with my pre-owned power boat. < 3 years payments. Little things like kayaks / canoes are cash only.

Vehicles? 0% finance at max 5 years. Most of the time, we do 0% in 3 years as well.

House is paid for and its internals are paid for as well. Nothing owing on credit cards either.

If wondering, single income (in lower middle class) of family of 5 - with one in remote collage.

Unlike many, I don't waste dollars on GM Vehicle On-Star, do lots of coupons (my wife is coupon queen in my little village) and we wear used cloths / shoes. 2nd hand store has my phone number on speed dial. Behind her counter, she has our list of things we're looking for. If an items comes in that's on my list, she calls me - to look it over. And, I wear lots of cloths / shoes that my older brother wants to throw out. And, I'm always "surfing my area" for free things. Just last fall, I got 2 x cords of FREE firewood. 4 years ago, I got FREE roll of steel (from removed above ground swimming pool) and installed in my garage wall as a back-splash / behind my work bench's power grinder area. Free parts for my garage / shop as well. And during summer months, I'll do the odd "dump runs" for my friends and collect a few dollars from each. Giant smiles when making $25/$40 CASH during a single lunch time dump run…. And, I've been known to Cut/Trim neighbour's grass for $25/$30 a shot as well.

Financing RVs/TTs over 5 years is silliness… For me, < 3 years. Never more for a box.

Spike, Spike...

You have done well.. Good for you owing nothing...
He didn't ask for a lecture on what NOT to do...
If you read and comprehended OP he said he could not afford shorter term...

[yankeeslover]

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..

[beemerphile1]

jessjerr1831 wrote:
I don't understand the response, from beemerphile1 especially the parts about "I pay cash" and "some people like being in debt". Some of us do what is financially beneficial to ourselves. I have payed cash for large items and have also financed and payed off early. I don't see the benefit of taking cash out of savings if my savings is paying me more interest then what i would pay in interest for borrowing that amount.

First off, you only quoted part of what I said. I did not say they should have paid cash. I said that even though I do pay cash, I don't understand their concern. All the OP needs to do is buckle down and make extra payments. Rice and beans for lunch and dinner with mac-n-cheese for breakfast will get the job done. The only other alternative is to sell the thing. If they can't afford extra payments they sure can't refinance for a shorter period.

If you have any tips on savings I sure would like to know where these risk free savings accounts are that pay more interest than a loan. Currently a typical bank savings account pays around .05% and a typical RV loan is in excess of 5%. That is a big spread and that is where banks make their profit. Market investments are not a valid comparison because of risk and uncertainty of gain or loss.

[aarond76]

If you financed it for 5 yrs but could not make the 5 yr payment, they come and reposess it and ruin your credit. You financed for 12 yrs but can still pay it back early if you have the means to do so. Don't sweat it.

[WyoTraveler]

rbpru wrote:
Most of us have to finance at a payment we can afford.

My wife and I always set up a simple interest loan. This allows us to pay on the unpaid principle, so if future finances allow, we can pay down quicker, this in not always possible with a pre-computed loan.

Our priorities for the TT purchase were TV capacity, acceptable floor plan and affordable monthly payment. If it did not fit any of the above, we passed.

It still is but loan companies hate it. We are doing that now. Every time we make a bulk principle payment they have to re-calculate. They did everything they could to stop us but our loan says "no payoff penalty" Once we accused them of fraud and informing banking board they got the message. One principle payment equal to the value of a payment may be several months in payments.

[spike99]

.

Financing RV/TT? NO more than 3 years. If I cannot pay for it within 3 years, then I buy a lower cost unit. And if I buy "well used" and fix it up myself, that's ok too. After all, a TT is only a box - to sleep in. For recreational items, its all about living under one's income limits and NEVER impulse buy.

Same with my pre-owned power boat. < 3 years payments. Little things like kayaks / canoes are cash only.

Vehicles? 0% finance at max 5 years. Most of the time, we do 0% in 3 years as well.

House is paid for and its internals are paid for as well. Nothing owing on credit cards either.

If wondering, single income (in lower middle class) of family of 5 - with one in remote collage.

Unlike many, I don't waste dollars on GM Vehicle On-Star, do lots of coupons (my wife is coupon queen in my little village) and we wear used cloths / shoes. 2nd hand store has my phone number on speed dial. Behind her counter, she has our list of things we're looking for. If an items comes in that's on my list, she calls me - to look it over. And, I wear lots of cloths / shoes that my older brother wants to throw out. And, I'm always "surfing my area" for free things. Just last fall, I got 2 x cords of FREE firewood. 4 years ago, I got FREE roll of steel (from removed above ground swimming pool) and installed in my garage wall as a back-splash / behind my work bench's power grinder area. Free parts for my garage / shop as well. And during summer months, I'll do the odd "dump runs" for my friends and collect a few dollars from each. Giant smiles when making $25/$40 CASH during a single lunch time dump run…. And, I've been known to Cut/Trim neighbour's grass for $25/$30 a shot as well.

Financing RVs/TTs over 5 years is silliness… For me, < 3 years. Never more for a box.

[the_bear_II]

We had several RVs that have lasted over 20 years with no major problems. Routine maintenance is the key to an RV lasting a long time.

[bid_time]

beemerphile1 wrote:

bid_time wrote:

JesLookin wrote:
Financing for 12 years is OK. Figure out what the payments would be to pay it off in 6, 8, 10 years & make those payments and pay it off early. OR - Our local credit union has loan sales a couple times a year where you can refinance your camper at a lower rate.

Why do you suggest with no information to pay it off early? I financed mine for 12 years at 5.55%. Over those same 11 years now, my investments earned 8.08%. One size fits all advice don't work.

Maybe because the OP is obviously stressing over the twelve year payback period. The OP asked for opinions.

He also said he can't afford to double up on payments and pay it off sooner. One size fits all advice still doesn't work. You don't even know what interest rate he is paying - that would be a beginning point at the very least.

[bob_nestor]

RVs are more like cars than homes in that they depreciate over time rather than appreciate. One big problem though is the cost which is more like a home than a car. Because of this banks and dealers offer longer term financing, but it is quite possible that the buyer will be underwater on the RV purchase. If you're planning on keeping it for a long time, taking care of it, trading before paying off or paying it off early then being underwater may not be a big issue. But being underwater can be a big risk if you ever get into a financial bind and have to get out from under the loan.

Personally I like to try and keep from being underwater on my RV purchases which generally means making a bigger downpayment, financing for a shorter period of time and paying it off early.

[ddschuman]

BTW, I checked with my credit union before sending double payment to make certain that any amount over the regular payment amount is in fact applied to principle...with our loan, it is. On the statement they send me every month, it shows the extra principle payment as well as how much of my regular payment was applied to interest and how much to principle. I never write 2 checks but 2 checks may be the way to go if dealing with a loan company.

[ddschuman]

We financed for 15 with the goal to have it paid off in 7 or less. It may work...it may not. So far so good at a year of double payments but if times ever get tight, I feel my regular payment is affordable to me and I can still enjoy camping. Through our credit union, the rate was the same on an RV no matter if you financed for 5 or 15yrs...it was a no brainer to us to be able to ease up finances if need be. It gives me total control to pay as little (at least minimum payment) or as much as I feel like I can. I just keep the early payoff in mind and strive to achieve that. If you get an income tax refund (unfortunately, we don't), you could apply a extra payments that way. If not, do your best to send a little extra with each payment or as often as you can.

I have seen many rigs on this forum that still seem to be going strong at 10-15 years (or more in some cases), so I don't worry. The most important thing is upkeep/maintenance. Keeping it under cover when not in use will protect the outside (including roof, coloring & decals etc.) from sun and other weather related damage.

[rbpru]

Most of us have to finance at a payment we can afford.

My wife and I always set up a simple interest loan. This allows us to pay on the unpaid principle, so if future finances allow, we can pay down quicker, this in not always possible with a pre-computed loan.

Our priorities for the TT purchase were TV capacity, acceptable floor plan and affordable monthly payment. If it did not fit any of the above, we passed.

[jessjerr1831]

I don't understand the response, from beemerphile1 especially the parts about "I pay cash" and "some people like being in debt". Some of us do what is financially beneficial to ourselves. I have payed cash for large items and have also financed and payed off early. I don't see the benefit of taking cash out of savings if my savings is paying me more interest then what i would pay in interest for borrowing that amount.