Rv loan rates!

[mkasner]

Anyone looked at RV loan rates lately! For 800+ credit scores 8% or more! Even through local credit union. Who is buying these over priced RVs with these rates?

[jimh406]

Some people just don't trust themselves to to invest money. I agree those should pay everything off as soon as possible. However, those of us who are capable of investing can make money while others decrease their assets.

Both systems "work".

[nickthehunter]

valhalla360 wrote:

nickthehunter wrote:
I didn’t say “I had the cash on hand to pay it off”, I said “I had the money to pay it off”. As a matter of fact I even told you the money was invested and what it was invested in. And It’s still invested, and I’m still ahead by a wide margin. But like I also said, different strokes for different folks. You can be you and I can be me.

So when the market tanks and you need cash to pay the loan, you just locked in your losses.

Yeah, you can be you but just pointing out for others some of the risks of investing on margin.

First of all, I’m not investing on margin. Margin is when you borrow money to invest it. I had the money to start with and wasn’t over buying my bank account or may abilities to pay the tab. I made that clear a number of pages ago.

Second, I have the ability of “locking in my losses” (as you call it) at a 70% gain over the last 8 years, I’ll take that “loss” any day of the week. Remember, I still have the money to pay off the loan, plus another 70%+ I get to keep.

Just like you, I’m just pointing out to others, that Just because you can pay cash, doesn’t mean you should.

Today may not be a good time to buy, let alone take on a loan to buy. A year from now, or more likely two years from now, things could be completely different; along with the risk. To each his own.

[JimK-NY]

valhalla360 wrote:


So when the market tanks and you need cash to pay the loan, you just locked in your losses.

Yeah, you can be you but just pointing out for others some of the risks of investing on margin.

I have the same issue with a $350K mortgage. The money I would have spent on the house has made me about $150K since 2013. I also saved a bit on taxes with itemized deductions.

Now that the markets have slowed down, I may not break even for a few years but I am in no hurry to pay off the mortgage. Long term my investments are highly, highly likely to cover the 3.2% mortgage and give me even more yields.

That said, I would agree this is a very poor time to borrow at relatively high rates to finance an RV. In fact, IMO, potential buyers need to think twice. If we enter a period of recession and higher unemployment, how safe is your income? If you need to stop the payments and sell your RV, how big of a loss are you willing to accept?

[restlessways]

wing_zealot wrote:
..."But those days are gone. Your plan won't work for anybody moving forward...
What you are saying is companies will not make a profit in the future and stock prices will cease to go up (for now and in the future). (My money is invested in the market also) When that happens, RV Loans will be the least of the problems; for you, me, Nick, and everyone else.

Exactly. Prepare for what's coming.

[valhalla360]

nickthehunter wrote:
I didn’t say “I had the cash on hand to pay it off”, I said “I had the money to pay it off”. As a matter of fact I even told you the money was invested and what it was invested in. And It’s still invested, and I’m still ahead by a wide margin. But like I also said, different strokes for different folks. You can be you and I can be me.

So when the market tanks and you need cash to pay the loan, you just locked in your losses.

Yeah, you can be you but just pointing out for others some of the risks of investing on margin.

[wing_zealot]

restlessways wrote:

nickthehunter wrote:
To answer the question, I can write off 100% of the interest on a second home. However, that doesn't put me over the top for exceeding the standard deduction. So financing to write off the interest gains does absolutely nothing for me. That overall is probably a bad strategy. At most, if you paid $1,000 in interest in a year, it would net save you $370 in taxes (37% or less depending on Taxable Income).

But keeping my money invested and using other peoples money while only paying them 4.49% in interest is a winner. The money I kept invested is right now worth almost 70% more over the last 8 years, and that is even after it went down over 36% last year.

Now to head off the naysayers, the money is invested in a Roth IRA, total market index fund (VTSMX). I've had the fund for about 20 years, nothing fancy, moderate to above average risk. If I was going to pay cash for the RV, this is the fund the money would have come out of.

Sure, during the biggest everything bubble in the history of mankind. Even a monkey couldn't go wrong with what the FED was doing by artificially repressing interest rates and juicing asset prices. But those days are gone. Your plan won't work for anybody moving forward. In fact it will financially destroy them. Eveybody's a financial genius when the FED is printing.

..."But those days are gone. Your plan won't work for anybody moving forward...
What you are saying is companies will not make a profit in the future and stock prices will cease to go up (for now and in the future). (My money is invested in the market also) When that happens, RV Loans will be the least of the problems; for you, me, Nick, and everyone else.

[nickthehunter]

valhalla360 wrote:

nickthehunter wrote:

valhalla360 wrote:
Operating on leverage works great until it doesn't...then it multiplies the losses. The ones talking about being savey, always gloss over this part and it would never happen to them...until it does.

The trick is to get ahead of the game. Once you have no loan payments, it's easy to save up for big ticket items.

Even when the market goes down, I still have the money to pay it off; and still get to keep the difference on what I already made.
I have a 15 year RV loan at just over 4% that I've had for about 8 years. I'm way ahead of the game at this time. Today, I can pay it off any day I want, and still keep a pretty nice sum of money.
What it boils down to is: What works for you, doesn't necessarily work for everyone else. There is not only one right answer.

Ummm...if you have the cash on hand to just pay it off, you are foregoing the roi on that cash to protect you from being leveraged.

I didn’t say “I had the cash on hand to pay it off”, I said “I had the money to pay it off”. As a matter of fact I even told you the money was invested and what it was invested in. And It’s still invested, and I’m still ahead by a wide margin. But like I also said, different strokes for different folks. You can be you and I can be me.

[valhalla360]

winnietrey wrote:
Way too much talk about money and way too little talk about life.

First, I do not want to pay interest. I avoid it if at all possible. But I value life more than money.

Better to pay a little interest, than wait in my opinion. Kids grow up we get old. I am a fan of do it while you can.

Funny how not paying extra interest, you can have more time and money to spend with the kids.

It's amazing how restrictive it is being tied to monthly payments and how a little interest tends to hang around for decades as the next item you want now pops up.

[valhalla360]

nickthehunter wrote:

valhalla360 wrote:
Operating on leverage works great until it doesn't...then it multiplies the losses. The ones talking about being savey, always gloss over this part and it would never happen to them...until it does.

The trick is to get ahead of the game. Once you have no loan payments, it's easy to save up for big ticket items.

Even when the market goes down, I still have the money to pay it off; and still get to keep the difference on what I already made.
I have a 15 year RV loan at just over 4% that I've had for about 8 years. I'm way ahead of the game at this time. Today, I can pay it off any day I want, and still keep a pretty nice sum of money.
What it boils down to is: What works for you, doesn't necessarily work for everyone else. There is not only one right answer.

Ummm...if you have the cash on hand to just pay it off, you are foregoing the roi on that cash to protect you from being leveraged.

[jimh406]

CWilson wrote:
They would remove the masks when going into the rig.

Nice that they were compliant. 😉

[CWilson]

wapiticountry wrote:
The “buying of toys” was an anomaly during the Covid restrictions. Many were bought with cash by people who will never miss the money. Vacation options were virtually eliminated. No cruises, no trips to Europe, no Broadway shows while eating in 5 Star restaurants and staying at the Ritz. Spending $25,000 or more for an RV didn’t stress them out, it was what they would have spent anyway. Only difference is they had something more tangible than photos and memories when their vacation ended. Some will have enjoyed the experience and add RVing to their vacation options, others will park it and never give it another thought and some will sell. None of the buyers from this demographic are going to be forced to liquidate due to financial hardship.

LOL.........
I think I ran into some of those folks when state parks here reopened after the initial Covid shutdown. A new Super C pulled into the site beside us with a couple and two 14ish year old teenagers. All piled out and immediately donned masks when they hit the great outdoors. Later that evening they sat around the campfire wearing masks, one at the 12 oclock position, one at 3, one at 6, and one at 9, all 6' apart. They would remove the masks when going into the rig. It was special. Morons.

[wapiticountry]

The “buying of toys” was an anomaly during the Covid restrictions. Many were bought with cash by people who will never miss the money. Vacation options were virtually eliminated. No cruises, no trips to Europe, no Broadway shows while eating in 5 Star restaurants and staying at the Ritz. Spending $25,000 or more for an RV didn’t stress them out, it was what they would have spent anyway. Only difference is they had something more tangible than photos and memories when their vacation ended. Some will have enjoyed the experience and add RVing to their vacation options, others will park it and never give it another thought and some will sell. None of the buyers from this demographic are going to be forced to liquidate due to financial hardship.

[winnietrey]

Way too much talk about money and way too little talk about life.

First, I do not want to pay interest. I avoid it if at all possible. But I value life more than money.

Better to pay a little interest, than wait in my opinion. Kids grow up we get old. I am a fan of do it while you can.

[JimK-NY]

When it comes to their toys, which includes RVs, a great many people are caught up in dreams and desires and they want what they want and are willing to pay for it.

When it comes to RVs this has several outcomes. Again, they want what they want and are willing to pay for it. That results in a typically strong market for new RVs and a relatively weak market for used RVs. That also results in a high depreciation rate. Next when buying new, desires and skillful sales reps result in many people buying more than they really need. All those amenities and current decor mean spending more and more and often getting units that are homes away from home rather than just an RV.

All those desires and dreams often end up in disappointment. Often the buyers have very limited experience and later find they are less interested than they thought. Taking the kids camping sounds great when they are younger. As they approach teenage years, forget it. The last thing they want is a vacation cooped up with the parents. Again more used RV supply.

For those willing to use some reasoning when buying there are strong lessons. First don't buy until you are sure the big expenses and commitment will be worth it. Next don't overbuy. Buy something smaller, easier to use, and less expensive. Really consider buying used. You will take advantage of that massive initial depreciation. You might get a unit where the warranty repairs have taken care of some of the shoddy construction and poor materials.

As to paying: with rising interest rates it becomes way more expensive to borrow. The idea of borrowing at low rates and investing that money is not reasonable at this time. It is easy to become overextended. Now it not the time for that. In fact those who think they can afford to borrow or to pay with cash need to really think it through. We have had a great many years with low inflation, low interest rates and a booming economy. There clearly are going to be some adjustments in the economy.