Travel Trailer Buying/Financing Questions

Ralph Cramden wrote:

1500 wrote:

Ralph Cramden wrote:

1500 wrote:


You want to not be poor? Don't spend 40k on a 20k item just because you don't have the 20k cash up front.

I pay cash for everything (house excluded), not because I make a lot, but because I don't.

not paying interest gets you more trips.

LOL, To finance $20K and pay back $40K that would be 31.6% interest. Are your financing with a credit card or a payday loan? (60 month term). Or are you talking about financing a $20K item for 120 or 144 months or something? You have to be a financial idiot to even consider it. A $300K class A is one thing, a $20K trailer another.

How about financing the $20K @ 3.9% for 60 months, total cost $22,046.00
Take the $20,000 cash and invest it for 5 years and turn it into roughly $27K (6% return per year), and very possibly a good bit more if you play your cards right, without getting too aggressive, for a 5K min profit?

LOL you are arguing about clearly made up exaggerated numbers. Then you got so distracted by those made up numbers that you didn't realize the point or did and made up a little strawman anyway.

Why yes if you want more money down the road you should invest it. Anyone can say "oh you can get 6% return", but most people don't actually know how to get that type of return. But that is just picking apart a strawman that can be ignored anyway.

The point is that you don't have 20k, so again for you, you don't have 20k to invest. Instead you take out a loan so that you can make payments. And as you didn't have the 20k to start, you either pay off the loan (hopefully early), or you sell it. With RV's you hope you can sell it at a price point just to get yourself out from under the loan. The average American has 38K in personal debt (not including home loans). That is what i was talking about.

So either people can continue to take out more loans and pay more interest, making what little money they have even thinner, or they can learn to live more within their means (or god forbid save for something, and yes save can mean invest) and actually stretch that small income farther.

But Like I already said, people can do what ever they want with their money.

LOL...no arguing whatsoever. You were the one who made up numbers, my numbers are accurate. You stated paying $40K for something that cost $20K. I put it in terms of a 5 year note and it would indeed take an interest rate @ what I posted. As far as that goes on a 10 yr loan which is fairly common now days for RV purchases, to pay $40K on $20K financed would take an interest rate of @ 17%. Its simple math.

Plenty of folks realize an averaged return on investments of 6%, typically more. They're called 401K plans and most of those people do not have an active role in the actual investment decisions, the only thing they're active on is the amount of the payroll deduction.

LOL of course they are made up numbers. Again, as you miss the point over and over again, you don't have that 20k to invest.

A 401k is for retirement, so pulling early gets you a penalty. So using that to pay of your short loan means you pay an extra 2k on that 20k you invested. Or are you really confused and mixing up just investing in the future and paying for your RV.

No one has said that you don't make more money investing.