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Old 10-18-2016, 05:57 PM   #1
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Brand: Still Looking
State: Nevada
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THOR #5601
Financing....who got what and where?

Howdy all,

Looking at buying a one year old unit for $92K and prob financing $67k out of it..... who got good rates recently and where? I'm looking into a 5 or 10 year term....
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Old 10-18-2016, 09:03 PM   #2
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Ally bank does a good job on a used unit.
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Old 10-19-2016, 12:54 AM   #3
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You may want to consider consulting a financial advisor before purchasing your unit. My coach is considered my second home, and gets me a nice tax deduction. The money I would have put down yields a nice return in an investment rather than getting lost in depreciation of a MH.

It also depends on how long you keep your coaches.

My first unit was ALLY, and my last 2 were American Financial. Rates depend on credit score and how many years to finance.

Food for thought!

PG
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Old 10-20-2016, 12:52 AM   #4
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THOR #5743
Credit Rating and Term Matters

Newbie, 1 month into ownership...
I was told 5% over a 20-year term is average. I would never pay over 20 years, but found out the lowest rates come with the longest term and no penalty for early payment.
The other factor (maybe obviously) is credit rating. Therefore...
with excellent rating and a 20 year term, I got a 3.75 rate. As someone else wrote, the interest is tax deductible (according to my tax guy), so that softens the thought of paying interest. Our dealer set up the loan through Bank of America.

Good luck.
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Old 10-20-2016, 01:52 AM   #5
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Just a point to ponder, unless you put down a lot more than minimum, a 20 year loan will have you seriously upside down from the start. That means you'll owe more than it is worth. It is rare that anyone keeps an RV for 20 years, and it is no fun to have to come up with extra $$$ to pay off the loan when you sell.

That's the dirty truth that no RV salesperson, or F&I person will ever tell you. You have depreciation that you wouldn't have with a home purchase. Buyer beware!
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Old 10-20-2016, 01:57 AM   #6
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Very true, Mr. Sunshine. But as I said, I don't actually plan on paying for that long; it will be paid off sooner, but that is how to get the best rate.
The only upside to being upside-down is in the unfortunate experience of a total loss; depending upon your insurance policy, gap insurance may cover. I'm not saying a 20-year term is the smartest fiscal policy, but if I pay it off in my time instead of the bank's term time, it's well worth the lower rate.
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Old 10-21-2016, 02:54 AM   #7
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Originally Posted by G-mo View Post
Very true, Mr. Sunshine. But as I said, I don't actually plan on paying for that long; it will be paid off sooner, but that is how to get the best rate.
The only upside to being upside-down is in the unfortunate experience of a total loss; depending upon your insurance policy, gap insurance may cover. I'm not saying a 20-year term is the smartest fiscal policy, but if I pay it off in my time instead of the bank's term time, it's well worth the lower rate.


Apparently I missed where you intend to pay that 20 year loan off sooner. That strategy can work, but only for a disciplined borrower. The OP is looking for a 5 or 10 year loan. My comments were not so much directed at you as much as intended more as a wake up for forum readers who are shopping and vulnerable to this unfortunate RV sales tactic. (The ad says only $XXX per month!)

The idea of collecting more from insurance than the current value depends on two things. First is having that feature in your coverage. That is a great feature, yet it comes at a cost. Second, you must have a total loss, which happens but is rare. Suggest everyone get out their insurance policy and read it!
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Old 10-22-2016, 07:03 PM   #8
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Originally Posted by seal13il View Post
Howdy all,

Looking at buying a one year old unit for $92K and prob financing $67k out of it..... who got good rates recently and where? I'm looking into a 5 or 10 year term....
Look at credit Unions, great rates.

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Old 10-22-2016, 08:41 PM   #9
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Quote:
Originally Posted by Mr Sunshine View Post
Just a point to ponder, unless you put down a lot more than minimum, a 20 year loan will have you seriously upside down from the start. That means you'll owe more than it is worth. It is rare that anyone keeps an RV for 20 years, and it is no fun to have to come up with extra $$$ to pay off the loan when you sell.

That's the dirty truth that no RV salesperson, or F&I person will ever tell you. You have depreciation that you wouldn't have with a home purchase. Buyer beware!
Great points.

What is the typical minimum down payment? I see Camplng World ads in MotorHome Magazine estimating payments based on 4.99%, 10% down, and 240 months, but figure that's not applicable to most buyers anyway. Plus it makes motorhomes look inexpensive until you figure much higher depreciation which leaves owner upside down.

I've heard rules of thumb that average motorhomes depreciate around 50% in first 5 years -- can't recall exact numbers. Do you know of data for typical depreciation rates in order to avoid going upside down?
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Old 10-22-2016, 09:47 PM   #10
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Looking also - Most finance places want to see good credit with 10% down. Figuring depreciation is tricky. If you buy a new "leftover" 2016, it's already a year or more old but nobody discounts them like they should. rv pricing and values on fb has some good info on this but they are biased toward buying late model used. I think that, over a 10 year period, putting down the least amount, maybe paying more than the minimum, and also investing an amount equal to at least the minimum rv payment might be a good strategy. Gap insurance might give some comfort about being upside down but at an additional cost.
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Old 10-22-2016, 10:00 PM   #11
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Are you ex-military? I got a great rate from USAA Bank (with nothing down).
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Old 10-22-2016, 11:12 PM   #12
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Yeah since motorhomes have an engine they take a big depreciation hit as soon as you drive it off the lot (like a car).

Even with 20 year financing, though, the lines do cross at some point (often long before 20 years). Thus even with 20 year financing you may only be upside-down on the loan for 5 or 10 years of it.

Also note that since RVs can be considered 2nd homes the interest is deductible.
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