Financing an older RV- 15+ years??

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cbwell

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I've been RV shopping for a while now and thought I had settled on a 2005 country Coach Magna.  But, i started calling around to the usual RV Loan banks and nobody offers financing for anything older than 12 years and most are 10.  I've searched around at multiple credit unions as well and they want something even newer.

Does anybody have any recommendations or do you simply need to write a check for a rig of this age?  If so, I guess I'll be looking at 2008 or newer which starts to put Country Coach out of my budget. 

Thanks
 
My best suggestion is to try local banks and credit unions, either that or finance using other property as collateral.  I financed my current coach through a local bank when it was 14 years old, though I did finance for only 4 years, and I have a substantial relationship with that bank.
 
If that is an option to you, try to use a home equity or a personal line of credit. They usually have lower interest rates.
 
Thanks guys- good suggestions.  I hadn't thought about a home equity loan- very low rates right now, also.
 
Probably an over kill here but finances are important.

A home equity line of credit is a great way to go. You only pay interest when you use the available funds which can be prime plus 1% (currently 3.25% plus 1% = 4.25%) and you can use the funds for anything. A lot of homes are going up in value at 4% to 7% so it's a no-brainer.

Pay off all your dept having higher interest rates if you can. Pay everything with a credit card that pays you 1.5% to 5% back and pay the balance off every month. It's free money if you only buy stuff you would only buy if you were paying with cash. It's also easier and safer than carrying cash.

You can get a 15 year mortgage at 2.5% now which is cheap money. If you can make an extra payment or two each year you will own your home pretty quick. Most financial experts say not to pay off your home but I did and my house is going up about 7% a year which I'm happy with and not paying rent or a mortgage payment is nice. I can also sell it and pay zero taxes on the appreciation.

RV's are not a good investment but you only live once so have fun but buy smart. Being able to get a cashiers check at a bank with the seller and getting a signed title protects you and the seller. More importantly, you have negotiating power because money talks and... well you know. If you don't get the price you want, walk away and find another RV. A lot of sellers will trade in their RV with a dealer to avoid the whole selling situation even when they know the dealer is only giving them half of what the RV is worth. Use this to your advantage.

 
SeilerBird, we should not make judgements about financial responsibility of his actions without knowing the full picture.  There are many valid reasons why one might choose to finance an RV vs taking the time to save up to pay cash, that have little to do with ones ability to repay the loan.  In my case I choose to finance over 4 years due to not wanting to take a capital gains tax hit on liquidating stock, this being just one example, even with the interest payments this saved me a couple of thousand dollars in taxes.   
 
I realize there are occasions where people want to finance something to save on taxes or whatever. However I have read too many stories from people with a great financial wisdom financing an RV and then getting stuck because the economy changed. Financing an RV is a recipe for disaster, no matter how smart you think you are.
 
Well, 1 thing is for certain, if no 1 ever financed an RV, there would be a lot more open spaces at NPs, SPs, & BLM campsites. Of Course, it would be much harder to get an RV because most RV manufacturers would be out of business, including private campgrounds, and RV dealers.
 
If you have a 401k, you could consider taking a loan against it. Since you are paying it back, there is no withdrawal fee and all of the interest goes back into your 401k instead of a bank. You can take up to 50% of your balance out on loan for a maximum of 5 year repayment.

However, you need to really evaluate your finances to make sure you can repay it because if you default on it, they will change your loan to a withdrawal and you will get hit with a massive amount of taxes and fees.
 
cerd said:
If you have a 401k, you could consider taking a loan against it. Since you are paying it back, there is no withdrawal fee and all of the interest goes back into your 401k instead of a bank.
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Problem with that idea is lost opportunity.  Any funds you take out of your account are no longer invested and it will have significant long term impact to your return.  You only want to do this if you are in dire straights, like about to lose your home or have sudden medical expenses.  Never for something like a losing proposition like an RV.

I funded mine initially with a HELOC, not because I didn't have the money but why use my money when someone else's is nearly free.  Just a matter of evaluating your cash flow and assets and making best use of what you have.  If one has to extend themselves just to get into an RV then the first year of operation will probably put you under with the operation, maintenance and repair.  So careful what hole you choose to dig yourself into, there are plenty of them with RV ownership.

Mark B.
Albuquerque, NM
 
Of course its a risky move, but it sounds like OP is having a hard time finding funding for an RV that is likely fairly inexpensive. The loss of gain would likely be minimal since the economy is pretty low right now with so many businesses shut down or at reduced capacity.

It might be wise to consult a financial advisor whom has more insight. I think we all agree that it would be foolish to use essential assets as collateral to fund a recreational object.
 
No one can predict the future, of course, but we just have to make the smartest decision we can when it comes to financing. We've financed 4 different rigs since 2003 with varying terms ranging from 3 to 7 years. We've always had some equity when trading and are comfortable with the monthly payment. Conversely we have friends who fell into the "it's only $X per month" trap and have been upside down on their prior 2 rigs due to 15 year loans...and they are considering upgrading again...for the 3rd time in 4 years!
 
Any funds you take out of your account are no longer invested and it will have significant long term impact to your return.
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Not necessarily.  Some 401K or IRA offer loans that do not reduce or eliminate investment returns, i.e. the account is collateral only. Ultra-low or no-interest loans may be in lieu of account dividends, but a somewhat higher interest rate probably has no impact.  As with any loan, it's important to understand all the terms & conditions and not just grab the first one with a cheap rate.
 
Unless there is some business reason to finance a 15 year old rv,  if you do not have readily available funds to buy it outright consider that there will most certainly need an additional slush fund account to fix or upgrade bits and pieces for that era of an rv..
 
My current RV was purchased from a broker who specializes in foreclosed RVs.  Their lot is always full from people who had circumstances change and could not keep up with payments.  My DW and I made a choice when while we were still in our 40's about carrying no debt (the Dave Ramsey thing).  For us it was one of the best decisions we made.  To this day I am still tempted to purchase a new car or an newer DP on financing - but my DW brings me back to earth and we look carefully at well-cared for used stuff. 

 
thelazyl said:
My current RV was purchased from a broker who specializes in foreclosed RVs.  Their lot is always full from people who had circumstances change and could not keep up with payments.  My DW and I made a choice when while we were still in our 40's about carrying no debt (the Dave Ramsey thing).  For us it was one of the best decisions we made.  To this day I am still tempted to purchase a new car or an newer DP on financing - but my DW brings me back to earth and we look carefully at well-cared for used stuff.
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Name the dealer PLEASE
 
thelazyl said:
My current RV was purchased from a broker who specializes in foreclosed RVs.  Their lot is always full from people who had circumstances change and could not keep up with payments.  My DW and I made a choice when while we were still in our 40's about carrying no debt (the Dave Ramsey thing).  For us it was one of the best decisions we made.  To this day I am still tempted to purchase a new car or an newer DP on financing - but my DW brings me back to earth and we look carefully at well-cared for used stuff.
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Also a DR grad - When the brown stuff hits the rotating airfoils being out of debt is the best thing in the world. I carried way too much debt for way too long. Paying cash for everything is very liberating.
 
Thanks for all the feedback.  The reason I want to finance is that money is cheap right now.  If it fell into the 10-12 year old category, money is as low as 4.25%.  With a home equity loan I'd be at 3.69%.  I'd prefer to put my money in other 'investments' that can earn considerably better returns.  I know RV's are a depreciating asset so buying 'right' is paramount.  Plus, as somebody mentioned, you only live once. 

Although, I'm not sure a HEL is going to work because we just bought this house so the equity is likely not going to fit in the bank's magic ratio.  So..... I think I'm going to start looking at something 2008+ so I can go down the traditional funding route. 

With that said, if I'm looking at a 120-150-ish budget, have any recommendations?  I'm looking at 40-45' with a tag.  I'm currently looking around at Country Coach (very limited with my budget), Tiffin Allegro Bus, Mountain Air, etc.  Admittedly, I had researched the hell out of the Country Coach so I'm less familiar with some of the other quality options that fit better into my budget. 

Thanks again for all the feedback
 
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