20 Year Loan At Age 60

[DOWDYL350]

At 60 years of age, we're thinking of trading our 2006 32' Southwind Fleetwood motorhome for a diesel pusher. Is it insane to even consider this at our age? How do others handle this? I'm still working but plan on retiring in another 5 years.

[hermanmullins]

dowdyl, Welcome to the Forum. I say go for it. If any thing, it will give you a very good reason to keep on keeping on. We got an 18 year note on our coach in 2007 and I plan on paying for it, or maybe trading up to something my kids will have to worry about in 20 years or I hope more.

One of the new sayings is "Live, Love, Laugh", I think we should add to that, "Live, Love, Laugh, all from your RV". :lol:

[DOWDYL350]

Thank you so much for your response! Very encouraging. I had the same anxiety when we bought our home 40 years ago.

[Guest BillAdams]

Absolutely! Obviously, the interest on a loan of that length is going to make the coach difficult to trade in the future but if you plan to keep it (or put have a pretty big down payment) who the heck cares. You can let your heirs pay it off or add a small life insurance policy (don't take a dealer offered credit life policy) to help should something happen to you unexpectedly.

[hermanmullins]

Good advice, I hadn't thought of a term life policy on the balance. I think I will look into it. Bobbie could benifit if I go first.

[chucknewman]

dowdyl,

I have to agree with the other posts here. You have no guarantee that you will be around in five years from today. At our age we have to enjoy life any way we can. Whether you're still working or not.

A recommendation: Don't buy new, particularly in this economic climate. Purchasing six coaches over 30 years this was our first pre-owned unit. And it has given us almost zero problems compared to the new units we've purchased over the years.

We paid only 32% of the original MSRP for this coach which was ten years old at the time, but had only 35K miles on it and was kept inside a barn. That may sound like a lucky purchase. And maybe it was. But it didn't come easy -- we spent four months and traveled 5 states looking for a very well maintained coach. They do exist; we sold five of them.

Our preference was to find a well cared for coach to make it easier for us to keep our "no debt" status following retirement.

From our experience during that looking jaunt, we found you really don't want to invest in a coach that had 3 to 5 owners before you saw it. Think of the word lemon. And we saw many at great prices.

[hermanmullins]

Another thought. If they will loan you money for 20 years and a depreciating asset, then they feel you will live long enough to pay for it.

So I say "GO FOR IT".

[DOWDYL350]

We're a little scared of buying used (never know what you're going to get and it's a big commitment), however, would consider it if one owner, low mileage, good price, and getting an extended warrenty. We're planning a trip to Yellowstone this fall and not sure if the park can accommodate a big rig or better to stay at a campground outside of the park. Also, during the fall would you recommend reservations along the way or do you think we'll be fine because we're travelling mid-September to early October.

[Guest BillAdams]

It's quite likely that you will have as many (or more) issues with a brand new coach than you would with a used unit. Production quality is low as the focus is volume in most cases. There are lots of great deals to be had and used units should not be completed dismissed.

The only park in Yellowstone with hookups is the Flying Bridge. I would recommend reservations. The park is quite tight and while they did fit us in with a 40' coach, I don't believe they have many sites that would accommodate large rigs so be sure to ensure you will fit when you make reservations.

There are several dry camping areas in Yellowstone as well and I don't believe that reservations are available but should also not be necessary. They are generally only full during the dead of Summer.

[Koliver]

If, at age 60, you can`t afford to purchase your toys outright, you shouldn`t. Toys depreciate in a normal economy. In a recession, the value of anything recreational drops faster than anything else. At best, if you want it badly enough and can pay it off before you retire, ok to borrow, but only if that borrowing will not impact your ability to continue a decent lifestyle on the income you have left.

[hermanmullins]

Buying new= Fast depreciation, 20 to 30% first year. Many problems, they may be covered by warrenty but you still have the problems and most are on the road.

bad. Every thing is new. Good

Buying preowned= The fast dep. has already take place. Warrenty problems have already been taken care of. In this economy there are some real bargins out

there.

Low milage is good, unless coach was used by snow birds. Low milage but realy lived in.

These are just my thoughts. Some people think buying new means they are not buying someone elses problems. I think buying preowned means someone else

took care of the problems.

Every body has to go with what they feel is right for them.

So follow you own gut and go for it.

[Guest Wayne77590]

You can't take it with you - money that is - when you go.

So, my children named our MH the "SKI Mobile." (Spending Kids Inheritence)

[DOWDYL350]

Everybody has been very helpful. This forum has been a very useful tool. Thanks to all!!

[five]

Buying new= Fast depreciation, 20 to 30% first year.

With the market the way it is, you don't always take a big hit if you buy new. We have friends that recently got over $100k off a new coach priced at over $330k. So you can look at this as the first year depreciation hit...and you have a new rig. FWIW, they paid cash also, don't know if that made a difference.

[Leewhiz]

One other thing to think about is that if you convert your property into a Living Trust, after you buy the coach, then the Trust will own your property and if you do not have enough money to fund the coach for the final payment if you pass no one else needs to cover the cost. Then your family will not have to worry about it either. A Living Trust can be a wonderful thing to 1) avoid having family members pay inheritance taxes; and 2) easily pass property on to your family members.

Even though I am not a lawyer I strongly recommend any retiree check into a Living Trust with a lawyer that has knowledge on it specifically.

[danddferr]

I'm with Herman on this one! First you can't take it with you, I've never seen a hearse with a luggage rack! Second buying slightly used RV or Car can be a real bargain if your careful. Best wishes... Last words... GO FOR IT!!!!!!!! You only live once!

Dan

[DieselGuy]

Hello we have been Rving for over 40 years as well. Started with a tent, tent trailer, used 24' 5th wheel, then a new 30' 5th wheel, and another new 35' 5th wheel.

We just traded it in on a 2005 Beaver Patriot Thunder. Only thing-- I wanted to do it a year ago, wife wanted to pay cash. So I cashed in my stocks (that I was saving for retirement) and did the dirty-- paid cash. We pick it up when our Canadian winter releases us from her grip, and like one of you said if there is anything left in the bank when I depart I did something wrong.

[charles10]

My thoughts on this relate to our purchase. After many discussions about financing we decided what we could pay cash for, we were not sure there would be funds to wander the USA if we were making payments. Picked out coach we wanted and then watched Internet for around six months. While in Nebraska found a coach in Tulsa that fit our specs,ended up buying it on our way home.

Used but with few problems, 2 owners over 8 years. Purchased by consignment from a dealer that had serviced it.

The reason for that story is one of the coaches we considered and made an offer to buy is still for sale. The loan is so very much more than value of home, even owner was willing to pay 10 grand to sell it. I really feel for those people, unit is depreciating in their driveway.

I would hate to see someone get into that position.

p.s. 2 years later that coach is still for sale.

[theoldman]

Don't think so. Most of the time if you pay cash the dealer will make less because the banks pay them to write the deal up and for getting them the loan-- called dealer prep.

I sold cars for a year and sometimes make real good money of the DP and the higher the rate they get you the more they make!

[TownCreek]

Makes absolute sense. Deals are out there. I just purchased new MH and financed for 20 yrs under 4%.

[desertdeals69]

I have always maintained that "toys" should be purchased with cash. All my boats and motorhomes in the last 38 years have been bought with cash. Sometimes I had to wait until I had enough money.

[bizsmith@yahoo.com]

Having sat in a waiting room of a large RV service facility, my comment would be that buying new can be more of a headache than buying used. The new owners were more likely to be pulling hair over warranty problems. A well cared for used coach will have the bugs worked out.

"They don't build 'em like they used to."

[tzimmermn]

No correct answer. We have owned new and used. I am 60 also. I would recommend going into retirement as debt free if possible. The extra money that would be going to a mortgage payment can be banked and used to enjoy life. We purchased a used diesel 3 years ago and have been enjoying ever since. We purchased at 50% of retail. It was 2 years old and had 11,000 miles on it. Interior look brand new and exterior was well maintained. We purchased from a couple in bankruptcy. We looked for a year before finding our coach. Looked at a lot of lemons before finding lemonade. Looking forward to retirement in 2 years.

[RVerOnTheMove]

I have always maintained that "toys" should be purchased with cash. All my boats and motorhomes in the last 38 years have been bought with cash. Sometimes I had to wait until I had enough money.

Due to the low cost of borrowing now available from many sources it can actually cost less to borrow the money compared to the amount of money lost in interest/gains if these funds are in a working savings plan. Additionally, the money in the bank is accessible at any time while any equity in your RV is frozen.

It's just not simply a "one size fits all" situation.

[MichiganView]

How to do it... Hhmmmmm

Lots of good suggestions so far - I like Living Trust consideration.

I think most importantly is our ability to pay, but not necessarily that you do pay for it now. For example - we are 67, bought our first coach a year ago and had ability to pay cash, but it wasn't the smart thing to do. Rather than liquidating stocks or other investments earning tax deferred interest - we put 20% down (from previous RV) - borrowed balance at a negotiated 4.25%. We knew we could pay it off at any time, but since life can present everyone with unexpected surprises, we prefer to borrow with no pre-payment penalty and use that as a 'free' insurance policy. We make monthly payments plus additional money toward principle only from current income. In less than a year, coach will be more than half paid off. Coach interest is deductable as 'second home'. All investments are still intact with earned interest reinvested and averaging, YTD 10.5%. Even if we mentally subtract the small amount we paid in loan interest @ 4.25% (10.5% - 4.25% = 6.25%) we still have all investment principle plus a realized 6.25% interest! Buy making use of the loan rather than having paid cash, which would have permenantly reduced our investment principle a significant amount and we would have lost 10.5% tax deferred interest! In the meantme - if for some reason it became impossible to make loan payments - with our advance payments on principle, our next 'scheduled' loan payment is not until June of 2016, hence - free insurance.

Now, new coach vs used coach? For us, we explored the new cost vs resale cost of various years in the model we wanted. It was no contest - we negotiated a new coach discount of 25% off list price, got lower loan interest on a new purchase and had full warranty on coach, chassis and drive train. Since we purchased a WGO View on the Mercedes-Benz Sprinter chassis with the new V6 turbo-diesel (17 MPG) it came with 12K/36K and 100K mile warranties. Because of the extremely high fuel mileage and classy coach it maintains high resale value. We are very happy with our purchase! This is how we are 'doing it' hope this info helps make some decisions a bit easier? Please don't get the impression that ours is the only way, it's just that we are not millionaires so we choose to conserve our principle - hopefully, so we can travel for many years to come! Another part of this whole equation is no home mortgage, no car payment and no CC debt.

My grandpa always taught that I could "work hard or work smart - it's my choice". I have used his advice in many aspects of my life - including finances ;-) God is Good!