Loans and Insurance

[soldiermedic]

I kow that intrest from loans for RVs should be tax deductable as long as you camp for enough nights a year in it. Since I am buying this from a private party, I was wondering if anyone has had luck with an independant loan company for RV purchases. My bank told me it could take about a month for a Home Equity Loan, and I don't have that much time.

Who are some common lenders that dealers use?

Also...can anyone recommend an insurance company that will not completely consume my finances? I plan to just use this coach for spring-Fall camping, and will rarely travel outside of 5 hours.

Thanks,

Steve

[CanoeStream]

Hi Steve -- I don't believe that number of nights spent inside is necessary for deductibility. Like a sailboat, if it has a kitchen & bathroom it can count as a 2nd home, thus mortgage (or simple loan) interest is deductible. I'm not an accountant but our tax person accepted this without further details. You can get this deductibility without having to go through a home equity loan and incur those risks. We did a secured consumer loan at a credit union where we do business (secured = they get to sell it if I didn't make the payments; they are declared as lien holder on the title).

Are you eligible for USAA insurance? (ie, military officer or enlisted?) www.usaa.com. Compare USAA to something like Progressive. Search the forums on both company names -- you'll find many threads. I don't know that anybody has rates for infrequent or short distance use; it remains insured even when sitting still. Your car/truck insurance covers the liability aspect. New (expensive) or vintage can be tough to replace unless insured -- so insure what you can't afford to lose. I didn't carry much on my '74 Argosy -- a form of self insurance I guess. The industry doesn't know how to deal with vintage values, so one can set up a 'declared value' policy -- search on that also. Our state doesn't seem to have a mandated insurance level for travel trailers.

[soldiermedic]

I know many people with USAA and may have to look at that mylself. As for the loan, I am looking at a 60 month personal loan at (159.00) a month.

Dunno if it is deductable or not.

Steve

[CanoeStream]

The interest will most certainly be deductible if you aren't using the standard deduction.

A minor oversight -- your loan will probably require insurance at least equal to the amount borrowed.

[ScottW]

Check out USAA. I'm with them and the price is right. The loan intererst is tax deductible, just like regular mortgage.

[2airishuman]

hi steve
congrats on the new vintage unit...

very cool!

given the specific purchase you will want an 'agreed value' policy.

the rate will vary based on the dollar amt established

by you and accepted by the insurance underwriter.

and absolutely read the verbage on agreed value.

many agents will declare that's what they sell...

and all is well, till settlement time.

progressive DOES have a well worded agreed value policy.

imo the policy needs to include comp AND collision. don't trust your tv insurance for all liability needs.

also consider 2-3 of the vintage/classic auto insurers....

they specialize in this variation of insurance (agreed value) and rates are reasonable.

while most insurance purchases can be done online these days,

it might be worth the time to meet with an independent agent who has access to classic car insurance.

some classic car collision-insurance can even be activated 'during usage'...

the comprehensive side doesn't work that way..

frequency of use primarily matters with normal rv insurance policies for full timin' or more than 180 days use/year.

'time/usage' to qualifiy for interest deduction is 2 weeks/year IF not your primary residence.

how about the local credit bureau? or your regular bank but NOT as a home equity loan...

do you really want to leverage YOUR HOUSE for an old rv?

u are in missouri? i financed with commerce bank for a great rate on an rv load.

quick and easy.

rates of course vary by credit score AND financing old things is trickier...

virtually every lender with good rates WILL want more documentation for a vintage purchase IF even considering your loan.

all this will take more time than a cash purchase, way less time than a full monty redo...

cheers
2air'

and aren't you glad now to have a unit READY for camping!

[soldiermedic]

My plan was to pay $10,000 cash, and finance the other $7500 that I owe.

My bank has a loan, but I am at work, and cannot look up tons of vendors till I get home tonight.

Will check out USAA, and will contact Commerce Bank...I know they are in the area. THing is that I know banks don't like to finance RVs unless they are going to lend out a bunch of money and make alot of money in return.

Also, I do agree on the agreed value insurance and will insure it for what I pay.

Steve

[soldiermedic]

USAA offers agreed value on insurance, and I will go with them. However, I must say it has been extremely difficult finding a lender for a vintage trailer. I have spoken with many, and they say that NADA doesn't go back that far, and they won't risk it. I tried explaining to them the value of the trailer was appraised over $20,000, but they wouldn't listen.

I am getting close to my deadline. Anyone have good experience getting a loan on a vintage unit?

Steve

[pmclemore]

Steve,

Are you sure you are getting 17,500 worth of value for this trailer? Can you step back, take a deep breath and truly justify it?

Will your trailblazer pull it? I assume that if you are buying an older trailer for that much money, it must be a big one?

As far as interest, it will most likely be deductible (if you itemize). But this should not figure into your calculations, as it is a minimal benefit when compared to other factors in the deal.

Pat

[soldiermedic]

This trailer weight between 1500 and 1800 lbs. I can pull 4800 with the trailblazer no problems. For the price of $17,500. The restoration/remodeling of this trailer priced out just at $30,000. David Winick was the one who got the frame/floor repairs, did wiring and plumbing, insulated, and helped apply leather to the walls. The remainding work was done by the owner at his studio. I have the price sheet all the way down to polishing at P&S trailers for $5400. It is worth every bit of $17,500 and worth more to me than that. My bank DID offer me a personal loan instead at 9.95%.

Don't know what route to take though. Will look into this weekend.

Steve

[2airishuman]

Originally Posted by soldiermedic

My bank DID offer me a personal loan instead at 9.95%....Steve

hi steve

given you only planned to finance 7500$ or approx 1/2 the purchase price, this is a reasonable loan.

the int. rate may seem high, but keep the term short and it isn't a big difference.

about 3-500$ for a 5 year term. with payments at under 200.00 monthly.

cheers
2air'

[soldiermedic]

2air,

$7500 at 9.95% x 60 months is $159.00 per month per the bank.

Steve

[Condoluminum]

Are you member of qualifying group to join federal chartered Credit Union? Does MO have "State chartered" credit unions that have "community" charters where anyone in a geographic area can join, as CA does?

Most of ones here are much more "relaxed" about loan approvals and speed than banks, and rates often are better, since CU's are non-profit and member-owned...

Daughter bought $30K+ car while in LA, 350 miles from nearest branch, and they approved loan over phone, increased loan amount when car price increased, and mailed check same day in anticipation of receiving paperwork after purchase contract signed...

[RedSHED]

Did you try USAA for the loan?

[soldiermedic]

I tried USAA for the loan, but they will not take a chance on a vintage trailer. My bank won't even go past 1993 on a trailer loan.

Steve

[mwinter]

I have always used USAA insurance. They have the best rates and great service. I have a few savings accounts with them as well, and I plan to ask them about financing an Airstream. My father was in the military, so that makes me eligible to be a member.

M.W.

[soldiermedic]

They will finance a NEW unit, but not a restored vintage trailer.

Steve

[mwinter]

Originally Posted by soldiermedic

They will finance a NEW unit, but not a restored vintage trailer.

Steve

Yeah, I saw that. New being after 1993?

[nohillgrish]

Steve,
This is a situation where your relationship with your bank (banker) is more important that value of the trailer. To those of us who appreciate and have some understanding of value on our respective unit, a bank's knowledge and policies often extends only to the limits of their value source, ie. NADA, etc. Whether it's an Airstream, vintage "this or that" or coon dog, a bank doesn't want these items on their parking lot in event of forclosure and they want some knowledge what something might bring in quick liquidation. IMHO a personal loan is your best alternative. If you've been given a quote for such a product at 9.25%, that's 1.0% over current prime. Suggest to your banker that you would like to go a year at a time (normal term for unsecured credit), with monthly payments based on 5 year amortization. You then can accelerate payments as cash flow permits (tax return, re-up bonus, inheritence, etc. and total interest won't be that much in the big scheme of things. Note would then just be rewritten annually with possibly some adjustment in interest rate (up or down). Then, when the next "outside their box" thing comes up you've already established your credit worthiness. I personally would not be afraid to use the home equity option if you can discipline yourself to repay aggressively as possible. There are a couple of caveat's, but more than likely that interest would be deductable whereas your unsecured note would not. My philosopy is that you have worked hard to build the equity in your home, so why not now let that equity work for you. The key here is not to eat up equity in your home with frivolous things, and repay aggresively.

[2airishuman]

Originally Posted by soldiermedic

...$7500 at 9.95% x 60 months is $159.00 per month per the bank...Steve

yea steve that's correct...

the point being that even IF you could get 6.0% (a very very good rate) for 5 years on that sum...

the payments would only be 15-17$ less per month.

that would amount to 900$ less in interest over 5 years, but 6.0% isn't realistic for your loan...

a home equity loan might be 7-7.50% and perhaps lower IF you've got a top tier fica score/credit history.

a 7.5% rate would mean payments at 150.00 monthly, which is 540$ less interest....

so the point being, the rate offered you on an older unit is reasonable.

i'm not a fan of risking the primary residence (your house) as collateral for cars, rvs or like items...

college expenses maybe, or life saving medical care sure, but not toys that can vanish...

others do use home equity loans for whatever...

have fun with the new vintage beauty!

cheers
2air'

and the interest on your loan is deductible IF used to pay for the rv (galley, bath and bedroom) providing you itemize deductions..