# any accountants out there? RV Finanacing



## Lorraine (Apr 24, 2007)

Hi,
This is really beginning RV'ing.  Paying for the RV.  I am scheduled to pick up our new RV when it comes in at the end of the month or thereabouts.  The cost will be about $24,000 with everything, out the door price including taxes, hitches, the whole ball of wax. I ordered lots of upgrades too.

I took 24K out of my IRA so I could pay cash and I was told by a few people (including an RV dealer) that I was being dumb and that I should finance as I can write off the interest on the loan.

I do understand that but if I pay cash then I won't HAVE any interest on the loan.  Believe me, I know if I put 20k into some great  investment vehicle it can make me some interest but I was in a very conservative IRA and wasn't making much in the first place.

Is financing the RV a better way to go? What is  the interest rate these days? I would ask Suze Orman but her show makes me nervous!  LOL

Any advice would be most appreciated.  Lorraine


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## BarneyS (Apr 24, 2007)

RE: any accountants out there? RV Finanacing

Yes, you can write off the interest on the loan for your RV but it is not a simple dollar for dollar tax credit.  It is simply a deductable item that you add to the rest of your deductions.   You will not get back all the dollars you pay in interest on your loan.   I have always been of the opinion that it is better to pay cash rather than pay someone else interest.  That is, of course, if you have enough money to do that.  I assume you are of an age that you do not have to take a penalty to take money out of your IRA.  If you do have to pay a penalty, then I would suggest that it might be better to finance the thing.  I am not a money expert or a tax person so take my advice with a grain of salt, but I am getting up a bit in years and have had some experience in financing things.  I always try to pay cash when I can.  The only exception to that is that I do take a mortgage on my home and invest the money.  Get a tax break, and have some cash to invest wisely instead of having all that money tied up in equity and not being used.  So far, it has worked in our favor for the past 20 or so years. Of course, it helps to have a VERY low interest rate mortgage. 
Barney


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## Lorraine (Apr 24, 2007)

Re: any accountants out there? RV Finanacing

We totally agree Barney, on all of it, right down to owing $$ on a mtg so long as it's a low rate. I believe in paying cash, we have the cash, we don't need to finance and I don't want to pay interest to anyone as we do not, as you said, get that money back dollar for dollar. The dealers all tell us that we are foolish to pay cash and we may as well finance.

I guess if I finance and then drop dead I did beat them....Thanks Barney for the advice.  Yes, I am "OF AN AGE" UGH.....Lorraine


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## TexasClodhopper (Apr 24, 2007)

Re: any accountants out there? RV Finanacing

Be smart with interest rates.

My story is that my Daddy was a farmer and never got anywhere farming using his own money.

I learned from that to use somebody else's money, but do it smartly!


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## MFreeman (Apr 24, 2007)

RE: any accountants out there? RV Finanacing

If your IRA is not making much and you are only looking at the tax wright off you could send the interest money you were sending the bank to a charity or church and get the same wright off.  Just food for thought


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## Kirk (Apr 25, 2007)

Re: any accountants out there? RV Finanacing

One other thing about the interest deduction to think about. If you are like many of us who are retired, you won't have enough deductions in total to go to the long IRS 1040 and so you will be taking a standard deduction. In this case, interest does nothing at all for you. We reached a point where we were no longer qualified for the long form and so paid ours off. Make sure that you will be able to take that deduction!

One more thing in the side of financing the RV is the income tax that you will have to pay when you withdraw the money to pay for the RV. Keep in mind that the money will be considered to be "ordinary income" by the IRS so it will effect your income tax amount, and possibly your rate. If you qualify for the long IRS form and so can deduct the interest paid on the RV loan, that effect when added to the cost of the income tax could make the loan cost less that to pay it off.


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