Own outright or get a loan?

[Fiveflat]

Here's my situation. Supposedly my Buggy is sold (say supposedly because it's craigslist and everyone knows how those deals sometimes go). So I have enough cash to own a 2000-2002 outright.

Or I can pay off my Toyhauler trailer for the cash I have and get a loan on a newer boat and my payment would be a wash (sort of). I say sort of because a friend said he would pay cash for an older boat for the following reasons.

1.I can deduct the loan on my RV.

2. RV's are easier to sell than Boats, unless you have the pink for the boat.

3. It's hard to sell a boat with a note if you are in a pinch.


Opinions? Suggestions? I'm all ears!

[robert theisen]

i would say your friend has never had to sell a rv he owed money on. rv's depreciate more than inboard boats.that being said,are you worried about job security?you can get a smoking good deal on a 2010 boat now till dec-jan. after that they will be slim pickings. the boat shows will move them fast between now and december.which one do you want more the boat or the rv?if you don't need both sell the rv and use that money as a cushion in savings account. that way if things get tight you have several boat payments there.

[talltigeguy]

What is the interest rate on your toy hauler?

What interest rate do you expect to get on your new boat?

I personally think that it depends on your occupation. If anything was learned in the last 3 years it should be that very few people are immune to the effects of the recession. And some people are in business that is naturally going to boom and bust. If you are in one of those businesses, do the safe thing and buy an older boat outright. Then you don't have to jeopardize future decisions because of that debt on a shiny new boat.

[AdaminMN]

Can you deduct the interest on the RV as a second home?

Compare what you'll pay in interest on the RV for the remaining term of the loan, and do the math and see what you'll pay for interst on the boat for the term of the loan. I'd chose to keep the loan that has the least amount of interest paid out.

[Fiveflat]

I can deduct my interest on my RV, yes. I do need to keep the RV because even with a boat, it's handy especially for the tournaments we go to since we can camp right on the shore. Interest rate is about equal, probably just 0.1-0.2% lower on the RV.
I am about 98% immune to any economy issues we have. But also with that said, my Toyhauler RV is about paid for and it would be very nice to have no payments at all and be able to put a ton of cash in the bank and/or into the boat...

[AdaminMN]

...and be able to put a ton of cash in the bank and/or into the boat...

[Fiveflat]

LOL... so are you saying own or loan?

[Moki]

I say "own". It's always a great feeling when I am out boating that I am not making monthly payments.

[Domsz06]

find a good used tige and own both. Then save money...

[TRD]

Sell everything, RV included and pay cash for toys. Being Debt Free is a good place to be, exspecially in these time w/ the economy the way it is.

[Ewok]

Pay cash for boat, debt free is awesome! Take the potential payments and put it away to pay cash for the next vehicle upgrade. When you save that cash you save more 'cause you are not paying interest on the money you save vs taking a loan.

[rickd3508]

Assuming the payments would be about equal and your not going to have three kids starting college in the next 3-5 years. Then I would pay off the RV and go buy the boat you WANT. You only live once....

But thats just me

[Jason B]

One important factor to note is the timing of your purchase.Right now there are smoking deals on 2000-2005 boats. If you buy now, at recession like prices, when the economy rebounds and prices come back up in a couple/few years, you will be able to get out of hte boat for very little loss. Also, at that point your RV will be paid for. You can then decide to keep your paid for boat, or sell it and apply that $$ with your RV payment $$ and get into a newer boat--whichever you decide fits your situation best.

Right now, you really can't go wrong on a good used boat. Going into the fall/winter the deals are only going to get better! Decide what you want out of the boat, your budget, and then be patient while you look for the right one. Use it for a couple/few years and then reasess your needs and financial situation. That way, worst case, you have an RV that's paid for, a boat that's paid for, and probably some savings left in the bank. That's a pretty damn good "worst case" if you ask me.

[Fiveflat]

yup, You're right on Jason. I've been thinking this over for about 3 weeks and finally asked here last night, mainly because I'm actually in the real position and want to do something.
Now to find the right boat. I found somthing close but it doesn't have Perfect Pass or Auto ballast. Things I can easily add, and while summer is coming to an end it can be a good winter project. Especially if I can get the boat bought right!

[gwhite94]

I am also of the frame of mind to own not loan on the boat. If your RV is almost paid for I would continue to make whatever payments you have left on it.