Auto Loan 4u

Rv Loan – 1994 Winnebago Vectra

January 7th, 2009

Mr. and Mrs. Dalisay from California wrote in to one of our partner loan sites regarding their RV purchase and the excitement that had when buying it, and they told us the details of their RV financing in the process. Below is an account of their financing and the interest rates they are paying over the term of the loan.

Many non-Rvers look at the money it costs to buy a new motor-home and they question the decadence of it all, but those who love getting out of the city and hitting the freeways and byways would sacrifice almost any financial comfort to have that freedom.

Mr. Dalisay wanted to buy a used RV, which was a 1994 Winnebago Vectra that had a purchase price of $34,000, where Mrs. Dalisay really couldn’t bear the thought of living in the remnants of someone else’s old motor-home. Mr. Dalisay wanted a used RV so that he didn’t require financing and the monthly payment that came with it. He was willing to fix up their Winnebago and looked forward to refurnishing it to new.

They did not need an RV loan actually, as they had the cash to buy it outright, there were other things they wanted to use the money for, such a nest egg for a rainy day. As it turned out they did get financing with a small $5000 payment. So now we can do the math on their purchase and subsequent financing.

They spoke with the finance department at the RV Center where they were buying their used motor-home, and told them of their plans to put a $5000 down-payment on their purchase. As it turned out, they put $1000 down as an initial deposit to hold the Winnebago (Vectra) while they made some last minute decisions regarding financing and storage.

So when they sat down with the financial team at the RV Center the math went down like this. $34,000 for the Winnebago at a state tax rate of 7.25% plus a 1% district tax for the area of California they live in (withheld for privacy). This brings a total tax burden of 8.25% which equals a total purchase price of $34,000 + $2,805 in tax = $36,805.

The RV financing department subtracted the $1000 deposit already submitted bring the total to $35,805, and then the Dalisay’s provided an additional $4000 toward a down payment. This brought the total principal of the RV loan to $31,805. Now we can use our Auto Loan 4u calculator (at the top right hand side of the page) to calculate the interest on their RV loan.

Only fill in the numbers in the fields of the RV loan calculator, and not the commas (,) or dollar symbols ($)

• first field we enter the total principal of the RV loan – 31805
• second field we enter the agreed interest rate of the RV loan – 7.4
• third field we enter the number years in the term of their RV loan – 5
• fourth field we enter the days between payment of the RV loan – 30

Once we have all the fields filled we can press the submit query button to get a new page with our totals all calculated. I have provided the result directly below:

Total Amount to be payed on the RV: $37,785.87
Total amount of interest on the RV loan: $5,980.87
Payments: $621.14 per month

Because the overall price of the RV was a low $31,805 and the term is so short they are not spending a huge amount of money on the interest. This could be a very different scenario however; they could be going for a 20 year term, and if they had a bad credit rating they could be paying as much as 12% interest. So just for fun, lets calculate that:

Total Amount to be payed on the RV: $70,127.99
Total amount of interest on the RV loan: $38,322.99
Payments: $288.20 per month

Quite a shocking difference. From $5000 in interest for the full term compared to $38,000 in interest. Ouch. However, notice the smaller payments. This is why banks make so much money friends.

Entry Filed under: Financing