I’ve been working on an RV financing scenario since there is little else I can do regarding an actual purchase right now. I’ve done my homework and know what I want in a “touring van” - model, features, year, mileage, etc…. I just need to figure out the purchase price I can live with.
Note: I loathe debt; we are currently debt-free and have been for years. Because of a genetic predisposition – thanks Dad! – I know I will pay the van off significantly sooner than the 5 years I have plugged into the formula. However, I still need both a price range and a price limit. And the discipline not to exceed that limit.
I could wait another year or two and pay 100% cash but my allergy to debt is also mitigated by the fact that I’ve put all my travel dreams off long enough and life is so very short. And getting shorter. The pain of finishing up my coursework and writing my dissertation is eased more than I would have thought possible by knowing the open road awaits. The van is just a means to an end after all.
OK – to the calculator!
Assumptions: finance at 6% x 60 months with 30K down
50 K = $386/month ($53,160*)
55 K = $483/month ($53,980*)
60 K = $579/month ($64,780*)
* total cost including finance charges
Again, the amount of interest paid is not a big concern as I will pay this off the debt aggressively and early. But the picture isn’t complete without it. Note how each 5K increment results in an extra $100/month.
Bottom line: Even if I wind up paying the upper limit, I know I can get a really good used unit for that price. Great news!