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Motorhomes Weigh Down Some with Debt

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Glenn Hamilton and his wife, Rose, wanted to see America. On their retirement in 2001, they already had a motorhome. In 2004, they traded up for a new one.

It was 32 feet, Class A — a house on wheels. They borrowed $105,000. No money down.

Their purchase didn’t sit idle.

“We’ve been to all the states except Delaware,” Hamilton told the Casa Grande Dispatch.

They planned another five years on the road. But a respiratory illness slowed Hamilton down. They last toured in April. Hamilton, 75, is now on oxygen much of the time.

And his motorhome sits on the lot of Norris RV on Arizona 84 in west Casa Grande, Ariz. Hamilton is selling it on consignment, priced at just under $40,000.

“The payoff is now $56,000,” Hamilton said.

That’s how much Hamilton still owes the lender, after a decade of payments on a 20-year loan. If his motorhome sells, he’ll still owe $16,000, not counting the dealer’s commission.

While it sits on the lot, he continues to make payments.

Like Hamilton, many RV buyers are retired, or near retirement. They plan to spend 15 to 20 years seeing the country.

But it doesn’t always work out, said Matt Herman, co-owner of the family-run Norris RV.

“As people get older, they have health issues … someone who lost a spouse. They get in a bad situation,” Herman said. “You lose half your income.”

Things were worse when the recession hit in 2007-08. Like home buyers, RV purchasers were caught in the bubble. And like Hamilton, they got easy loans, no down payment.

Then the economy soured. People lost jobs. Investments and 401(k) plans tanked. People shed their boats, boat skis and motor homes, Herman said.

Nowadays, lenders are more cautious. They require 10 percent down, in many cases.

But the economics of a motor home purchase still apply.

It’s a not a house. In good times, houses appreciate. A motor home is like a car. As soon as it leaves the dealer’s, it begins to lose value, no matter what the economy. And while houses age, they don’t rack up the miles.

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