Most people don’t go to the dealership with a wheelbarrow full of cash and buy a brand-new RV. Like most large purchases, such as a home or car, you will need to finance your RV. If you’ve ever bought a home, a car, a boat, or anything between, you know what a hassle it can be to secure financing for a big purchase. You also know that making the right choice in financing can save you thousands of dollars and make the purchase more affordable over time.
Let’s look at what you need to know before financing to make sure you get the best deal possible.
What Factors Determine How You Finance an RV?
There are several factors to determine what kind of financing and interest rates you can get for a new or used RV.
Like home and auto loans, RV loans and interest rates are not static. Rates will increase and decrease depending on what the market is doing. RV rates shadow auto loan rates, so if you know auto loans are low, it may be time to pounce on getting an RV loan.
Like most everything in this world, your rates will be dependent on your credit score. The higher your credit score, the lower interest rates you will receive. A low credit score doesn’t mean you can’t find a good deal. Shop around to find someone who can work with your credit rating and get you the lowest rates possible.
Depending on how much cash you offer upfront, you can get a better APR, terms of repayment, and more with a down payment.
Ideally, you’d want to put up to 10 percent of the total cost of the RV down if possible. This not only helps you get a head start on what you owe but also will cut down monthly payments and gives you leverage when negotiating for overall financing.
What Are the Different Ways to Finance an RV?
You can finance with the dealership, or you can finance with a third party such as your bank.
Let’s look at these different financing options.
Financing an RV Through a Dealer
Before you decide to finance through your dealer and buy your RV, it is important to do your research. Check their reviews to see if any customers have discussed financing and their interest rates. If it is possible, contact other customers to see if they are happy with the deal they got.
There are some bonuses with choosing to finance through the dealer. The process is usually fast and convenient because you don’t need to go back and forth between the lending institution and the dealer. Some dealers can offer very low financing rates through promotions and sales.
There are some downsides to financing through the dealer as well. Often rates won’t be as competitive, and you won’t have as much APR and payment options. The salesperson might use high-pressure sales tactics to get you to sign before you’ve shopped around.
Only finance through the dealer if you are confident they will work with you to find the best deal possible.
Financing an RV Through a Bank
The bank also comes with its pros and cons. Working with the same institution or lender you have worked with before can give you confidence that they will work with you to find a great deal and could give you leniency should you miss a payment.
A big advantage of your bank is that there won’t be an intermediary like at the dealership. You will get direct to consumer pricing without the dealer markup.
There are some disadvantages of working with the bank. Usually, they present you with the best possible deal, so there isn’t any negotiating. So, it’s one deal or no deal. Also, financing through the bank may take a few days where you can walk in and out of a dealership in one day.
How Should You Finance an RV?
My suggestion to you to is to see what offers the dealership and your bank will give you, then go with the better financing deal. When an RV dealership realizes you aren’t going to finance through them and you’re looking at other offers, they get more generous.
One of the best things you can do is to get pre-approved through your bank and take this paperwork with you to the dealership.
Often a dealer would like you to finance them so that you can use this as bargaining leverage. The most important thing is to leave yourself with several options, so you can cherry pick the best deal and buy the RV of your dreams.