Guaranty RV has been here in Junction City selling cars, pickups and RVs for more than fifty years, so we’ve learned a lot about RV financing and helping our customers get behind the wheel of their perfect RV without blowing their budget. They’ve told us over the years that the financing aspect of purchasing an RV is sometimes the scariest part. That’s why we’ve devoted this blog to the subject of RV financing: to take some of the mystery and stress out of the process, and to help you get the best deal possible. Last week we spent some time talking about what you can do before you go loan shopping to help you get the best interest rates and terms. Even small differences in interest rate can save you hundreds of dollars over the life of your RV loan, so it’s in your best interest to get your financial ducks in a row before you apply for financing. Once you’re happy with your credit score and down payment, it’s time to go get the best RV loan! The key to finding the loan that serves you is to do some research and compare your options.
Bank Loans vs. Credit Union Loans vs. Dealership Loans: Which is Best?
Usually an RV loan is a simple interest rate loan, but that doesn’t mean that all RV loans are alike. Many banks, credit unions and other independent lenders offer RV financing, and you also have the option to secure financing through your RV dealership. There’s no simple answer to which lending institution is going to serve you best, but there are some guidelines that can help you decide which direction to go. And remember, all of these options mean you have some ability to negotiate for what you want, particularly in terms of fees and the length of the loan. As we mentioned last week, a typical RV loan usually comes with a term of 10 to 15 years. However, if you’re purchasing a more expensive RV, you may qualify for a term up to 20 years. Lending institutions are often willing to do this because RV owners as a group are the kind of people who can be trusted to make their payments on time over the life of the loan.
Bank Loans—If you have a relationship with a bank that you like, start by talking to a loan officer there. Some banks aren’t able to be as flexible with their RV loan terms and rates because they must answer to stockholders who insist on turning a profit. But there are banks that are an exception to this rule and work closely with their account holders. Also, some banks have occasional deals on loans for leisure vehicles like RVs. Be sure to read the fine print on these deals, because they are often only for people with the highest credit scores and/or for people who can make a large down payment, but if you qualify, this may be your best bet for getting the interest rate and terms you want. Just remember that banks are not your only or necessarily the best option.
Credit Unions—According to US News, a credit union can sometimes provide their members with better rates and better service on vehicle loans, including RV loans, than a bank is able to. Because credit unions are nonprofit institutions, they aren’t beholden to stockholders, and instead roll profits back into savings and benefits for their members. Because of this, the best credit unions can often offer extremely competitive interest rates, better terms, and low or no fees. They’re also more able to work with borrowers who have lower credit scores or a nontraditional credit history. Becoming a credit union member is easier than people think; you can often join based on your employer or family members, where you live, or what church, labor union, school, or homeowners association you’re part of. So even if you’re not currently a credit union member, don’t hesitate to explore your RV financing options at your local credit unions to see if becoming a member would be your best bet. Usually you can find their rates and terms online. Otherwise, stop in a branch and chat with a loan officer. To find a credit union near you and to find out if you qualify to become a member, visit MyCreditUnion.gov.
RV Dealerships—As with banks and credit unions, RV dealers are not all alike; some are better than others. The good ones, however, may be the place to secure the best RV financing. For instance, at Guaranty RV, our finance experts work hard for our customers in order to secure the most competitive RV loan rates. We do this by having a strong relationship with the nation’s top lenders and also with local banks and credit unions. We have spent more than fifty years building our reputation as a dependable, trustworthy dealership that lending institutions want to work with, and we pass that on to our customers. Because we have established this relationship, we can often find the best rates and terms. And the added benefit is that we will contact the lenders for you, and compare the options to find the best deal, keeping in mind your budget and all the other costs that go into RV ownership. However—and we say this with sadness—not all RV dealerships are trustworthy. Some add on dealer fees and higher interest rates as part of their in-house financing in order to increase their profits. So make sure you read the fine print and ask a lot of questions before you assume the “great deal” they’re offering you is the best one you can find.
By taking a little time to research your loan options ahead of time—often this just requires sitting down at your computer with a cup of coffee and exploring lender websites—you will be better prepared to get the best loan for your new RV.
Loans for Pre-Owned RVs
Should you purchase new or used? Obviously, buying a pre-owned RV can save you thousands of dollars in purchase price. However, it’s important to keep in mind that the age and mileage of the pre-owned RV can also affect your loan rate when it comes to RV financing, and that can cost you more in the long run. The annual percentage rate (APR) is generally higher on older vehicles, so you could be paying significantly more in interest even if you paid less for the RV itself. Over the life of the loan, this could mean you actually paid as much for a used RV as you would have for a new one. So make sure you figure out how much you will actually be paying for the RV, including interest, when you reach the end of your loan term. Speak with your loan officer or use an online RV loan calculator if you’d like some help with that.
A Strategy for First Time RV Ownership & Staying in Your Budget
We’ve all been tempted by a sweet RV that we could just imagine ourselves in at the campground or on that epic road trip we’ve been dreaming about. But dreams don’t always correspond with reality, and although we might be able to just barely afford that dreamy RV if we cut some other costs, that doesn’t necessarily add up to stress-free vacations. In fact, it can take all the fun out of owning an RV. Knowing what you can actually afford before you look at RVs helps guard against this. Consider taking a slower approach to RV ownership instead of jumping into too much debt. By purchasing an RV that is in your current budget, and keeping it in excellent shape while you enjoy it and pay off your RV loan, you can then use it as a trade in down the road. This will allow you to improve your credit score and save for your dream RV, while still being able to enjoy the camping and road trips you’re craving.
If you have any questions about RV financing, please contact us. We know it can be stressful and we’re here to help.
