Buying an RV is a big financial investment. Just like buying a new car or your first home, most buyers need to secure financing before they purchase an RV and navigating the financing process can be tricky. Thankfully, it’s our bread-and-butter. We’ve put together a list of finance tips for new RV buyers that answer your most pressing questions, including how much to save for a down payment, how long to finance your RV for and how to roll your negative equity into an RV loan.
But first things first…
New RV Loan Vs. New Car Loan
There are a few things to keep in mind when thinking about RV financing. An RV loan is like a car loan in two ways.
- The purchaser (you) borrows money from a lender and agrees to pay it back plus interest over a certain period.
- RV and car loans are also both considered collateral loans meaning if you stop making payments on the loan, the lender can repossess the vehicle or RV.
While there are similarities between RV loans and car loans, there are some key differences as well.
- Your monthly RV payments will likely be lower on a month-by-month basis.
- The length of an RV loan will likely be longer than a car loan; perhaps as much as ten or fifteen years longer.
- Your suggested down payment will likely be larger for a new RV than a new car.
Now that we have established the main differences between an RV loan and a new car loan, let’s get into some helpful finance tips for new RV buyers!
RV Finance Tip #1: How Much of a Down Payment Do You Need?
Just like when you purchase a new vehicle, having a down payment saved before you purchase an RV can make things much easier when it comes time to secure financing. As a general rule of thumb, the larger your down payment is, the lower your monthly payments will be. As well, large down payments can actually help you qualify for a better interest rate.
We typically recommend saving a down payment between 10% – 20% of the purchase price of the RV. Remember, finance rates for an RV may be higher than your vehicle loan. Keep that in mind when you start saving and budgeting for your monthly payments.
RV Finance Tip #2: How Long Should My RV Loan Be?
Most RV loans range between 5-10 years. But depending on the RV and lender, you can secure a loan for up to 20 years (if you really want to keep your monthly payments low). The length of the loan also depends on several factors including the age of the RV. The question you’re likely asking is, “How long should my RV loan be? The answer depends on your financial situation.
The smaller the loan length, the less money you will pay in interest over time. But you need to make sure your monthly payments fit comfortably within your budget.
Our team of finance experts have experience working with buyers with all types of financial and credit situations. They can help you determine that sweet spot where your loan length is fair, the monthly payments are reasonable and you’re paying as little interest as possible.
RV Finance Tip #3: Can I Roll My Negative Equity into an RV Loan?
Purchasing an RV is a big financial decision. It’s important to understand all the resources at your disposal before you sign on the dotted line. One of those resources is the ability to roll in any negative equity you currently have into your new RV loan.
Negative equity is when the value of something you have previously financed is now worth less than what you still owe to pay it back. For example, this could be a current car loan you have. If you still have $15,000 left to pay on your car and the car itself is only worth $10,000, that means you have $5,000 in negative equity.
At Go RV, we have options for buyers looking to roll their negative equity into an RV loan with a lower interest rate. This could also include trading your vehicle in and using it towards the down payment on your RV.
Every situation is different, and we always recommend sitting down with us to discuss the options at your disposal.
More Finance Tips for New RV Buyers
Feeling confident and informed? Or would you like even more finance tips for new RV buyers? At Go RV, we have you covered.
Start by shopping our entire selection of new and pre-owned RVs online from the comfort of your couch. We even made the finance application process easy. Apply online today and get pre-approved within minutes.
Do you have an RV financing question we didn’t answer here? Schedule an appointment today with our finance department. We have experience working with all types of lenders. At the end of the day, our goal is to get you into the RV of your dreams with a payment plan you can afford at the best interest rate possible.
