You are ready to go buy a motorhome, so you go down to the bank and get a wheelbarrow full of money. Sure, we all know that isn’t going to happen. Most people don’t have that kind of money sitting around to just go pay cash for and RV.
If you have bought a home car boat before you know it can be difficult to get financing.
What do you need to know about financing? Let’s take a look to make sure you will get the best deal possible.
Let’s look at some factures on how to get financing for your RV.
Did you know that there is a difference in interest rates from a used RV and a new RV. What are the factors on the financing you will need there are several?
Current Interest Rates
Interest rates will go up and down by what the government fills they need to adjust for inflation. But interest rates for cars and homes are different. Certain times of the years you will be able to get a better interest rate on a car loan. I guess that is when the dealers are trying to move old inventory to make room for the new models. This is a good time to buy a RV also because you will be able to find better rates then.
Credit Score
No, we didn’t say credit score! Yes, your credit score will be a big factor. The higher your credit score is the better rate you receive. A lower credit score mean that you will have a higher interest rate. Don’t get discouraged if you don’t have the best credit score. You can shop around, and you will find someone that will work with you. And If not take some time as you are looking for the perfect RV for you and your family.
Down Payment
Your down payment will also determine what kind of rate you will get. The large down payment will help you to get a better rate. Most financial institutions will see that you have a higher investment into the RV then they know you will have a loss also so they will give you a better rate.
If possible, try to put at least 10% down payment. This will help with a lower down payment and also help you with negotiating on the final price.
What Are the Different Ways to Finance an RV?
There is a couple way you will be able to do your financing. When you are purchasing a new RV, the manufacturer can offer you financing. The dealer will have several bank or credit unions they work with to get financing. Or If you have a good relationship with your bank and want to work with them, they can be an option. Let look closer at each option.
Financing Through the Dealer
Don’t be rushed into getting your financing through the dealer. Sometime the salesman needs to make a sale so they could pressure you into signing a contract and you didn’t get the best deal. I hope you have had some time to see what the reviews are with the dealer before you buy. You can always use google, yelp to look up what everyone is saying how their experience was.
With that said it can be a good choice and a bonus to get your financing through the dealer. They will have several financial institutions they deal with on a daily basis. They will know what kind of financing the bank or credit union will offer you. Keep in mind that the dealer will also try to use the bank that is going to give them a better deal. The dealer doesn’t just make money off the sale they will also get money from the bank for making the deal.
It can be convenient that it will be quicker because there will not be as much the financial institution on the price.
Remember this, the first thing the salesman is going to ask you is what is the payment you are looking for. And this is where they have you because they will use the bank that will fit the payment. The only thing is this might not be the best deal and be a higher rate. You could not be getting the best rate.
Only do your financing through the dealer if you feel they are working with you and are trying to give you a good deal.
Financing Through a Bank
Dealing with the bank has its own Pros and Cons. Like I had talked about before if you have a good relationship with the bank or credit union it can be a good experience. With a relationship built they will know you and your payment history so having them lend you the money can be easy.
Working with the bank you will know all the options and will not have to worry about paying the dealer mark up on their financing.
Disadvantages with dealing with the bank is it can take a few days to get your financing because they may have to consult with other members at the bank to agree on the financing. Another Disadvantage is when they offer their best deal that will be it. So it will be deal or no deal.
How Should You Finance an RV?
Well what I would do myself is do my research. You will need to search out what is the right price is to offer for the RV. Talk with your bank before hand a see what kind of deal they can offer you before going to the dealer. This will help you not getting a the best deal.
Don’t let the salesman pressure you into buying anything before you know this is the exact RV you are looking for. The best thing to do is go home and think about it before you jump in. The are not going to sell the RV overnight.
I hope this will help you on your journey on becoming an RV owner.
Let us know how you did with your purchase or if you have any tips that can help other.