Many say that buying an RV is the second-biggest purchase anyone can undertake after purchasing a home. Indeed, the decision to buy an RV shouldn’t be made lightly, as many common mistakes could prove disastrous to a first-time buyer.
As always, learning as much as you can about the entire process will give you an upper hand and allow you to navigate the RV financing landscape quite easily. Here are a few things to keep in mind when planning to finance an RV.
1. Set a budget
There’s more to an RV than buying the vehicle. Apart from the money used in paying for the camper itself or placing a down payment on the RV loan, there are additional expenses to consider. You should also consider the cost of registration, insurance, and overall maintenance.
When setting a budget, be sure to factor in all these expenses. This way, you can be sure that all your bases are covered.
2. Your credit score matters
To finance an RV, you will need to approach lenders. One thing lenders look out for is the credit score and monthly income. If you have a good credit score, you have a better chance of getting your loan request approved. Good credit also qualifies you for the best interest rate.
3. You can save money by buying a used RV
It is always a good idea to consider all options. If you’re working with a limited budget, a pre-owned vehicle might just be the best option for you. Yes, pre-owned RVs come with reduced costs.
Yet, you should verify all details about the previous owner and scrutinize the vehicle’s maintenance history or any significant faults.
4. Compare different lenders
One of the biggest mistakes beginners makes is accepting the terms from the first lender they meet with. It is always a good idea to consider all your options and compare rates from different lenders.
If you’d be more comfortable getting a loan from a financial institution, be ready to use your RV as collateral. However, online lenders offer more flexible terms.
5. Ask for hidden costs
Many dealers put up low ticket prices, and then you’ve finalized all terms of your loan, you’d be surprised by the hike in cost. This is because there are often additional costs that are kept hidden to lull the buyer into a false sense of comfort.
To avoid signing up for me than your budget can take, ask for any hidden costs before going far in your negotiations.
6. Put down a bigger down payment
An excellent approach to RV financing is reducing your loan amount. You can do this by putting down a big down payment. The larger your down payment, the easier it will be to negotiate lower terms and rates. It’s best to take some time to save as much money as you can.
7. Do not pay cash
Just because you can afford to pay cash for your RV does not mean it is a wise idea. An RV is a depreciating asset. It is more financially sound to purchase the vehicle with the help of financing.