Can you finance an older RV?

By Elaine Knight
Page last updated: 02/05/2021 | Next review date: 02/05/2023
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Elaine Knight
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In this blog post, we will answer the following question: Can you finance an older RV? We will discuss what are the various methods of financing an RV, the factors that you must consider and what are some thoughts to consider before financing a vehicle. 

Can you finance an older RV?

It is not that easy to finance an RV older than 15 years. If this is your case, you will have to either get a personal loan or a loan from a credit union. The score credit for an RV loan should be at least 700, and there are few lenders who finance an older RV or someone with a low credit score.

The advantages of financing your RV are indisputable:

  • Low, fixed interest rates help you save money
  • Flexible terms so you can find a loan that is right for you
  • You can finance an RV for up to 10 years

Most people don’t go to the dealership with a wheelbarrow full of cash and buy a new RV. Like most large purchases you will need to finance your RV. If you’ve ever bought a house, a car, a boat, or anything in between, you know what a hassle it can be to secure financing for a large 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 take a look at what you need to know before financing to make sure you get the best deal possible.

What factors determine the finance of an RV?

There are several factors in determining what type of financing and interest rates can be obtained from a new or used RV.

  1. Current rates: Like home and auto loans, RV loans and interest rates are not static. Rates will go up and down depending on what the market is doing. RV Rates Shade Auto Loan Rates, so if you know auto loans are low, it may be time to jump in on getting an RV loan.
  1. Credit score: Like almost everything in this world, your fees will depend on your credit score. The higher your credit score, the lower interest rates you will receive. A low credit score does not mean that you cannot find a good deal. Shop around to find someone who can work on your credit score and get you the lowest rates possible.
  1. Initial payment: Depending on the amount of money you offer upfront, you can get a better APR, payment terms, and more with a down payment. Ideally, you want to put up to 10 per cent of the total cost of the RV down if possible. 

This not only helps you get a head start on what you owe, but it will also lower your monthly payments and give you a head start on negotiating full financing.

What are the various ways to finance an RV?

An RV can be financed with the dealer, or it can be financed with a third party, such as your bank. Let’s look at these different financing options.

  1. Financing an RV through a dealer

Before deciding to finance through your dealer and buy your RV, it is important to do your research. Check their comments to see if clients have discussed financing and their interest rates. If possible, contact other clients to see if they are happy with the treatment they received.

There are some bonuses with the choice to finance through the dealer. The process is usually quick and convenient since it is not necessary to go back and forth between the credit institution and the bank. Some merchants may offer very low financing rates through promotions and sales.

There are some downsides to dealer financing as well. Oftentimes, the rates will not be as competitive, and you will not have as many payment options and APRs. The seller may use high-pressure sales tactics to get you to sign up before they have compared prices.

Only finance through the dealer if you are sure they will work with you to find the best deal possible.

  1. Financing an RV through a bank

The bank also comes with its pros and cons. Working with the same institution or lender that you have worked with before can give you the confidence that they will work with you to find a large amount and that you could give leniency in the event that a payment is missed. 

A great advantage of your bank is that there will be no intermediary, as in the dealership. You get straight to consumer pricing without the trademark dealer.

There are some downsides to working with the bank. They usually give you the best deal possible, so there is no negotiation. Therefore, it is one to try or not to try. Also, financing through the bank can take a few days where you can get in and out of a dealership in one day.

How should you finance an RV?

My suggestion for that is to see what the dealership offers and your bank will give you, and then go with the best financing deal. When an RV dealer realizes that they are not going to finance through them and that they are looking at other offers, they get more generous.

One of the best things you can do is get pre-approved through your bank and take this paperwork with you to the dealership. Oftentimes, a dealer would like you to finance them so that you can use this as your bargaining power. 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.

Before buying a vehicle or leasing

  • Consider federal and state laws: Review the federal and state laws that affect the vehicle financing and leasing process. These laws provide you with important information that can help you negotiate a better deal or better understand the process. They also give you certain rights.
  • Determine how much you can afford: Before financing or leasing a vehicle, analyze your financial situation to make sure you have enough income to cover your monthly expenses. 

Then, if you want to finance the purchase of a vehicle, know that the amount you will pay in total is going to depend on several factors, including the price you negotiate for the vehicle, the annual percentage rate or APR, which can also be negotiable, and the duration of the credit agreement.

Decide to finance or lease a vehicle when you know you are ready to take on a new obligation. Review the overall cost of the purchase or lease.

The bottom line

When negotiating financing or leasing, consider the amount of the monthly payment or instalment. If you want, you can use this monthly spending plan worksheet as a guide.

The only appropriate time to consider taking on additional debt is when you spend less than you earn. The extra burden of debt you decide to take on shouldn’t affect how much you set out to save for emergencies or other overriding life goals or priorities. 

By saving money for a down payment or handing over a vehicle as part of the payment, you can reduce the amount of money you need to finance and lower your financing costs. In some cases, the value of your vehicle delivered as part of the payment can be used to cover the down payment on your new vehicle.

If you have more questions or comments about the content, please let us know.

FAQ on Can you finance an older RV?

How to finance the purchase of a used car?

To finance the purchase of a used car, follow these tips:

  • You must have an initial of money; that is, have the hitch.
  • Have your valid identification.
  • Your age must be between 21 to 69 years old.
  • Proof of income and addresses updated.
  • Your employment must be no less than 1 year.

How can I buy a used car on credit?

To buy a used car on credit you must:

  • Analyze your budget.
  • Check your ability to pay.
  • Have savings to pay the maximum down payment possible. 
  • Create credit history. 
  • Check your credit bureau. 
  • Choose the appropriate term for your needs.

How much is the credit score to buy a car?

Generally, a good credit score to buy a car is from 690 to 719 points, and a bad one from 630 and below. In a slightly different system, an excellent credit rating is 661 to 780 points and a high-risk rating is 501 to 600.

References

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