Financing A New Or Used RV: The Down Payment

rv-dealership-bullyan-rv.jpg If there ever was a time to buy an RV, it’s now. 

RV dealers are making giveaway bargains, and private owners are selling their RVs for pennies on the dollar. 

There is one problem though… if you turn on a television these days, the first thing you hear is we’re in the middle of the worst credit crunch in modern history. 

What does this mean for you, the consumer?

Getting An RV Loan

Chances are, walking into an RV dealership with nothing more than an ink pen (to sign on the dotted line) probably isn’t going to work.

Especially if your credit has even the smallest flaw. 

As banks come to grips with the fact that their pool of money to lend has pretty much dried up, what loans they do approve will be extremely low-risk.  That means, if you should default on a loan these days, there will be enough equity in the collateral attached to that loan that the bank won’t lose money when they sell off the assets.


Loan Amounts

Financing your RV purchase at more than the actual value is probably a thing of the past. 

Just a few short years ago, if you owed more on a vehicle than it was worth you simply rolled that extra debt over into the new purchase.  This practice is not likely to happen anymore.

Today, the requirements to obtain financing have tightened up to assure the financial institutions that yes, indeed, you really can afford this purchase and the loan will be paid to term.

Use this RV finance calculator to determine affordable payments and interest rates for your new RV.

 

Coming Up With The Down Payment

It’s likely that you will be required to come up with as much as 20% down payment for your RV purchase.  This can be accomplished by either paying that amount in cash out of your pocket, or by the residual value of a trade-in that will be part of the sale.

If you’re buying your first RV, obviously this eliminates a trade-in that could cover the down payment requirement.  Don’t despair, there are still other ways to raise the needed funds. 

For example, you may already have assets with enough equity to cover this amount for you.  That truck or boat sitting in the garage… as long as it’s paid off, then you can add it as collateral against the loan for the new RV. 

Likewise, if your home has increased in value dramatically, you can take out a home equity loan to cover the cost. 

Another source of cash that is often overlooked is cash value on a life insurance policy. In effect, you’d be borrowing from yourself, making approval a sure thing. 

Along these same lines, many 401k policies allow you to take a loan against your retirement. Again, a sure thing. 

For those seeking to establish credit for the first time, a co-signer may be required to seal the deal. 

 

One way or the other, if you’re in the market to buy an RV now is the time to act.  Once the economy gets moving again, you can be assured that RV prices will once again climb.

Curtis Carper

I’ve been involved in RVing for over 40 yrs -- including camping, building, repairing, and even selling RVs. I’ve owned, used, and repaired almost every class and style of RV ever made. I do all of my own repair work. My other interests include cooking at home, living with an aging dog, and dealing with diabetic issues. If you can combine a grease monkey with a computer geek, throw in a touch of information nut and organization freak, combined with a little bit of storyteller, you've got a good idea of who I am.

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  • JoeD

    I love articles that have no date of publication.