Your Guide to RV Financing: Timeframe, Costs, and Mistakes to Avoid

How Long Can You Finance an RV? 

An RV can make an excellent addition to your life, but it's no small investment. With new RV prices quickly reaching into the tens of thousands of dollars, even a small-range towable RV will likely need financing. So, for how long can you finance an RV?

Loan Lengths

The length of your RV loan will depend on many factors, such as the cost, your credit score, the loan payment where you get your loan from, and how long you want your loan term to be. On average, you can find RV loans available for terms of ten to fifteen years. Some institutions will even offer loan timeframes of up to twenty years, though these aren't as common.

A critical thing to remember is that while a longer loan term will have smaller monthly payments, you will ultimately pay more money in the long run due to interest rates. If you can afford to, having a shorter loan term will be better for paying off your RV with less money.

Used vs. New RV Prices and Financing

When looking through an RV finder, you may notice a vast difference between the prices of new and used RVs. This decision can be a tricky one to make since there are plenty of advantages to both options.

With a new RV, you'll have access to top of the line convenience features, which may not be in a used model. However, just like cars, the value of an RV depreciates over time. Even if you take care of it, you won't get your money back on the resale—and you can see depreciation as much as thirty percent after you purchase the RV and take it home.

On the other hand, a used model likely won't lose as much value over time. However, you still run the risk of getting an RV that isn't the best of shape, even if you'll save money at the initial purchase. The key is to inspect any used RV carefully before committing to purchasing it.

RV Loan Mistakes to Avoid

Even when you head into shopping for an RV understanding what financing will look like, it can be easy to make mistakes along the way. Here are some pitfalls to stay aware of so you can have an easier time buying your dream RV.

Not Trying to Haggle for the Price

It can be easy to see the cost of an RV and think it's out of your range, but that may not be the case. Many times, a dealership will markup the price of an RV—sometimes as much as thirty-five percent. That means there's usually plenty of leeway for you to haggle the price downwards, whether you want to save money or bring an RV down into your price range if it's barely outside of your budget.

Using an RV finder in advance can help you get a better grasp on prices and deals before you commit to a final price.

Not Researching Loans in Advance

Aside from finding an RV that fits your needs, establishing a budget is essential so you can afford your loan payments. That means a necessary step before you even begin to look at RVs is to understand the amount of money you can likely get from financing, which will help you set the maximum amount of money you can afford.

While the RV you choose in the end will impact the exact details of your loan, knowing your options in advance will help you make a smarter financial decision.

Forgetting About Your Credit Score

Your credit score will play a substantial role in determining not only if you can get a loan, but also what you'll potentially pay in the long run, much like when receiving a car loan. Having a score in the high 700 range is best, and the lower the number, the more you can expect your RV to cost you, especially if the number dips into the low 600s.

Before getting too far into your RV shopping journey, confirm your credit score to ensure you'll get a reasonable loan rate.

Not Paying Close Enough Attention to Dealer Promotions

When you're on the lot, dealerships will often have special promotions to help make sales. These offerings can sound good on the surface, but there's always the chance of some hidden fee cropping up and causing you to pay more for your RV than you would otherwise. If you get too swept up in the excitement, you may miss something in the fine print.

Always read the details of a dealer promotion carefully and stay alert so you don't miss another lending source that can get you a better deal.

Not Accounting for Other Costs

Paying the RV loan is only going to be one of the expenses that you'll have once you get your camper. Aside from the financing cost, additional taxes, and registration and license fees, you'll need to consider:

  • Campsite and storage fees
  • Maintenance costs
  • Gas prices
  • Utility rates

While these costs are part of owning an RV, they can quickly add to the cost of ownership, especially if you take several trips. With these additional expenditures involved, you may be taking on more than you think you are. Be sure to honestly account for these costs in your budget, and make sure your monthly payment isn't more than you can afford.

Neglecting to Compare Offers

If you're ecstatic about purchasing an RV, it can be easy to pick out the first loan you can get and roll with it. Unfortunately, this can turn into a costly mistake just as quickly. It's best RV loan practice to consider at least three or four different lenders before settling on your final choice. Between banks, credit unions, and specialized RV lenders, you have plenty of variety from which to select.

Paying More Than Your RV's Future Sale Price

As we mentioned before, a brand-new RV's value can depreciate substantially just by purchasing it and driving it off the lot. With that in mind, there's a high risk of owing more in your loan cost than you'll be able to earn back when the time comes to sell your RV. The larger a down payment you make, the less you'll owe in loans, and the better chance you'll have at getting your money's worth.

If you know you're committing to RVing for the long haul, another smart strategy to use is to start small. Smaller RVs cost less, which means they're much quicker to pay off. You can then trade it in for an upgraded model, having a cheaper loan in the process. This approach will also give you time to learn what you like in an RV without paying a hefty amount from the start.

Thinking You Can Only Pay Your Monthly Bill Amount

Even if you get an excellent deal on your RV loan, it's still possible to save some extra money if you make smart payments. Paying more than your monthly bill amount can help you pay off your RV faster, which can open up more money to enjoy time on the open road and in campgrounds. If you can afford to put a little extra money on your RV loan, it can be worth it in the end.

Wrapping Up

While it's possible to have an RV loan for up to twenty years, not everyone will need that long of a payment period. Consider your budget thoroughly to make the best financial decision for you.