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New vs. Used RV Loans: What’s the Difference?

Recreational vehicle demand is booming as people look for new ways to travel and spend time outdoors. If you’re looking to buy an RV and join in, you’ll face a critical financial decision: new versus used.

New RVs offer peace of mind with manufacturer warranties, but used RVs could deliver significant price savings. The differences between new and used RV loans, however, are minimal. APRs tend to be lower the more you borrow, but that doesn’t necessarily mean you should rush out and buy a brand-new motorhome. Your rate will depend on several factors, including your credit.

RV loan rates

You can find RV loans through your bank, credit union or online lender or an RV financing company. But you won’t find one through an RV manufacturer — unlike automakers, RV manufacturers don’t offer low or 0% financing deals. This means less incentive for lenders to cut rates, so it’s smart to shop around. The national RV lenders below offer the same rates for new, used and refinance RV loans.

RV Loan Details
Starting APR Range Terms (Months) Amounts
Essex Credit 3.99% – 9.49% 48 – 240 $10,000 – $2,000,000+
Good Sam 3.99% – 9.49% 48 – 240 $10,000 – $2,000,000+
GreatRVLoan 3.99% – 17.95% 60 – 240 $10,000 – $2,000,000
LightStream 4.29% – 11.89%* 24 – 84 $5,000 – $100,000

*Includes an autopay discount.

It’s important to note that some lenders on the list above may only consider those with good credit, while others, including Great RV Loan, may have more lenient requirements. Bad credit RV loans are available, but you may pay a higher APR — it could be worth it to wait while you improve your credit.

Where to get new and used RV loans

As we mentioned earlier, there are several places to look when you’re ready to finance an RV. Paying cash is an alternative, especially for an inexpensive used RV, but you cannot lease an RV like you would lease a car.

We’ll talk more about loan alternatives in a later section — in the meantime, here are the primary routes for new and used RV loans.

Dealerships

RV dealerships are rarely lenders themselves, but can function as a middleman to help you find an RV loan. When you apply for financing through the dealer, it sends your application to a network of lenders, including banks, credit unions and financing companies — that’s why it’s always smart to go straight to the source yourself. Dealers can (and often do) show you the RV loan offer that suits them the best (the one with the largest business referral fee, for example).

Get an RV loan preapproval directly from a lender or two of your choice before you go RV shopping. Then, with the offer in hand, ask the dealership to beat the lowest rate you received. This way you know you got the best RV loan rate for you.

Banks

A local or national bank that you already have a relationship with may offer RV loans. Some of the biggest banks, such as Bank of America and Chase, don’t have RV financing among their products — however, USAA Bank and Wells Fargo Bank do offer RV loans.

Credit unions

According to the National Credit Union Administration, credit unions offer lower average rates on all types of loans compared to other lenders. Check with your local credit union to see what it offers and whether you meet its membership criteria. You could also consider a military-affiliated credit union like Navy Federal Credit Union or PenFed Credit Union.

Financing companies

Companies like Great RV Loan specialize in financing recreational vehicles. They, in turn, may shop your loan around with their own network of lenders. With no branches to support, overhead costs are low, which may translate to lower rates for borrowers.

New vs. used RVs

New RVs include the latest features and the benefit of a fresh start. You can drive away in a new rig without worrying about replacing worn-out parts. But you will pay for it with steep depreciation — a new RV can lose 20% to 30% of its value as soon as you leave the dealer’s lot, a potentially big hit considering the priciest motorhomes can run into the millions.

Used RVs have their own drawbacks, so be sure to check for signs of damage from accidents, water leaks or other mishaps before buying. It’s also important to note that not just any used RV will qualify for a loan.

How to qualify for a used RV loan

With so many types of RVs — ranging from pop-ups that cost a few thousand dollars and are towed behind a car, all the way to pricey classic Airstreams — what exactly qualifies for an RV loan depends on the lender. RVs usually must be:

  • Mobile (so-called “park” models or certain tiny homes may not qualify)
  • 11 years old or newer (some lenders may consider older models)
  • Equipped with eating, sleeping and toilet facilities
Down payment

Some lenders finance up to 100% of the RV’s value, while others prefer a down payment, perhaps even one as high as around 20%. But even if one isn’t required, you may find that even a small down payment could help you qualify, while a larger one might lower your APR.

RV loan calculator

Of course, the type of RV and RV loan you can get comes down to what you can afford. The cost of owning an RV will be greater than the payment you have to make on it, so make sure that the payment is comfortable for your budget.

RV loan alternatives

There’s more than one way to buy an RV — you could also consider:

Home equity

You could get the funds to buy an RV at a lower interest rate through a home equity loan or home equity line of credit. However, using your home as collateral isn’t without risk, so consider it carefully.

Personal loan

If you want to borrow a relatively small amount, a personal loan might be the only way to finance an RV. Some RV lenders require a minimum loan amount as high as $25,000. Starting APRs for a personal loan might be higher than a traditional RV loan, so again, it’s important to shop around for your best rate.

Peer-to-peer lending

If you have poor credit, a personal loan from a peer-to-peer lending business such as LendingClub may be an option for you.

Cash

If you have the money, why not pay cash and skip the loan interest? If you’re concerned about maintaining certain cash reserves or don’t want to deplete your savings or investments, consider paying half the RV’s price in cash and financing the rest.

 

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