May 11, 2017 by Space Coast Credit Union
Q: It’s vacation time again. This year, we’re thinking about doing something different and buying an RV, but RV lots seem so intimidating! What do we need to know to take some of the stress off?
Yes, summer is coming, which means many might begin hearing the call of the open road. Nothing is more American than a summertime road trip, but long hours in the car can really suck the fun out of any vacation. That’s the beauty of recreational vehicles. The road IS the destination; anywhere you go, you’ve got luxury-class accommodations already at your fingertips.
Buying an RV
is a big financial decision. If your biggest assets are your car and your house, this an RV represents a purchase that is somewhere between the two. There’s a lot to know before you set foot on a lot, and the more you research now, the better things will go.
With that in mind, here are three questions to ask yourself before you start shopping for an RV. With these as jumping off points for research, you can make informed decisions about your needs. You’ll also be able to more clearly communicate what you’re after, which will make the sales experience more pleasant for everyone.
1. What Class Type Am I Looking For?
Broadly speaking, there are three classes of RVs: Class A, Class B, and Class C. Class A RVs are the biggest and most comfortable. Built on big rig platforms, these are basically rolling houses. They feature full-sized couches and TVs, full bathrooms, kitchens and expandable bedrooms. Many also include storage underneath the vehicle (called the “basement” by enthusiasts) with enough space to stock supplies for a months-long journey. As one might expect for top-of-the-line vehicles, the price tags are as big as the vehicles, ranging anywhere from $60,000 to over a million dollars for custom-built motorhomes.
Class B RVs are on the other side of the spectrum. These are built on full-size van platforms. They can include scaled-down versions of the same amenities in Class A motorhomes, but in a more maneuverable, less costly package. Expect to see a small kitchen, a compact bathroom, and enough sleeping space for 2-3 people for several weeks. The price tags on these vehicles typically run between $50,000 and $100,000.
There are other options, of course. Camper trailers, pop-ups, and fifth-wheel tow-behind campers can often fill the same needs at lower prices. It’s worth investigating these options, as well.
2. What’s My Budget?
Before you make a major purchase, you’ll want to be clear on how much you can afford. Given the significant cost of purchasing an RV, financing periods are usually 10 years or longer. Since the value of an RV depreciates over time, interest rates
are slightly higher than home loan rates as well. It’s not just the monthly payment you need to include in your budget either. You’ll also need to factor in for fuel, insurance, registration, and maintenance — even if you don’t go anywhere!
Finally, it’s worth figuring out what you can budget for a down payment before you shop. You may be able to finance 100% of the purchase price of your RV, but putting money down helps protect you against depreciation. That means you’ll be able to get clear of your RV payment if you decide to sell it later on down the road.
3. When Should I Get Financing?
While many dealers will try to work out financing in-house, it’s never bad idea to go in with a pre-approval
instead. Not only will this allow you to negotiate from a position of confidence, already being pre-approved for a loan will prove to the salespeople that you’re serious about buying. Getting pre-approval will also make sure you don’t fall in love with an RV you can’t afford. Nothing can ruin a fun vacation like a big bundle of “How are we going to pay for this?” stress!
If you’re serious about purchasing an RV, the time to talk financing is now. How much RV you can afford should be at the forefront of your selection process, and getting your financing in order will help you figure that out. SCCU’s Watchdog RV loans
offer flexible financing options with fast approval and no application fees.