Purchasing a recreational vehicle is
very much about attaining a new way of life. The rolling
homes let their owners roam
to their hearts' content.
"It's the freedom and the comfort,"
says Peter Scalf, RV owner and founder of RV
Advice of the WWW. "It's basically like being at
home wherever you go. You can take off. You can just
hit the road. You don't have to have a real destination."
Even as gasoline prices are pinching budgets,
a study released in December by the Recreation Vehicle
Industry Association, or RVIA, found that more Americans
than ever are hitting the roads in recreational vehicles.
According to the survey, which was conducted by the
University of Michigan's Survey Research Center, nearly
8 million U.S. households own an RV. The RVIA estimates
that the numbers will only continue to rise as more
and more people look to RVs for their leisure-time trips.
But before you can start on that
journey, there's all kinds of financial maneuvering
that needs to be done. Landing a good financing deal
on a recreational vehicle takes some work.
First off, a recreational vehicle
is considered a luxury item. You'll need good credit
to qualify for the best financing.
"Applying for an RV loan is more stringent
than an auto loan in that you're required to fill out
a personal financial statement," says James Barron,
senior vice president of marketing and operations at
Credit Corporation, "but you'll not necessarily
be denied a loan based on poor credit."
"RV financing is credit score-driven.
The interest rate of your loan is really contingent
on your credit profile. Many lenders will consider a
C credit score, even a D profile, although most borrowers
tend to have an A or B credit score," he says.
The journey of a thousand miles
Banks, credit unions and independent finance companies
all offer RV financing. A list of RV financing companies
is available on the RVIA
Web site. Financing can also be arranged at RV dealerships.
As with autos, you want to have
a financing deal in place before shopping for your vehicle.
That way, the dealer will have to beat the interest
rate on the loan to get your business.
Check with your bank first. Scalf
says, "Shop around so you know what interest rates are,
what the value of the coach really is. Check it out."
People get so excited about finally
purchasing an RV that they're not as careful as they
should be when it comes time to crunch numbers. Scalf
has heard from people who ended up paying thousands
too much in interest, and one who learned that his RV
was worth $10,000 less than the purchase price.
Riding along with automobiles
Interest rates on RV loans are closely tied to auto
loan rates, which you can check in Bankrate's auto loan rates comparison area.
"It's really similar because that's
what the market bears for that kind of loan," says Karen
Mason, director of publications for RVIA. "The auto
and RV end up being very similar kinds of rates."