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Buying an RV is an exciting time, but if you don’t prepare, it can quickly turn stressful. There are some simple steps you can take to ensure you get the best deal on your new rig and the loan you’ll need to finance it. Keep reading to make sure you avoid these RV loan mistakes so you can buy with confidence.
Not Trying to Haggle for the RV Price
The first RV loan mistake many would-be RVers make is not haggling on the price of your rig. The sticker price is not the price you should pay.
Dealers and private sellers always ask for way more than the bottom line. This is because too many people just pay what they’re asked without thinking twice.
This mistake can cost you thousands of dollars! You should always haggle on the price of an RV. And if the seller isn’t willing to budge on the price, be ready and willing to take your business elsewhere.
Know what you are willing to pay for a specific RV before you even think about purchasing it. Then make sure you get to that number or below.
Not Researching RV Loans in Advance
There are many ways to finance your RV purchase and researching to find the best loan will save you money in interest.
While some dealers offer to finance, you may get a better rate on your loan by going through a local credit union or Good Sam’s RV loans.
By researching in advance, you will not only get the best interest rate, but you will also know exactly how large of a loan you are approved for.
This allows you to shop RVs that are in your price range so you don’t drive out of the lot and get hit with buyer’s remorse. Avoid this RV loan mistake!
Forgetting About Your Credit Score
Another thing you need to think about when financing an RV loan is your credit score. First, having a high credit score before financing will get you the best interest rates. You’ll also likely be able to borrow more money to make that rig of your dreams a reality.
One other important piece about your credit score is that taking out a large loan will lower your credit score. If you’re trying to make any other purchases on credit, such as getting a mortgage for a home, a lower credit score will impact this borrowing ability.
Plus, since an RV loan will often have a 10 to 20-year term, you will increase your debt to income ratio for a long period of time. So, don’t forget to think long term before making a purchase.
Not Paying Close Enough Attention to RV Dealer Promotions
Dealers will often have deals spaced throughout the year. Whether it is a holiday or they are trying to clear out older models, you can save a ton of money by buying a rig on sale. You will get the best price on an RV if you plan well in advance before pulling the trigger on a purchase.
Not only will this give you time to research loans and boost your credit score if needed, but you can also make note of the various promotions. Maybe the dealer near you has a sale every Christmas. Rather than buying when there isn’t a promo going on, waiting a few more months might save you thousands of dollars.
If there are no promotions currently, you have a few options. You can either wait and hope, or you can ask the dealer when their next promotion will happen. Since you’ll have your new RV for years to come, waiting a few more weeks or even months for a deal isn’t that long in the big scheme of things. Don’t rush into an RV loan mistake.
Not Accounting for Other RV Costs
An RV comes with a huge sticker price, but when deciding how much you can afford to pay for an RV you need to take into account all the other costs.
For example, you’ll have RV insurance, which is usually much more expensive than car insurance. This is a recurring cost that you’ll always have to pay for. Premiums can be even higher if you are a full-timer or you want additional insurance for your possessions.
Another cost that catches people by surprise is vehicle registration. Many states base their registration fees on the vehicle’s age and/or value. When you’re spending $50,000 on the low end to hundreds of thousands of dollars on the high end, your registration fees are likely to be very expensive. You should definitely research fees in your state before making an RV purchase.
There are also other costs you’ll incur while using your RV such as gas (those things do NOT get good gas mileage), RV site costs, oil changes, and other regular maintenance, and any upgrades you want to add after purchase.
Before you buy an RV, you need to make sure you can afford all that goes into it, not just the monthly payment. Nothing would be worse than buying an RV you can’t afford to even use.
Neglecting to Compare Offers
This one goes along with haggling on the price. You may get a much better deal on an RV simply by purchasing from another dealer. Don’t be afraid to tell the dealer you are shopping around and another place has a better price. They’ll likely knock a chunk off the price tag if you do.
You can also compare the offers of similar RVs. Shopping around to find a model you like that doesn’t break the bank might take a little longer, but it will be well worth it.
Paying More Than Your RV’s Future Sale Price
The last RV loan mistake you want to avoid when getting an RV is paying more than the future sale price. It is important to find a good price on an RV because they depreciate extremely quickly.
The last thing you want is to be upside down on your loan and owing way more than the RV is worth. The best way to avoid this is to shop smart, consider depreciation, and if possible, buy a slightly older model that has already experienced much of its depreciation.
Being prepared to buy an RV is a critical step for success. When you get to a dealer, they are going to want to pressure you into making snap decisions that aren’t in your best interest. By preparing ahead of time and knowing your options, you’ll be the one in control. That way you can buy with confidence and feel good about your newest purchase. We created this “Preparing to RV Bundle” to help keep track of tasks, documents, and next steps in your journey. We want to help you avoid RV loan mistakes!
Used a Home Equity loan to buy my used 5er. Very low interest and low payments if I get in a jam some month.