Costs of an RV
Owning an RV comes with many expenses, including maintenance and insurance.
Purchase prices
Consider whether you want a powered RV or a towable RV when determining what sort of RV you want. While motorized RVs are often more costly, towing a towable RV will necessitate a trustworthy car capable of hauling it.
The price of an RV is also affected by its size and weight.
The following is a list of RV sizes categorized by class:
- Class A is the heaviest, weighing 13,000 and 30,000 pounds.
- The smallest RVs are Class Bs, which weigh between 6,000 and 8,000 pounds. The weight of a Class C RV ranges from 10,000 to 12,000 pounds.
According to the RV Industry Association, the following are the pricing ranges for new RVs:
- Folding camping trailers: $6,000-$22,000
- Truck campers: $6,000-$55,000
- Conventional travel trailers: $8,000-$95,000
- Fifth-wheel trailers: $18,000-$160,000
- Class B and C motorhomes: $60,000-$150,000
- Class A motorhomes: $60,000-$500,000
Of course, if you buy a used RV, you may save a lot of money on these prices.
Insurance
Most lenders will want evidence of insurance before releasing cash for an RV purchase. Discuss your alternatives with your insurance agent, and ensure your RV insurance fulfills your lender’s criteria.
Minimum coverage and maximum deductibles may be governed by state law.
Progressive, for example, offers RV liability insurance for as little as $125 per year. Extras like replacing damaged personal belongings, pet injury coverage, and RV accessory protection raise the cost. If you live in your RV full-time, you’ll also pay extra for insurance.
Storage
You may need to rent a storage space if you don’t have extra garage space or parking pad or if your homeowner’s association forbids RVs.
Prices for a 20′-long drive-up, uncovered storage facility in Charlotte, N.C., where LendingTree is located, are approximately $85 per month, while a drive-up, enclosed 10’x20′ unit is roughly $190 per month.
Maintenance
The cost of RV maintenance is determined by how comfortable you are with doing it yourself. To avoid difficulties, wheel bearing packs, water heaters, and air conditioners are routinely maintained once a year.
Regular inspections of your RV’s electrical system, water system, appliances and accessories, alignment, and furnace are also recommended, ideally every six months to a year.
A yearly examination and cleaning of your RV’s rubber roof are also suggested to minimize costly problems. The frequency with which you need generator oil changes or gas generator repairs, as well as chassis maintenance, is determined by how frequently you use your RV.
Although there is no practical method to predict all RV maintenance expenditures, a good rule of thumb is to set aside around $100 every month.
Call your local RV repair department to estimate how much it will cost to maintain the RV you desire and factor that into your budget.
If you want to park your RV for a few months at a time, don’t forget to inquire about the expenses of winterization and de-winterization.
Licenses and taxes
If your motorized RV weighs more than 26,000 pounds, you may need a particular driver’s license, but this is most likely only for an extensive Class A motorhome. Your ordinary driver’s license will be enough for the vast majority of RVs.
Most states have both sales and property taxes that apply to RVs. The costs might vary greatly, so verify with the motor vehicle authorities in your state.
Also Read: What is camper financing?
How to set an RV budget
1- Rent first
Purchasing, insuring, storing, and maintaining an RV, not to mention paying any applicable state taxes, is a significant investment.
Consider renting the sort of RV you want to buy before deciding. This allows you to try out the RVing lifestyle and a specific model to see whether it’s a good match before committing to an RV purchase.
2- Calculate your monthly loan payment
Using an RV financing calculator to figure out how much an RV will cost. To calculate the monthly cost of an RV loan, play around with specific figures, loan conditions, and other parameters.
Because you’ll have additional expenses to consider, make sure the payment is as low as possible.
3- Determine the other costs
Get an RV insurance quotation, figure out where you’ll keep the RV and how much it’ll cost, as well as the taxes in your region, and then estimate the cost of maintenance by speaking with an RV maintenance department or an RV dealer.
The benefit of conducting this research is that when you purchase the RV, all of your ducks will be in a row.
How to get an RV loan when you have bad credit
You will pay more for a bad-credit RV loan than a standard RV loan. We identified APRs (annual percentage rates) as low as 4.29 percent for applicants with acceptable credit as of the date of publication.
If authorized, applicants with terrible credit may be required to pay an APR of 24.99 percent or higher, up to the legal limit in their state.
Lenders assess your risk by looking at your credit history and credit ratings. They establish interest rates depending on their assessment of the risk, as well as the type and age of the RV you intend to buy.
Expect your RV loan interest rate to be higher than your vehicle loan rate: RVs are considered a luxury item, and lenders view them as a greater risk.
Get preapproved
You can boost your negotiation power at the dealership if you are preapproved for RV financing before you go shopping.
If you come in with a preapproval letter from a lender, the sales staff may take you more seriously, which will help you obtain a better deal. Depending on your creditworthiness, you might fill out a single online form and receive various offers from lenders.
Make a larger down payment.
When exploring your RV loan choices, talk to the lenders you’re considering to see whether making a down payment may benefit your position.
Inquire if putting down a larger-than-required deposit may help you receive a better interest rate or boost your chances of getting an RV loan. Some lenders already require a down payment of up to 20%.
Work on your credit
Credit scores vary from 300 to 850 on the FICO scale. Lower credit scores are statistically more likely to default on a loan, and credit ratings below 580 are considered substandard or poor.
You may work to improve your credit if you want to decrease your interest rate or if you’re having trouble being accepted for an RV loan.
Other RV financing options
There are alternative ways to finance an RV, such as using a credit card or a peer-to-peer loan, especially if you’re buying a used RV for a low price. However, these options have more excellent interest rates than the alternatives.
Personal loan
If you can’t get a bad-credit RV loan, another alternative is to get a personal loan to pay for the RV. Even with a credit score of 580, you might be able to get approved for a bad credit personal loan from a lender like Avant.
Prepare to pay interest that exceeds your state’s legal limit: up to 35.99 percent, depending on where you reside.
You might also be charged an origination fee and have loan terms ranging from 24 to 60 months. Depending on your credit, you may face further limits on loan amounts, which may limit your RV options.
Home equity loans
If your credit is terrible, but you have equity in your house, you might be tempted to use a home equity loan or line of credit to finance your RV (HELOC).
This implies you’ll use your home as collateral for your RV financing. If you fall behind on your payments, though, you risk losing your house. As a result, we usually don’t advocate financing an RV with cash secured by your house.
