What types of RV Financing are available and what terms are available?
RV Financing falls somewhere between mortgages and auto loans with the loan type being more in line with auto financing. There are similarities to both. As in auto financing, the depreciation factor falls into play. Your RV will, sadly, go down in value each year, similar to a car or truck. On the other side of the fence your car or truck is not a tax deductible expense unless you use it in your business. The RV interest is.
RV’s are looked upon the same as a stick built home in the eyes of the tax authorities. The interest is tax deductible, even if it is not your primary residence. So long as your RV has fixed sleeping quarters, permanent cooking facilities, and permanent bath and toilet facilities, it is considered the same as a second home or vacation home, meaning in most cases, tax deductible interest.
If you use your RV in a business setting, you may be entitled to a number of additional tax breaks.(check with your accountant).
RV Financing – Terms
Terms of 15 or 20 years are not uncommon in RV Financing. As of this writing, interests rates are running in the 3.5% to 5.5% range with a credit score of about 690 for a $150,000 RV with a 10% to 20% down payment, depending on whether you are a full-time RVer or weekender. This is an average, based on estimates from several financial sources obtained on line.
RV dealers will often tell you that it’s better to finance your RV than to pay cash, if you have the funds available. This is often based upon the interest deductions available to RVers when financing their RVs. In some instances, this may well be a true statement, depending on your tax bracket and also the funds you have available over and above your purchase.
For us in our circumstances, it seemed better to have our coach paid for with a smaller amount left for income producing investment. Everyone has different needs and therefore different strategies.
Our advice is to look carefully at all sides and go over the numbers with your accountant.
Here is a chart from the Good Sam Finance Center that you can refer to for their current rates. https://www.goodsamrvloans.com/rates/
There are other banks and financing institutions that have online charts as well. Financing for all types of RVs is readily available and competitive enough to keep rates in a pretty good range these days.