Internet RV Loans vs. Dealer Financing
You've just signed a purchase agreement with your local (or not-so-local) RV dealer. You know the drill... Your next stop will be the Finance & Insurance Office, (a.k.a. F&I) for your RV loan, financing rates, warranty, insurance, etc.
Your salesman does the "hand-off", and suddenly you are faced with a decision that seems simple, but can cost you many times the profit made on the "front end" of your transaction; the "back end", or Finance and Insurance office.
As I always try to convey to my clients: "The dealer is NOT the enemy." In fact, he can be your best friend when your RV is in need of service or repair. He has laid out literally MILLIONS of dollars to allow you the opportunity to browse a good selection of units. He has paid his dues and continues to pay them on a daily basis. Keep his - and your best interests at heart when deciding on your source of any potential RV or motorhome financing.
There is one hard and fast rule that applies to RV Dealer provided financing. He must "pack" (inflate) the "buy rate" (interest rate) on the financing he provides to his customers to earn a profit on the transaction. Once again, he uses this profit to pay overhead, commissions, etc.
1. Should you consider the benefits of financing through your RV dealer? Yes.
2. Are you stuck with the financing and interest rate he quotes? NO.
3. Should you consider alternative sources of financing? Definitely!
4. Should I check Internet RV Loan Rates First? You MUST know the current rates!
Most RV buyers are so frazzled by the time they finish the negotiation to finalize the purchase of a new RV that they fold under the pressure of the F&I office. This can be a costly mistake.
Shopping for your best interest rate and terms can be just as important as shopping for the right RV, and negotiating your best price. In fact, you stand to save literally THOUSANDS of dollars by simply lowering your interest rate by a quarter to a half of a percent.
Information is the Key to Financing RVs Online or Offline
Online RV finance companies normally use many of the same lenders that RV dealers use. It's simply a matter of overhead and the cost of doing business. Since the Internet-based companies generally have lower operating costs, they are able to pass the savings on to you.
Most Internet RV finance sources have online rate quote forms and loan applications which can be completed in a matter of minutes. Normally, credit approval can be obtained the same day you apply.
When you submit your online application, you should also be prepared to send some additional documentation, which is necessary for your approval.
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Required RV Loan Approval Documents
If you are EMPLOYED (work for someone else), you will normally be required to fax or email proof of income. This is usually a recent pay stub and your last 2 year's W-2 forms. (For each applicant)
If you are SELF-EMPLOYED, you will normally be required to send your last 2 years tax returns and any attached schedules.
If you are RETIRED, you will need to provide documentation of social security benefits, pensions, dividends or other sources of income.
Once your loan is approved, your loan processor will help you in obtaining additional documentation, such as:
A copy of your purchase agreement with the seller.
A copy of the title. (MSO on new units).
Proof of insurance with the lender listed as "Loss Payee".
Copies of all the applicant(s) driver's licenses.
Most onilne RV loans take from 4 to 6 business days to complete. Information must be collected, and documents must be sent by overnight mail for your signatures, and then sent overnight mail back to the lender.
When arranging the purchase of an RV, you should typically allow a week or so for your scheduled delivery date. This should allow plenty of time for rate shopping, loan approval, and closing. When your loan closing is completed, funds can be sent to the seller by overnight mail, or simply wire transferred. To save time, you may also choose an RV loan pre-approval so you're ready to close as soon as you find the right RV.
Which Type of Financing is Best?
If you want EASY? Let the dealer handle it.
If you want the BEST RATE? Do a little work.
Sure you will have to do a little more work, but if you break down your long-term savings into the actual time you have spent researching and completing your RV loan... You could be making a VERY short-lived hourly wage roughly equivalent to that of Bill Gates.
Learn, Save and Enjoy!
Best Rate Team
Best Rate Motorhome Financing