Best RV Financing Rates due to Covid-19

How to save money on RV Financing during the era of Covid-19

In 2022 it is easy to say, "Be careful what you wish for." Because we all collectively wished for the same thing - the termination of the year 2020 - and wished it again in 2021. We all hoped and prayed for a symbolic reset button for the global suffering and economic disaster that impacted each of us in innumerable aspects ranging from insignificant to unimaginable.

RV Financing - The Year of Covid-19 in Review.

RV sales were lower than expected in the first few months of the year. RV lenders fought for business by lowering their interest rates. RV dealers waited for the anticipated upswing in sales as the year began, just as we had predicted.

Then came something we had not foreseen. Covid-19. And, along with it came the rapid succession of lockdown orders, business closures, and job losses. The slinky-like economic effects reverberated throughout the economy and life as we knew it was gone.

As a result of Covid-19, RV dealers began selling virtually all of their existing inventory of every unit not physically bolted to the lot. Orders of new RVs started to stack up, and suddenly RVs were HOT!

When People Won't Fly - They Buy RVs, and DRIVE!

Recreational vehicle and marine industry-related businesses began learning to adapt to events on the fly, missing employees, home-schooling, and "social distancing." The CDC began to change its mind on a near-weekly basis. Every day we all faced new challenges and changes in our routine and lifestyle.

Even with all the bad news, the recreational vehicle and lending industries began to see rapid changes. Suddenly, there was a massive demand for RVs. Dealers could never have predicted the incredible spike in RV sales due to states finally allowing people to leave their homes.

As a result, RV dealers began selling virtually all of their existing inventory of every unit not physically bolted to the lot. Orders of new RVs started to stack up, and suddenly RVs were HOT!

RV manufacturers were building units as fast as safely possible. Unfortunately, most of the new RVs coming off the line already had a new owner's name attached.

RV Loans Surge from 300% to 500% due to Covid-19

RV lenders scrambled to handle the rapid increase of 300% to 500% in boat & RV loans and loan applications were stacking up as lenders' already limited staff hustled to catch up.

Throughout the 2nd and 3rd quarters of the year, buyers had longer than usual delays in closing and funding RV loans; however, things began to settle down toward the latter part of the year. Commonly seen 2-3 weeks delays in loan closings began to return to an acceptable time frame during the 4th quarter of the year.

By the end of the year, RV dealers had begun to recover, and inventories were back on the rise as sales have slowed to a nice increase over the previous year's final quarter.

In addition to the arrival of newly manufactured RVs, we expect used RVs to flood the market over several years due to impulse purchases. Many quarantine-fatigued buyers acted too quickly and without the proper due diligence.

Some of these over-motivated new RV owners quickly realized they had purchased more than they could afford. Others did not research their checklist of needs and acted on their short-list of wants and are trading for different floor plans, RV types, or whatever correctly fills their needs.

Most of them are taking significant losses in unloading units now in storage or sitting unused. This glut of used RVs will offer an excellent opportunity to savvy buyers over the next few years.

The New Normal Can Also Signal New Opportunities

As the dust began to settle, the RV financing and sales industries started their return to normal, or as close to the "good old days" as possible. Under rapidly changing circumstances and continuing uncertainty, nobody can predict what the future holds.

However, after several years of declining RV sales and financing and the current year's anomaly, many economic indicators have been heading in the industry's right direction. For the next few years, most of the dealers surveyed expected an increase of 8% to 12% per year in new unit orders from RV manufacturers.

RV Loan Rates are Still Historically Low

If you are in the market for a new RV and subsequent financing, there may never be a better time to find the right unit at the right price. You will have a better than average chance of finding a great deal on an RV if you do your homework.

Due to the Covid-19 pandemic, the Fed has cut loan rates to the bone. Don't expect to see RV loan rates in the same range as home loans since RVs are luxury items. However, we live in a time where most interest rates are lower than many of us have experienced until a few years ago.

RV inventories are on the rise, and RV loan rates have been at rock bottom. You'd better hurry because the RV lenders have already begun to raise rates, so the house party may be coming to an end soon. There may never be a better time to purchase and finance an RV - so get out of the house and get back on the road!

Don't let yourself fall into the same trap as the many impulse buyers did during the early days of Covid-19. Remember to make your list of needs, research different RV types, floor plans, pricing, and other due diligence. Stay within your budget, and be sure to be pre-approved for your new RV loan.

Be careful and listen to the experts. But, this year could be your time to hit the open road and discover the beautiful United States of America.