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Attractive interest rates, flexible loans meet most RV buyers needs
By Stephen Evans

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Financing an RV is a relatively easy and straightforward process. Insurance plans designed to meet the specific needs of owners and their type of RV are also available through numerous insurers familiar with the way RVs are built, used and repaired.

One factor making it easier to purchase an RV is the predominant attitude among lenders that RVers are reliable buyers. Under 1.5 percent of all RV loans are delinquent. As a result, lenders are extending RV loan terms and making monthly payments more affordable, according to a survey of RV lenders published by Recreation Vehicle Industry Association (RVIA).

Loans for new, large RVs typically range from 10 to 20 years. Whether the purchase is financed through a bank, savings and loan, finance company, credit union or RV dealer, eight out of ten lenders require less than a 20 percent down payment. Nearly 30 percent of all lenders require a down payment of under 10 percent.

Loan terms for most used RVs usually require 10 to 20 percent down payments, but initial outlays are smaller because used RVs are priced lower. This makes it easy for the family on a budget to get into the RV lifestyle economically. Financing packages for used RVs generally extend from eight to 15 years. For the vast majority of RV buyers, the interest on their loan is deductible as second home mortgage interest. To qualify, the RV must be used as security for the loan and must have basic sleeping, toilet and cooking accommodations.

Virtually all RV types — motorhomes, van campers, travel trailers, truck campers and even some folding camping trailers — are equipped with these facilities. The Internal Revenue Service (IRS) publishes two booklets that contain helpful information regarding the tax deductibility of RV loan interest. Copies of "Publication 936 – Home Interest Deduction" and "Publication 523 -- Selling Your Home" are available by calling the IRS at 1-800-829-3676.

Many RVers these days are arranging the financing of their new or RV through online businesses rather than through RV dealers, or banks or other lenders. One company, Financial Underwriters Network, specializes in recreational vehicles and will pre-qualify a buyer online within about a minute.

One important thing to remember when financing an RV is to avoid getting "upside down" with a loan. This most often happens with a long-term loan on a new RV with a small down payment. "A couple of years later if an RVer wants to sell the RV he may be shocked to learn that because of its steep depreciation he owes more on it than he can sell it for," explained Chuck Woodbury, editor of NewRVer com and host of the Better Business Bureau DVD "Buying an RV."

Insuring an RV

Some RV dealers and lenders also offer RV insurance programs or may refer clients to an appropriate agency. RVs are specialized vehicles with unique insurance needs. Coverage on furnishings, fixtures, appliances and personal items are among the many differences between regular automobile and RV insurance. Insurers familiar with RVs are most likely to provide the best coverage and service with the lowest premium costs. One of NewRVer.com's sponsors, Explorer RV, will offer a quote through its website.

"Today's financing and insurance options make buying an RV easier than ever," said David J. Humphreys, president of the Recreation Vehicle Industry Association. "Families can readily find a vehicle, payment and insurance plan to fit their needs. Retail prices start as little as $3,300 for folding camping trailers, $9,500 for conventional travel trailers and $47,000 for motorhomes—and much less for a used RV."

If you plan to buy an RV but have a question about your credit history, and if it might affect your ability to obrtain credit, you can get some peace of mind through an instant credit report online from Equifax. I used this service recently before buying my new home and felt more confident when approaching the mortgage lender, knowing that there were no blips on my report. A credit report may also reveal misinformation that you can correct before applying for a loan. Furthermore, knowing your credit is solid may give you the confidence to negotiate a lower finance rate as author Bob Randall explains in his book "RV Buyers Survival Guide."




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