Financing Class A, B and C motor homes
Lenders view each class of motor home differently
- Lenders consider Class A motor homes the lowest risk due to their higher resale value.
- Class B and C motor homes are seen as riskier due to their lower values.
- Used motor homes are considered the highest risk so financing them will carry high interest rates.
From motorized to towable, recreational vehicles come in various shapes and sizes to suit every lifestyle and budget. If you’ve decided that a motorized RV is right for you, the next step is to understand the different classes of motor homes and how they influence your RV financing.
Motor homes are categorized — in descending size order — as Class A, C and B.
Class A motor homes
Retailing from $60,000 into the millions of dollars, Class A motor homes are the largest in size at 21 to 40 feet in length. These vehicles are the most spacious and luxurious, and offer panoramic views for driving. Typically featuring central HVAC and slide-out systems that create even more space, buyers can upgrade amenities to their heart’s content. With the comfort and space of a house, Class A motor homes are ideal for full-timers or long-term living arrangements.
Class A motor homes eat up a lot of fuel, however, and their large size makes them hard to maneuver and park for the inexperienced driver. Class As are not suited for smaller roads, so if you plan to explore around a destination, a secondary vehicle is necessary.
Lenders are more willing to finance Class A motor homes over other types. While their high cost means they can depreciate quickly, Class As ultimately have a better resale value than smaller vehicles in the event that the borrower defaults and the lender repossesses the motor home. Lenders may offer loan terms as long as 20 years for new, Class A motor homes. Note that many lenders are hesitant to finance RVs for full-time living, however.
Class C motor homes
Counterintuitively, Class C motor homes sit between Class A and Class B vehicles in size and amenities. At 21 to 35 feet in length, these vehicles typically retail from $60,000 to more than $200,000. While comfortably appointed, buyers usually forego luxury amenities, such as a full-sized bathtub or washer and dryer.
Smaller Class C motor homes are easier to drive and have moderately better fuel economy than a Class A. They can sleep up to six people and are often favored by traveling families.
Not all lenders will finance motor homes that are not Class A, particularly if they are on the lower end of the pricing scale due to their low resale value. Lenders require strong credit and typically charge higher interest rates. Terms are usually no longer than 10 to 15 years.
Class B motor homes
The smallest of motorized RVs and ranging from 16 to 22 feet, Class B motor homes retail from $50,000 to $130,000. Nimble, compact and able to fit in most standard garages and parking spaces, Class B motor homes get much better mileage than Class As and Cs. A good choice for weekend warriors, Class Bs comfortably fit two people.
Class B motor homes give up space to trim costs. Without a cabover above the driver’s seat, these vehicles usually rely on foldaway beds. Shower and kitchen spaces are at a bare minimum.
As with Class C motor homes, the low resale value of Class B vehicles translates to more difficult loan eligibility and higher rates. Lenders experienced in financing Class B or C motor homes may be able to offer better loan conditions.
Used motor homes
Used motor homes are the most difficult to finance due to their low value and continued depreciation. Lenders thoroughly evaluate the condition and value of a used RV when considering it for financing, and a large down payment is typically required. As lower-value vehicles, used Class B or C motor homes will likely carry high interest rates.
While it is always wise to get preapproved for an RV loan before shopping at a dealership, knowledgeable dealers can potentially provide superior loan conditions. The key takeaway is to shop around.