How to choose the right RV for you

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Ask a Lender
September 18, 2017 | Updated September 27, 2017

Key Points

What to look for when purchasing a recreational vehicle

  • RVs can be large, rather expensive motor homes, or small, less expensive towable vehicles.
  • Motor homes are divided into three types, by size, amenities and price.
  • Negotiating is a key tactic with an RV dealer.
  • Purchasing an RV in the fall or winter can save money.

Whether you’re a retired couple wanting to spend your golden years traveling the country, or your family includes young children who like taking long summer road trips together, a recreational vehicle (RV) may be the way to mold your plans into reality.

Similar to automobiles, RVs come in many shapes and sizes, and the financing options offer enough variety that it’s worth shopping around to find the best deal. There are two basic types of RVs.

Motor homes

If you don’t already have a truck or SUV with significant horsepower and towing capability — or you don’t wish to purchase one — a motor home can provide the space you need for long trips. They have similar characteristics to buses or large vans. And they are categorized into three types.

Class A vehicles

They have the best amenities — captain’s chairs for the driver and passengers, large living spaces with dining tables, kitchens and appliances, and even full-sized bathrooms and bedrooms. They often include slide-outs, or side-to-side extensions, for creating extra space. They’re ideal for traveling parties of four or more people. And they’re the most expensive type of motor home, with price tags ranging from $50,000 to more than $2 million for the most luxurious models.

Class B vehicles

They often resemble vans or SUVs from the outside, and they are smaller and more maneuverable than Class A motor homes. However, they offer many of the same amenities, just on a smaller scale. They’re best suited for two or three people. And they’re generally less expensive, with most models going for $100,000 or less.  

Class C vehicles

Think of them as a hybrid, as they have bigger living spaces than Class B motor homes — sleeping space above the cab is a common feature — but poorer gas mileage. If you need to tow a car for convenient driving and parking in urban areas, a Class C motor home may be your best bet. Generally, they’re less expensive than a Class A vehicle but more expensive than a Class B vehicle.

Towable RVs

These are less expensive than motor homes because they don’t have their own motors. Using a hitch, you attach them to the back of your truck or SUV.

Travel trailers

Depending on the size and amenities you’re looking for, they’ll usually cost less than a fifth wheel or motor home. Expect to pay anywhere from $10,000 to $35,000 for trailers of 20 to 40 feet. They offer flexibility in towing as they attach to any bumper with a ball-and-coupler hitch. Although many SUVs can haul a travel trailer, you’ll want to check your vehicle’s towing capacity before purchasing.

Fifth wheels

The important distinction with fifth wheels is the need for a special attachment, known as a jaw hitch. This device attaches the fifth-wheel trailer to a truck bed. Fifth wheels are generally larger and more expensive than travel trailers, and their size makes owning a truck a necessity for safe hauling.

Tips for financing RVs

There are several considerations when obtaining an RV loan. Negotiating the sales price may be at the top of the list. Before going to a dealership, shop around online to compare prices. Also, look carefully at interest rates, as your bank or credit union may offer a lower number.

When you go to a dealership or RV show, be prepared to haggle. Many RV dealers inflate their prices, anywhere from 25 to 50 percent, so start with a lowball offer that’s half the asking price and see how the salesperson responds. They may offer a deep discount or perks such as 0 percent financing for a year.

You’ll want to consider the pros and cons of buying a new or used RV. A new vehicle, obviously, will likely have a higher sales price, but may be more reliable. Used RVs may have damage or defects that aren’t apparent, costing you more for long-term maintenance and repairs. Insurance is another consideration: You’ll likely pay more to insure something new.

Finally, think about the timing of your purchase. Many dealers will offer better deals during the fall or winter, when business is slow and they’re looking to make room for new inventory.

RV loans offer similar interest rates as traditional auto loans, from 4 to 7 percent. However, most lenders will offer longer terms, usually 10 to 15 years, and sometimes as many as 20 years. They may include balloon payment requirements that borrowers should be aware of. A down payment of 10 to 30 percent may be required, depending upon the loan amount.

There are also tax benefits to owning a motor home or towable vehicle if you’re planning to use it as a primary or secondary residence. The Internal Revenue Service (IRS) permits the same tax deductions as any other home. As long as your RV has sleeping, cooking and toilet facilities, it can be considered a home even if it doesn’t have a permanent location.

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