Peak caravanning and camping season is fast-approaching and it’s time for RV buyers to action their purchase plans. There may have already been plenty of thinking, browsing and inspecting different RV styles, makes and models to arrive at the decision as to which is the right RV for individual holiday and travel plans. But when buying a caravan with financing involved, should the RV be selected first or the should the RV loan be secured first?
While you’ve been focussing on the RV selection, perhaps this is not something you have given much thought to. Does it really matter? There can be positives with either approach – loan first, RV first. We address the topic to assist buyers with streamlining their RV purchase process and acquiring the most affordable financing.
Buying a Caravan – What Factors Affect the Loan
In considering loan or RV first, buyers may be helped by knowing more about what is involved in financing a RV. Knowing what does and what does not affect the loan. Firstly, the style or type of RV does not affect the type of loans available. But the age of the vehicle – new or used, can affect the loan.
All styles and variants of recreational vehicles including traditional caravans, camper trailers, hybrids, toy haulers, motorhomes, off-road and others, can be purchased with financing. The two types of loan products are a secured loan and an unsecured loan.
A secured RV loan is the most popular choice for buyers of new RVs and quality second-hand vehicles. The lender needs to accept the vehicles as suitable collateral against the loan. This security is registered by lenders on the PPSR. Older vans will need to be considered by lenders and if not considered acceptable as collateral, then unsecured credit is an option.
The choice of secured or unsecured loan product does have a significant bearing as interest rates are higher for unsecured loans.
The amount that the buyer requests for the loan, which may reflect the purchase price of the RV, can affect any loan offer. Lenders assess applications and particularly applicant’s financials and credit history, to determine their borrowing limit. They will also assess the loan total requested against the value of the RV – the LVR or loan-to-value ratio.
The price of the RV, which may reflect the size, quality inclusions and other features, may also impact the interest rate. The price can determine the loan total, which then has a bearing on the risk assessment of the applicant by the lender, which then affects the interest rate offer.
Applicants with a good credit score and strong financials attract the best loan offers. Addressing these issues prior to applying may improve any loan offer. This may entail paying off other loan commitments and reducing any outstanding amounts on credit cards.
The choice of lender can also affect any loan offer. While secured and unsecured loan products are available through most credit providers, the interest rates offered vary across the market.
Buying a Caravan – Loan First Benefits
When buying a caravan buyers can secure their loan prior to selecting their vehicle through Jade Caravan Finance, with the same rates as post-purchase loans. While loan first or RV first can come down to timing in finding the vehicle and/or personal preference, as specialists in RV financing, we see numerous benefits to sourcing the loan first.
When securing their loan before making the final vehicle selection or even starting the search process, buyers may have greater confidence and the selection process may be shortened and streamlined, with the knowledge of how much they approved to borrow. Allowing the vehicle to be selected to suit the loan repayments and to budget.
That increased confidence may be helpful when negotiating with dealers on price and when deciding on all those extras and options available with new vans. Knowing the borrowing and buying limit, may assist in not overstretching the budget.
Pre-approved financing can be helpful when ordering at RV shows and expos. A very popular way for buyers to explore multiple options at the same time and place and potentially simplify the buying decision. Knowing they have financing approved, can allow buyers to order on the spot and possibly take advantage of any show discounts on offer.
Loan first can also be beneficial when buying models with limited availability, including one-off used vehicles. Loan first – be in first to capture the deal.
Whether it’s loan or RV first, there are neutral factors – the approved borrowing limit, the interest rate, and the types of loans available will be the same.
Resources to Assist When Buying a Caravan
Buyers can use available tools and resources to assist them in their purchase process. Our specialist RV finance broker service is available for all buyers of all types of RVs, whether opting for loan or RV first. We ensure the most competitive rates from across our vast lender base on both secured and unsecured loan products.
To establish a benchmark for buying prior to starting their search, buyers can use our Caravan Finance Calculator. This is a great resource to quickly obtain loan estimates based on a loan amount. Buyers can compare loans for different RVs at different prices and with different borrowing amounts to assess affordability, make deposit decisions, and obtain a better indication of their options.
Whether opting for RV first or loan first, when buying a caravan speak with Jade Caravan Finance about our great deals on RV financing.
DISCLAIMER: THE DETAILS AND INFORMATION IN THIS CONTENT ARE PREPARED AND PRESENTED PURELY FOR INFORMATION AND NOT INTENDED IN ANY WAY AS THE SOLE SOURCE OF FINANCIAL ADVICE FOR CARAVAN PURCHASING. IF ADDITIONAL FINANCIAL ADVICE IS REQUIRED, READERS SHOULD REFER TO A FINANCIAL ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY ERRORS, PRODUCT DESCRIPTION VARIATIONS, OR OTHER MISREPRESENTATIONS OF INFORMATION AS PRESENTED.
