The summer months offer endless opportunities for fun outdoor adventures with family and friends. You might have dreams of cruising down the highway with your motorcycle pack, boating on your favorite waterway, or driving across the country in your new recreational vehicle. But, before you can set foot on the gas, you must figure out how to pay for that new leisure vehicle.
A personal or auto loan might be the first options that come to mind when you consider financing a leisure vehicle. There are, however, better ways to pay for your dream ride which offer more favorable terms and interest rates that cater to the uniqueness of such a purchase. Personal loans aren’t backed by collateral and may be challenging to secure for the amount needed to purchase your new ride. This leaves leisure vehicle loans or auto loans. Both use the vehicle as collateral, thus reducing the risk to the lender.
Let’s examine how leisure vehicle loans compare to auto loans and why leisure vehicle loans might be the better choice when you’re ready to start shopping.
Higher Loan Amounts
Your dream recreational vehicle likely has a price tag that exceeds the cost of most cars. Depending on the size, model, and features, recreational vehicles can run upwards of $200,000. Due to the higher price tag, financial institutions often distinguish leisure or specialty vehicle financing from automobile financing. This distinction allows for higher financing limits.
Extended Terms
Auto loans might have repayment terms up to 72 months (6 years), while boats and recreational vehicles may extend terms up to 180 months (15 years). The extended term length given to leisure vehicle loans makes monthly payments more manageable when combined with a competitive interest rate. Credit unions may even offer flexible terms that extend beyond those offered by dealerships.
Vehicle Condition
Similar to automobile loans, leisure vehicle loans can be secured for both new and pre-owned vehicles. This is good news for buyers since they can purchase their vehicle from a used dealer or private seller. Shop around for the best deal by comparing new and pre-owned vehicles from a variety of sellers.
Insurance Coverage
If you elect to finance your leisure vehicle, then you must secure insurance coverage. The amount of coverage required will vary. Collision, damage, and liability coverage are common requirements. Policy discounts may be available if you carry multiple insurance policies such as auto or home insurance, with the same insurance carrier or complete approved safety courses.
Interest Rates & Refinancing
A low-interest rate loan can translate to lower monthly payments and less overall money paid for your leisure vehicle. Your interest rate is influenced by your credit score with the lowest interest rates offered to individuals with the highest credit scores. As with an auto loan, borrowers can refinance a leisure vehicle loan to secure a lower interest rate or extended terms. Consider a refinance if you’re able to lower your current interest rate by at least 0.25 percent.
Purchasing a leisure vehicle is a significant investment. Shopping for competitive financing is just as important as shopping for your vehicle. Contact us to get started in the process. We make the application process quick and easy. We offer new and used motorcycle loan terms up to 72 months. Loans for new and used boats, recreational vehicles, and campers are offered with terms up to 180 months. Interest rates are tier-based and subject to credit approval. Apply now and receive same day approval with no payments for 60 days.
