Whether you’re a recreational vehicle dealer or a customer in the market for a new vehicle, one part of the process stands alone: financing rates. Smart customers choose dealers that find the best rates. Luckily, there’s another solution.
Banks, Dealers, or Somewhere Else?
RV loan financing historically comes from two sources, each with advantages and disadvantages: a bank or the dealer. Working directly with a dealer tends to be easier because it’s a single party, but dealer RV loan rates are often more expensive than if a customer went directly to the bank.
Before exploring the “best of both worlds” option, it’s worth taking a look at the advantages and disadvantages of securing RV and boat financing from both sources.
Pros – Customers generally have a nearby physical location where they can go for questions, raise concerns, make changes, or generally have a relationship. This can come in handy if, for example, a customer falls behind on their payments. Being able to go and speak with a local representative in person can make all the difference in whether extensions or other arrangements can be made. Small local banks and credit unions, in particular, tend to be fairly amicable.
Another key advantage is a bank’s RV loan interest rates are likely to be lower than with a dealer.
Cons – Banks generally don’t negotiate. If your bank makes a decision on an RV loan rate or a boat loan rate, that decision is typically final. This single offer may be in the customer’s favor or it may not be, but it will be difficult to tell unless the person has visited several banks and applied for multiple loans.
Pros – Working with a dealer can be easier than working with a bank. Or, put another way, working with a dealer can be easier than working with multiple banks (what a customer would have to do to find the lowest rate). Theoretically, a customer could arrive at the dealership, pick a boat or RV, fill out the necessary paperwork, get approved, and drive off on the same day. Speed and convenience like that can be quite attractive when making a decision.
It’s also possible the manufacturer is offering low rates or even 0% financing as part of a promotion. This normally only applies to new vehicles and could vary from month to month, but it’s important to keep in mind.
Cons – Unless a dealer is financing a loan directly, they will be financing it through banks they partner with. This is a problem for two reasons. First, even if customers are shopping around for the best rate, there will be a markup from the bank’s rate. After all, the dealer wants to make money on the loan too. Second, the bank doesn’t necessarily have to be local. The advantages of working with a local institution go out the window when working with a bank across the country.
Whether a dealer is financing a loan directly or shopping around to different banks, the convenience can come at a price.
Both bank and dealer-direct financing have flaws that can outweigh any advantages.
There’s Another Way
For customers looking for the absolute best rates and customer service, and for dealers who would rather focus on their primary driver of revenue (moving inventory), a solution is out there. Low financing interest rates, convenience, and customer service are desired universally by both ends of the transaction.
The expert team of recreational vehicle financing professionals at Finance Solution has relationships with formal lenders such as banks, so we can do the shopping around, while also offering the convenience of an internal financing department. Customers and dealers alike can appreciate how we do all of this at minimal cost. We are able to secure the lowest rates in the industry, while getting customers in their new vehicles quickly, as if they were working directly with the dealer. We make the entire process seamless.
Dealers: Learn more about our services and see how we are a far more cost-effective solution than having an internal financing staff. Customers: Give us a call and find out which dealers are already working with us!