RVs give you the ability to move big groups of people across long distances comfortably. As a business owner, renting RVs may be a lucrative option if you frequently go on business excursions, travel between locations, or to events or trade shows. Utilizing a single RV can be safer and more efficient than having individual employees drive their personal vehicles. It can also be cheaper than having to provide every employee with gas and mileage reimbursement. However, there are several factors you should consider before purchasing from an RV lender. If you are wondering whether you should use used RV lenders to rent company vehicles, continue reading this post.
Often Require Collateral
RV lenders often require collateral for renting vehicles. Similar to auto loans, the collateral is frequently the vehicle itself. Without paying for a loan, a rented vehicle will be repossessed. When a loan is secured by the vehicle itself or another asset, it is referred to as a secured loan. Some lenders offer unsecured, or non-collateral loans additionally. However, in exchange for not having to put up any collateral, interest rates are significantly higher. In some cases, they are even double those of secured loans. Be aware of the collateral required before purchasing from used RV lenders.
Long Approval Process
RV lenders impose an extremely long and thorough approval process on buyers. Renting an RV is more similar to renting a house than it is to a car. Because of this, being approved for an RV loan is comparable to being approved for a mortgage. Lenders analyze the previous performance of your business and your current financial standing in order to determine your approval. Some lenders may even conduct a background check on renters. Your current stability and financial well-being ultimately determines the interest rates and fees you will be quoted. If you believe your financial standings will weaken your ability to be approved, consider offering a larger down payment. Doing so demonstrates your financial responsibility which can lower interest rates. Be aware that many lenders impose a long, invasive, and difficult approval process on potential renters.
Some RV lenders charge minimum rental duration. In order to be considered for rental, you must rent an RV for a specific period. Sometimes these duration are as short as a week, but can often be as long as one month. When unnecessary, these minimum rentals can be extremely costly and drain your overall transportation budget. Because of this, if you only need vehicles to travel locally or only for a single day, RV rentals are likely not practical. However, if you plan on using RVs for longer business excursions, this likely will not impact you much. Consider minimum rental periods before speaking with used RV lenders.
Charge Higher Interest Rates
RV lenders often charge higher interest rates than traditional lending institutions. Many used RV lenders offer on-site financial services. These make it easier for customers to obtain vehicle financing. However, this is not the only financing option available. In fact, it is often the more expensive option in comparison to traditional banks and credit unions. Speak with local and large commercial banks about RV loans offered. Compare these rates with those of various online lenders and credit unions. This process best helps you understand the true market value of interest rates on RV loans. In considering renting from RV lenders, be aware that they often impose higher fees than traditional banks and credit unions.
Could Owe More Than Vehicles Value
In many cases, renters have ended up owing RV lenders more than the vehicle’s worth. With high priced items like RVs, the value of the down payment is crucial. Although many lenders only require a 10% down payment, consider at least placing 20% down. If you do not, you are constantly charged interest on that unpaid 10%. In addition to this, RVs experience rapid depreciation. If you rent an RV when it is new, or for long periods, you will likely encounter a significant change in value. Some statistics have even measured that RVs experience 20% depreciation within their first year alone. If you are the renter across that year, that depreciation is on your hands. Before you renter from RV lenders ensure you do not end up owing more than the vehicle’s worth.
RVs are a luxurious and comfortable method transport big groups of people. For traveling businesses, they can be an especially appealing option. However, before you rent an RV, there are several things you need to know when working with used RV lenders. Lenders often require collateral on the loan. It is a long approval process to qualify for renting an RV. Lenders often conduct financial analyses and credit checks on renters. Some lenders impose minimum rental periods on renters. Used RV lenders often impose higher interest rates than traditional lending institutions. Furthermore, if you are not careful, you can quickly end up owing more than the vehicles worth. If you are contemplating whether you should use used RV lenders to rent company vehicles, consider the factors mentioned in this post.