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Auto Loan

How to Lease an RV

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

 

How to Lease an RV
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Perhaps you’re interested in RV ownership, but want to try before you buy. You can’t lease an RV the same way you can lease a sedan, but you can rent one. Although auto rentals are usually short-term, it’s possible to rent all types of recreational vehicles — motor homes to pop-up trailers to camper trucks — for months. Renting an RV, long or short term, may be a great idea as RV prices and ownership tend to be high. But you should be aware that RV rental costs vary and you may have to plunk down a deposit before going on a road trip.

Why can you rent but not lease an RV?

Depreciation is the wrench that stops RV leasing from being feasible. Like most passenger vehicles, RVs lose about 20% of their value in the first year. Unlike most passenger vehicles, motorized RVs have an average price around $100,000, which makes that 20% depreciation add up to a lot of money.

Depreciation slows after the first year, so the RV may have lost a total of 28-40% of its value by the time it’s three years old. For a $100,000 RV, a 30% depreciation means you would have paid $30,000 in three years to lease it, plus taxes, which could put your monthly payment around $900, and you’d walk away with no equity.

Some of the reasons RVs depreciate so sharply include:

  • Short warranties. Some RV companies only offer a one-year warranty on their products.
  • Wear and tear. Both living in and driving an RV around might make a new RV feel used quickly.
  • Low resale price. This is what really determines depreciation; something is only worth as much as people will pay for it.

Why rent an RV?

Renting an RV may be a great option to only pay for an RV when you use it, rather than buying it and using it occasionally or buying it only to find out it doesn’t suit your needs.

Cost-efficiency
RVs typically cost a pretty penny. The average price of a towable RV is around $35,000 with motor homes running around $100,000, according to Kevin Broom, spokesperson for the RV Industry Association. And besides the sticker price, you’ll have to pay for maintenance, insurance and, most likely, taxes and registration fees. So if you know you’ll only use an RV for a couple weeks out of the year, why pay to have an RV for the whole year or multiple years? Rather than committing to thousands of dollars, you’ll probably commit a few hundred by renting an RV.

Experimentation
There are dozens of RV types and brands, along with tons of layouts and styles. If you are new to the RV lifestyle and don’t know if you’d rather drive or tow one, how much room you need for your family, how well you can handle driving a large or small one or you just want to experiment with a new model, renting may be a smart option so you can figure out what you like before you consider buying one.

What’s the cheapest way to rent an RV?

The absolute cheapest way to rent an RV is to do a relocation rental, which is when an RV rental company needs to transfer inventory and rather than pay a professional driver, they are willing to rent it out for close to dirt-cheap so you could drive it to the new location for them.

What are the pros of RV relocation rentals?
You could net some serious savings doing an RV relocation rental rather than doing a regular RV rental.

  • Price. While a price around $120 a night is normal for typical RV renting, RV relocation rental prices trend at $1 a night.
  • Fuel allowance. Some relocation deals have a $100 fuel allowance to offset what you spend on gas or diesel.
  • Popular sites. The RV rental company is probably transferring inventory to a popular location, which may mean that your route has some noteworthy vistas and stops along the way or at the destination itself.

What are the cons of RV relocation rentals?
There’s no such thing as a free lunch, so the saying goes. The cheapest way to rent an RV does have its downsides.

  • One-way trips. Unless you find a second RV relocation deal that lets you go back the way you came within the window of time that you’ll be at the drop-off point, you’ll need to find your own way home.
  • Additional costs. You will probably have to pay out of pocket for things like transportation to and from the RV pickup and drop-off sites, as well as extra mileage fees, campsite fees, extra insurance and add-ons such as linen kits.
  • Short notice. Many of the best deals are only posted a few days ahead of when you would need to take your RV vacation, which could make it harder to plan.
  • Limited time. Of course, the RV needs to reach its destination in time. Depending on the deal you choose, you may or may not have any extra days built into the time in which you have to transfer the RV.

What are other RV rental considerations?

Where could I find an RV rental service?
RV rental companies that offer both regular RV rentals and relocation RV rental deals include Imoova, Apollo, Jucy, Road Bear and Cruise America. You could also check out peer-to-peer sites, such as RVshare, where private owners rent out their rigs. Kampgrounds of America, the world’s largest system of public campgrounds, offers a directory of RV rentals by state.

When should I look for an RV rental?
The most popular time for RV rentals is in the summer. If you are considering a traditional RV rental, that’s when prices will probably be at their highest due to demand. If you are considering doing an RV relocation rental, that’s probably when there will be the most opportunities.

What should I consider when renting an RV?
Whether you do a relocation rental or not, here are some things you should think about when selecting an RV to rent.

Size. Depending on how many people are traveling with you, you may only need an RV that can sleep two or an RV that can sleep six.
Drivers. How many people will drive the RV? Will a couple of drivers take turns? If more than one person will drive, there may be an extra fee. And some RV rental companies require that all drivers be above 21 or 25 years old.
Pets. Check to see if you are allowed to bring your pet along with you on your RV trip. If you are allowed, an extra cleaning fee may apply for any mess caused by the pet. If not, you may need to find a pet boarding service or a pet sitter while you are away.
Campsites. Do you want to pay to use an RV campsite that could offer full hookups and Wi-Fi or will you boondock and depend solely on the RV’s resources like the water reservoir and electrical generator? If you want to boondock, you need to make sure the RV you select is capable of it. If you plan to stay at an RV campsite or park, you’ll probably want to make reservations ahead of time.
Add-ons. Will you bring your own things from cookware and sheets and towels to RV-friendly toilet paper, or will you need to pay for them as add-ons to your rental?

Is a long-term or short-term RV rental better?
The more time you spend in an RV, the more it’s going to cost, of course. RV rental companies and campsites typically charge per day. But the answer to this really depends on your budget and where you want to go. If you have never used an RV before, we would suggest a shorter trip of a few days before you sign on and spend the money to use an RV for a few months.

What’s the cheapest way to buy an RV?

If you think RV ownership is a better bet, but still aren’t ready to commit to a big sticker price, the cheapest way to buy an RV is to buy used. And if you need an RV loan, you should shop around for the loan, just as would shop around for the RV. Potential lenders could include your bank, credit union or online lender. It does not hurt your credit to apply to multiple lenders for a loan any more than it would to apply to one, as long as you do so within a 14-day window.

The bottom line

Leasing an RV is not an option, but there are plenty of ways to rent one. The cheapest way to rent an RV is to sign up for a relocation rental as daily fees are extremely low and possible added incentives like fuel reimbursement. When choosing an RV rental, keep in mind of additional costs, such as transportation to and from the RV pickup and drop-off sites. If you’re ready to buy an RV, do your research and shop around for an RV loan so you get the best deal.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Auto Loan, Reviews

The Best Auto Loans: 2020 New & Used Car Loan Rates

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Just because cars are getting more expensive, it doesn’t mean your car loan has to break the bank. Car debt and car payments have been hitting new highs recently, so it’s more important than ever that you do your research for the best rate. To that end, we researched the best auto loans of 2020, whether you’re purchasing or refinancing, or if you’re a credit union loyalist or an online-only type of shopper.

Monthly payments for a $10,000 loan at 3.49% APR with a term of 3 years would result in 36 monthly payments of $292.98.

Overview of the best auto loans in 2020

Company

APR Range

Term

Amounts

Best for Comparison Shopping

No. 1

LendingTree

As low as 3.99%

24 - 84

$5,000 - $300,000

SEE OFFERS Secured

on LendingTree’s secure website

LendingTree is our parent company

Best Purchase

Top Credit

LightStream

3.49% - 10.84%*

24 - 84*

$5,000 - $100,000

APPLY NOW Secured

on Lightstream’s secure website

Fair Credit

Capital One

As low as 3.39%

36 - 84

$4,000 Minimum

SEE OFFERS Secured

on LendingTree’s secure website

Best Credit Union

No. 1

Penfed

2.49% - 17.99%

36 -84

$500 - $100,000

No. 2

Navy Federal CU

As low as 2.49%

12 - 96

$250 Minimum, No Maximum

Best Online-Only Lender

No. 1

Carvana Auto Loan

NA

12 - 72

Any vehicle on website

SEE OFFERS Secured

on LendingTree’s secure website

How we picked the best auto loan rates

Using information from LendingTree, we compiled auto loan data over a six-month period across 31 auto lenders. We analyzed new and used auto lending, as well as refinance loans, selecting lenders from among those that consumers chose most often and offered the lowest average APRs.

Start with LendingTree

LendingTree
APR

As low as
3.99%

Terms

24 To 84

months

Fees

Varies

SEE OFFERS Secured

on LendingTree’s secure website

LendingTree is our parent company

LendingTree is our parent company. LendingTree is unique in that they allow you to compare multiple, auto loan offers within minutes. Everything is done online. LendingTree is not a lender, but their service connects you with up to five offers from auto loan lenders based on your creditworthiness.

With LendingTree, you can fill out one short online form, and there are dozens of lenders ready to compete for your business. Upon completing the form, you can see real interest rates and approval information instantly. Some auto lenders will do a hard pull on your credit and this is common with auto lending. It’s important to remember, multiple hard pulls will only count as one pull, so the best strategy is to have all your hard pulls done at one time.

Best purchase for top credit: LightStream

LightStream
APR

3.49%
To
10.84%

Terms

24 To 84

months

Fees

No Origination Fee

APPLY NOW Secured

on Lightstream’s secure website

Advertiser Disclosure

*Your APR may differ based on loan purpose, amount, term, and your credit profile. Rate is quoted with AutoPay discount, which is only available when you select AutoPay prior to loan funding. Rates without AutoPay may be higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 3.49% APR with a term of 3 years would result in 36 monthly payments of $292.98.

LightStream is the online-only division of SunTrust Bank, which recently merged with BB&T. It offers auto loans for people with good to great credit (660-plus). It even has a Rate Beat Program in which LightStream will offer a rate 0.10 percentage points lower than the rate offered by a competing lender.

Its lowest rates assume you will enroll in AutoPay, which automatically deducts your monthly payment from your bank account or charges it to your credit card. Enrolling in AutoPay means a 0.50% APR discount; if you do not enroll in AutoPay when you accept the loan offer, your APR will increase by 0.50%.

Best purchase for fair credit: Capital One

Capital One
APR

3.39%
To
11.25%

Terms

36 To 84

months

Fees

No Origination Fee

SEE OFFERS Secured

on LendingTree’s secure website

Capital One is one of the largest banks in the U.S., and offers rates competitive with other large lenders. It has several hundred branch locations and works with more than 12,000 dealerships. It also offers pre-qualification with the Capital One Auto Navigator, which can help you to find a car and get approved for a car loan before going to a dealer.

However, it may offer a relatively low maximum amount you could borrow, up to $40,000 in the past ( spokesperson recently declined to provide a maximum). Other lenders offer up to $100,000 auto loans.

Best credit union auto loan: PenFed Credit Union

PenFed Credit Union
APR

3.99%
To
17.99%

Terms

49 To 60

months

Fees

No Origination Fee

PenFed Credit Union can offer its membership some of the lowest rates available on new and used auto financing and refinancing. Qualified borrowers may be able to finance up to 110% of the vehicle’s value.

However, because PenFed is a credit union, you must be a member before accepting a loan. But wile the credit union has historical ties to the U.S. military, the only requirement to become a member is to have a valid Social Security number or a Tax Identification Number (TIN).

Runner-up for best credit union auto loan: Navy Federal Credit Union

Navy Federal Credit Union
APR

2.49%
To
17.99%

Terms

12 To 96

months

Fees

No Origination Fee

Navy Federal Credit Union also has some of the lowest auto loan rates available. Its prices for auto loan add-ons, such as GAP insurance, are also very low. However, you will have to have ties to the U.S. military to join Navy Federal.

Best online-only lender: Carvana

Carvana
APR

3.00%
To
6.00%

Terms

12 To 72

months

Fees

No Origination Fee

SEE OFFERS Secured

on LendingTree’s secure website

Carvana may be enticing for people who want to do the entire car-buying process online. It offers used cars as well as financing for those cars, but only those cars — you could not finance a car you bought from another seller with Carvana.

The average APR in the six-month period we examined was nearly 12%, higher than the average 9.6% for used vehicles, but Carvana financing may be a possibility for those with fair credit. Its auto loan calculator lists “below average” credit scores of 588, but it doesn’t have a credit score option lower than that.

Understanding the auto loan process

Most people apply for an auto loan through a dealership after they’ve picked out a vehicle, but there’s a smarter way to go. Dealers tend to make more money setting up auto loans than selling cars. Here are some tips to help you keep your money in your account by obtaining your own auto loan.

Tips when shopping for a car loan

Know what you can afford. You’re going to pay more for a car than what’s on the car’s price sticker. Government taxes, dealership fees and auto insurance can have a sizable impact on what you pay. MagnifyMoney suggests following a 50/30/20 rule when setting your budget.

Don’t let the dealer be the middleman. Dealers often raise customer auto loan APRs for their own profit. One of the best things to do is to apply to a few lenders directly, without the dealership being in the middle, so you know what APR you deserve.

Apply to a few lenders. It does not hurt your credit to apply to several auto lenders any more than it does to apply to one, as long as you do all applications within a 14-day window. You are not obligated to accept any of the loan offers you get and most are good for at least 30 days.

Consider a cosigner. If your credit score or income is low, a cosigner could make a big difference on your being approved for an auto loan and in getting a good auto loan offer.

Get a preapproval. This way, if you know you qualify for a 4% APR auto loan, you’re not likely to accept a dealership offer of a 7% APR auto loan. And if you have a preapproved auto loan when you walk into the dealership, you could even ask the dealer to beat the rate you got.

Finalize the loan offer. Once you choose a car, contact the lender with the car’s information to finalize the loan offer. And if it suits you, follow the lender’s directions regarding how to sign off on the loan.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Advertiser Disclosure

Auto Loan

How to Pay Off Your Car Loan Faster: Here’s What to Consider in 2020

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

iStock

There are several ways to pay off your car loan faster, several of them without shelling out an extra dime. Auto debt not only accounts for about 9% of all consumer debt in the U.S., it’s growing: monthly payments are larger, terms are longer and APRs are higher for new and used cars than they were five years ago. Paying off your car as fast as possible frees up that money for other things.

How to pay off your car loan faster without paying more

The faster you pay off your car loan, the less you’ll pay in interest. But it may not always be possible to throw more money at your monthly payment. Here are some ways you may be able to pay off your car faster without paying additional money on the loan.

Refinance

This is the process of applying for a new auto loan to pay off your existing loan, hopefully with a better interest rate or term.

Pros. A refinance loan could help you pay your car off sooner and with a lower interest rate. Maybe your credit score has improved since your original auto loan — the best rates tend to go to those with the best credit. Average rates dropped at the end of 2019 with an average APR of 5.5% for a new car loan versus 6.0% at the same time in 2018.

Cons. Downsides should be few except for the time spent shopping for the best rate and any fees you might have to pay such as those to your state’s department of motor vehicles to transfer your car’s title to the new lender. These costs should be low, under $100.

Who it may be good for. An auto refinance loan may be a good option for you if:

  • You have a high interest rate and either your credit has improved since you signed for the auto loan or you’re not underwater on the auto loan, meaning you do not owe more on your car than it is worth.
  • If you do not face high penalties for paying off your current loan early.
  • You got the auto loan through a dealership, especially a “buy here, pay here” establishment. The average hidden interest rate added by dealers is 2.47% and “buy here, pay here” businesses are known for predatory lending practices.

How to do it. Call your lender to find out how much you owe and your APR. Refinance lenders usually ask for this information, so it’s good to have it on hand. Then you can look for the best auto refinance companies and find potential auto refinance offers.

LendingTree
APR

As low as
3.79%

Terms

24 To 84

months

Fees

Varies

SEE OFFERS Secured

on LendingTree’s secure website

LendingTree is our parent company

LendingTree is our parent company. LendingTree is unique in that they allow you to compare multiple, auto loan offers within minutes. Everything is done online. LendingTree is not a lender, but their service connects you with up to five offers from auto loan lenders based on your creditworthiness.

Cancel any add-ons

Common auto loan add-ons include GAP waivers, service contracts or extended warranties, tire and wheel warranties and more — you may have agreed to these when you bought your car without understanding the full cost. Canceling them will decrease how much you owe on your auto loan, allowing you to pay off your car loan faster.

Who it may be good for. Anyone who has add-ons may be able to cancel them. The less you owe, the less you pay.

How to do it. Check your car contract, call your lender or call the dealership to see if any add-ons are listed on your paperwork. If there are any, find out what they are and consider canceling them to get a prorated return. You may need to fill out some paperwork to officially cancel the add-ons, but a few hundred dollars may be worth it.

Special note. If your car has a history of needing repairs, take that into consideration before deciding to cancel an extended warranty. If you are underwater on your car loan, think carefully before you cancel GAP, which is made to protect upside-down borrowers.

Make payments every two weeks

Instead of paying once a month, take your existing car payment and split it in half. Paying every two weeks means your loan balance is continually decreasing, which has the effect of paying less interest over the course of the loan.

Why it can be good. This is a way to essentially make an extra payment without forking over extra money.

Who it can be good for. By doing this, you’re not paying any more than you normally would, but it has the effect of making an extra payment a year, so it may be especially good for someone on a tight budget.

How to do it. Check with the lender to be sure you won’t run into any prepayment penalties. If not, make a half payment every two weeks instead of one full payment each month. You could automate your checking account to send the payment, or give permission to the lender to automatically pull the payment.

How to pay off your car faster with the most bang for your buck

Have extra cash to put toward your auto loan? While the methods above are good, the fastest way to pay off your car is to increase the amount you’re spending. Almost all of these tips involve making extra payments to the principal, the amount you owe on the car not including interest. But first check with your lender that you will not be penalized or charged a fee for prepaying your loan.

Make extra payments to the principal

Why it can be good. Auto loans have simple interest, which means that for every dollar you put toward the principal, you pay exponentially less interest to the lender.

Who it can be good for. Anyone who has an auto loan from a lender who doesn’t penalize early payoff or payments to principal.

How to do it. Call the lender and ask how you can make extra payments to the principal only. You should do this because extra payments not to the principal means you’re paying interest — all you’re doing is giving the bank money early. If you make payments to the principal, you’re not paying as much in interest, which is very good.

Round up

If you find it difficult to save money or you don’t have quite enough cash to make a whole extra payment, check out this round-up method.

Why it can be good. You could pay off your auto loan early without changing how often you make your payments.

Who it can be good for. If you have a hard time saving money, this is a good way to do so.

How to do it. If the lender will not charge a prepayment penalty, you have nothing to lose by doing this and you can do it in two ways:

  • Simply round up your monthly payment. For example, if your monthly payment is $350, round up and pay an even $400.
  • Use an app, such as Acorns, to round up what you pay on all of your purchases to the nearest dollar and then pay that money to the auto loan. For example, if you got gas for $15.30, the app would round the charge up to $16 and $0.70 could go into your savings account. A little goes a long way and by the end of the month, you may have $50 you could put toward your auto loan.

Avalanche versus snowball

We’re not talking about the weather; these are two popular methods used to pay off debts faster. The avalanche method prioritizes paying off high-interest debt first. The snowball method involves paying off your debts starting with the lowest amounts. You can read about more debt payoff methods here.

Why it can be good. These are methods that could help you pay off all your debts, not just your car loan.

Who it can be good for. If you have multiple loans or debts, these methods may help you organize them and pay them off.

Snowball method: how to do it. This is a three-step pattern that should allow you to “snowball” your money to pay off your car loan faster.

  1. Look at your loans and rank them from lowest to highest.
  2. Then focus on that smallest loan, paying it off as quickly as you can with any extra cash available while making minimum payments on your other debt.
  3. Once it’s paid off, congratulations! You no longer have that payment to make. Choose another loan and repeat the process, using the money you would have paid on the loan you paid off.

Avalanche method: how to do it. This method prioritizes debt with the highest APR. For example, if you’re paying a higher interest rate on credit card debt than your car loan, you may be better off using any extra cash to pay that down first.

  1. Look at your loans and rank them from highest APR to lowest.
  2. Determine how much extra cash you can put toward the debt with the highest interest while making minimum payments on your other debt.
  3. Once it’s paid off, roll the money you were using to pay down that debt into the next one.

Windfalls

Regular extra payments may not always be realistic for your budget, but if you get any money outside of your budget that you didn’t count on, using that money as one-time extra payment toward the principal could really help.

Why it can be good. Any “windfalls” you have, such as a tax return, a refund, a bonus, a big tip or a pay raise, can be put toward the principal on your auto loan.

Who it can be good for. If you were not counting on the windfall, the extra money you got is just that — extra money. By using it as a payment to principal on your auto loan, you’ll save more money because the less you owe, the less interest you’ll pay.

How to do it. It might take some self-control, but use the windfall cash to pay the auto loan. The sooner you’ll pay it off, the more money you’ll have later to spend on things you’ll enjoy.

Make extra income

If your regular paycheck isn’t able to stretch any further, consider a side hustle and put the earnings toward your auto loan.

Why it can be good. A part-time job a few hours a week could add up to enough cash to make a significant dent in what you owe.

Who it can be good for. Anyone with some extra free time may be able to find a part-time job, temp work, freelance assignment or other gig.

How to do it. Depending on what you’re willing and able to do, you could sign up at a temporary work agency, look on job sites and/or talk to people you know about any job opportunities. Just remember to spend the money you make on paying off the principal of the auto loan. You can check out 15 legitimate places that will pay you to work from home and 5 ways to make extra money that don’t take much time.

Remove extra expenses

What are you willing to cut out of your budget or give up to pay off your car loan faster? Again, every bit helps, if the extra cash goes toward the principal of your auto loan.

Why it can be good. If you aren’t willing or able to make more income, spending less can be an equally good option and, as a bonus, you can keep doing it even after your car is paid off and save the money.

Who it can be good for. Practically anyone could do this.

How to do it. Take a look at your credit card statement or write down what you buy so you can see your spending habits in black and white. Then, decide what you could cut out or possibly get a better deal on — it might add up to more than you think. Maybe you could eat out once a week instead of every day. Maybe you could find cheaper auto insurance. Then apply that savings to your auto loan principal.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.