If you're eager to hit the road with a new camper but are concerned about credit checks or hefty down payments, buy here, pay here (BHPH) camper programs might be a viable solution.
Unlike traditional RV loans that require bank involvement, BHPH allows dealerships to manage loans directly, often offering more flexible approval criteria and reduced initial costs. However, understanding the nuances of these programs is crucial to making an informed decision. This guide will explore BHPH financing, compare it with other options, and help you evaluate whether it's the right choice for your needs.
What is Buy Here, Pay Here Camper Financing?
In a typical RV loan scenario, you would apply through a bank or credit union, which, upon approval, would fund your purchase. You'd then make monthly payments to this lender. BHPH financing, however, positions the dealership as both the seller and financier. This means you "buy here" and "pay here," directly to the dealership. Payments can often be made online or in person.
The primary advantage of BHPH is its flexibility with credit requirements. Dealerships are more likely to approve buyers with less-than-perfect credit, but this convenience comes with trade-offs such as higher interest rates and shorter loan terms than those found with prime RV loans.
Additionally, BHPH lots tend to offer older, used travel trailers or motorhomes, so thorough inspections are essential.
Comparing Camper Financing Options
Understanding how BHPH compares to traditional financing options can help you determine the best fit for your circumstances. Below, we outline several alternatives:
| Financing Option |
Key Features |
| Bank or Credit Union RV Loans |
Lower APRs and longer terms; requires stronger credit and larger down payments; pre-qualification available. |
| Dealer-Arranged Financing |
Convenient with multiple lender offers; potential for promotional rates; may include markups. |
| Specialized RV Loan Brokers |
Connects with lenders focusing on RVs; options for fair or challenged credit; not a BHPH style. |
| Personal Loans and Credit Cards |
Quick funding; higher APRs and shorter terms; best for minor expenses. |
Pros and Cons of Buy Here, Pay Here Financing
Before opting for BHPH, weigh its benefits against potential drawbacks:
- **Faster Approvals**: You might get approved the same day, which is beneficial during peak buying seasons.
- **Lower Up-Front Costs**: Smaller down payments and fewer bank fees reduce initial expenses.
- **Credit Flexibility**: Easier approval for those with limited or poor credit histories.
- **Simplified Process**: A one-stop shop for choosing a unit, financing, and handling paperwork.
However, there are notable disadvantages:
- **Higher APRs**: Expect interest rates higher than those of prime RV loans, leading to increased total costs.
- **Shorter Loan Terms**: Short repayment periods can result in higher monthly payments.
- **Limited Selection**: Inventory often consists of older, high-mileage campers.
- **Potential Tracking Devices**: Some dealers install GPS or starter-interrupt devices; always confirm details in writing.
When Buy Here, Pay Here Makes Sense
BHPH financing may be suitable if you need a camper urgently for work, travel, or family outings, especially if you lack savings for a substantial down payment or are rebuilding your credit. However, it might not be ideal if you qualify for a significantly lower APR through a bank or credit union, can wait for funding, or are interested in newer, more expensive models.
How to Choose the Right Camper Financing
To ensure you're choosing the best financing option, consider these steps:
1. **Know Your Credit and Budget**: Check your credit reports at
AnnualCreditReport.com and use tools like the Bankrate RV loan calculator to determine affordable payments. Ideally, your RV expenses (loan, insurance, storage) should not exceed 10–15% of your take-home pay.
2. **Compare Total Costs**: Don't focus only on monthly payments. Review the APR, loan term, amount financed, and fees. For example, a $18,000 travel trailer financed over 60 months at 10% APR costs about $4,900 in interest, while a 22% APR (common in BHPH deals) would amount to approximately $11,300 in interest.
3. **Inspect Thoroughly**: Older campers might have hidden issues. Check for soft floors, roof leaks, delamination, tire conditions, and appliance functionality. An independent inspection can be worthwhile.
4. **Scrutinize Contracts**: Understand any prepayment penalties, refinancing options, credit bureau reporting, and potential for GPS devices. Verify insurance requirements and consider getting quotes from providers like Progressive RV Insurance.
5. **Explore Alternatives**: Even if leaning towards BHPH, apply to a credit union or specialized RV lender to compare offers. You may find an option that saves you thousands over the loan's life.
Speeding Up Delivery with BHPH
One of the main draws of BHPH is its speed. Since approvals are handled in-house, you could move from a test drive to ownership within hours. Dealers might also incorporate taxes, titles, and some add-ons into the loan, reducing initial cash requirements. This can be particularly advantageous during busy buying seasons when desirable models sell quickly.
Case Study: Making BHPH Work for You
Consider Maria, a travel nurse with a fair credit score of 620. She chose a 2014 bunkhouse trailer priced at $16,500. Her BHPH dealer approved her same day at 21.9% for 48 months with $1,000 down, resulting in about a $470 monthly payment. A local credit union later pre-approved her at 14.5% over 60 months with $2,500 down, which would have been around $380 per month. Maria opted for the BHPH route to start her contract job on schedule and later refinanced with the credit union, benefiting from on-time payments that lowered her rate.
Finding BHPH and Alternative Financing Options
BHPH RV programs vary by location and can change frequently. Always verify terms, inventory, and dealer reviews via the Better Business Bureau. Notable BHPH RV dealers include RV Depot in Cleburne, TX, which offers in-house financing on various used models.
For alternatives, consider:
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Camping World Financing for dealer-arranged loans.
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Good Sam Finance Center for RV-specific programs.
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My Financing USA for broker services connecting to multiple lenders.
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Southeast Financial for national RV loans.
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LightStream RV Loans for unsecured loans.
-
Navy Federal Credit Union for competitive rates on newer RVs.
Smart Shopping Checklist
To ensure a confident purchase, follow this checklist:
- Obtain at least two written offers, both BHPH and non-BHPH, on the same day.
- Bring proof of income, residence, and insurance to expedite approval.
- Prefer dealers that report on-time payments to credit bureaus.
- Budget for taxes, registration, insurance, storage, and maintenance.
- Have a mechanic or inspector review any used camper before finalizing the purchase.
Conclusion
Buy here, pay here camper financing can be an effective way to get on the road quickly with minimal upfront costs. However, it's essential to weigh the convenience against higher interest rates and potentially older inventory. By comparing total costs, inspecting vehicles thoroughly, and obtaining alternative quotes, you can make an informed decision. Planning to refinance later can also help secure more favorable terms once your credit improves.