When looking to buy an RV, most people either pay for the RV in cash or finance a portion of the purchase price with a bank loan.
However, if you have a low credit score, don’t have enough cash on hand, or can’t get a loan from the bank, there is a third option — rent to own.
Although rent-to-own contracts give more people the opportunity to own an RV, they come with a higher price tag than bank financing.
This article looks at RV rent-to-own programs to help you determine if they are right for you.
Let's get started.
What's rent to own?
Rent to own typically helps people who might not qualify for bank financing to buy an RV.
Most RV loans require the buyer to have a down payment and a good credit score. On the other hand, rent-to-own RV loans only require proof of residence and income.
When you rent to own an RV, you and the RV dealership (or current RV owner) agree to apply part of your payment toward the principal and the other part toward the rental. At the end of the agreement, you will own the RV.
The pros and cons of rent to own
Not everyone can qualify for bank financing or pay cash for an RV. If you're ready to buy an RV, but your financial circumstances require alternate financing, then renting to own an RV might be for you.
Here are some of the advantages and disadvantages of a rent-to-own RV contract.
Pros
No credit check. Rent to own only requires the buyer to provide proof of identification, residence, and income. If you're struggling with bad credit or have recently filed for bankruptcy, you won't have to worry about a bank turning you away.
Little to no money down. Many rent-to-own agreements ask for little to no money down. Eager buyers who want to get their hands on an RV right away won't need to come up with a large down payment.
Older RVs. Banks typically don't finance older vehicles. If you have your eye on a vintage Boler or an older Airstream, then rent to own might be for you.
Motivated sellers. When RV dealers or private sellers need to make room for new inventory or make money quickly, they may look for rent-to-own contracts to help reach their goals faster.
Offset ownership costs. Companies like RVezy, a peer-to-peer RV rental platform, help RV owners make money renting out their RV when they're not using it. Renting your RV can help you recoup your costs and make money to pay off your investment sooner.
Cons
Higher cost to own. Since the RV owner acts as the bank, your money needs to cover both the rental fee and principal payment, which typically costs more over time than bank financing.
More frequent payments. Most rent-to-own contracts require you to pay weekly or bi-weekly. Depending on your financial circumstance, this may prove tricky.
Full maintenance and ownership costs. Many rent-to-own contracts require you to pay for all maintenance and repairs as if you purchased the RV outright. Also, since you're using the RV as if it were your own, you'll still have to pay for storage and insurance.
No credit reports. Rent-to-own contracts don't typically report your on-time payments to the bank. Since your lease doesn't require financing, the owner has no reason to contact the bank. A rent-to-own contract might not be for you if you're trying to re-establish credit.
No refunds. If you decide you don't want to buy the RV anymore, you'll forfeit the money you paid for the rental portion of the lease.
The cost of renting to own an RV
When you rent to own an RV, you will make your payment to the dealer or a private owner instead of paying a bank. Part of your payment will go toward the principal of the loan and the other toward the rent-to-own fees.
Rent-to-own contracts typically require the first and last month's payment up front and have terms lasting between 48 and 60 months.
Comparing payment methods
Want to know how much your payment will be each month if you choose a rent-to-own RV contact over bank financing? The examples below will show you how much you can expect to pay each month for two different price points. Since rent-to-own RV contracts are typically shorter than financing an RV through a bank, the terms for each type of payment range between 5 and 15 years.
Bank Financing
Sample 1
RV cost: $30,000
Cash needed for 20% down: $8,000
Interest rate: 7%
Terms: 15 years
Monthly payment: $197.74
Sample 2
RV cost: $75,000
Cash needed for 20% down: $15,000
Interest rate: 7%
Terms: 15 years
Monthly payment: $539.30
Rent to own
Sample 1
RV cost: $30,000
Rental payment: $350
Principal payment: $500
Terms: 5 years
Monthly payment: $850
Sample 2
RV cost: $75,000
Rental payment: $500
Principal payment: $1,250
Terms: 5 years
Monthly payment: $1,750
Extra costs
As with traditional RV financing, you'll still have to pay tax, registration, and licensing fees when you rent to own an RV. In addition, you will have to pay for insurance, storage, maintenance, and other costs associated with RV ownership.
Want to know more about the different costs associated with RV ownership? We give you a detailed breakdown in "How much does it cost to own an RV?"
Even though you'll be responsible for the cost of ownership, it doesn't hurt to ask if the owner offers maintenance packages, roadside assistance, or has a place to store your RV. Motivated owners might add in something that will benefit both of you.
What to look for in a rent-to-own RV lease
If you think a rent-to-own RV is right for you, here are a few items you'll want to be aware of before you commit to the terms:
- The full payout price of the RV.
- Required deposits or late fees.
- The monthly payment amount and due date of each payment.
- The length of the contract.
- How much of each payment goes toward the principal.
- Penalties or rewards for early payoff.
- Penalties for defaulting on your payment.
- The minimum coverage needed for insurance.
- Any included extras, like maintenance or storage.
Frequently asked questions
Can I finance an RV with bad credit?
Financing an RV with bad credit can be challenging. If you’re worried that bad credit may make it impossible to finance an RV, renting to own may be an option.
Can you rent to own an RV with no down payment?
Most rent-to-own contracts require buyers to pay the first and last month's payments before taking the RV off the lot.
Can I pay monthly for an RV?
Yes! The whole point of rent to own is that you have monthly payments where part of your payment will go toward the total purchase price, and part of the payment will cover rental fees.
Is it cheaper to rent an RV or buy one?
A rent-to-own deal has many perks, but it’s cheaper to buy or finance an RV.
How do I find a rent-to-own RV?
Check out local RV dealerships or look for a private seller through RVezy's marketplace, Craigslist, Kijiji, Facebook Marketplace, or RV Trader.
Final thoughts
Renting to own an RV is an option for people who don't qualify for traditional bank financing.
While a rent-to-own RV will get you on the road quickly, it may not be the best choice financially because the cost to own an RV is significantly less than renting-to-own an RV.
If you can't wait to try out the RV lifestyle, consider renting an RV on RVezy. You can have the same types of experiences renting an RV that you can have when you own an RV. Plus, renting an RV gives you time to try out the different RV types and research which RV will suit you and your situation best.
