When you finance your purchase instead of liquidating assets or paying cash, you maintain your personal financial flexibility. Plus, your RV may qualify for some of the same tax benefits as a second home mortgage. Of course, check with your tax advisor, but basically to qualify for these benefits, such as the deductibility of interest on the loan, the RV must be used as security for the loan along with providing basic living accommodations such as a sleeping area, bathroom and cooking facilities. Remember, the RV is considered a qualified second residence as long as you designate it for each tax year.
HOW DOES RV FINANCING COMPARE WITH OTHER PAYMENT OPTIONS?
Borrowing against an owned home is not an option unless the money is used directly for that home. Home mortgage interest deduction is restricted to interest paid on mortgage debt used to purchase or improve a residence, or to refinance the remaining balance on a purchase or improvement. The purchase of an RV, therefore, does not qualify for this deduction. Home equity loans limit the amount of interest that is deductible, if your RV loan balance exceeds $100,000. Home mortgage interest deduction is limited to interest paid on home equity loans up to $100,000.
Don't Become A Warranty Orphan
Before you purchase an RV from an internet retailer or from a dealer that is not local, consider who will provide warranty service?
UNLIKE AUTO DEALERSHIPS, RV STORES ARE NOT FRANCHISED.
RV centers are independently owned and not obligated to provide warranty service for a customer who has purchased out of the area.
Internet retailers as well as dealers that sell out of their business trade area (BTA) incorrectly inform customers that their local dealer has to perform warranty service. This simply is not true, and has created a new class of RV owners called u201cWarranty Orphansu201d.
Do not assume that your local dealer will provide warranty service because many will not.
You may have to pay an independent service center, out of pocket, to make warranty repairs to your RV. You will then have to seek reimbursement from the manufacturer. The difference between what an independent charges and what the manufacturer is willing to pay is often substantial. The price difference is paid by the customer.
If you choose to make a long distance purchase you will likely have to pay for it before you take delivery, even though your RV may not have been properly inspected, tested, or even cleaned. We know this first hand because customers that have purchased on the internet are calling us to do this work. After all, a non local dealer is counting on never seeing you or your RV back for service.
Customer orientation is a key part of the delivery process. It is important that you understand how to operate all the equipment and appliances and that every feature is explained in detail so that you have a thorough knowledge of all systems. If your RV is towed, it is extremely important that you have the correct hitch and that the load leveling, sway control, and electric brakes are properly installed and adjusted for safe operation. The typical orientation and hitch set up takes two hours.