'Rent to Own RV': Here Are the Pros and Cons

There are two main ways to own an RV. You can buy it outright with hard cash or put a down payment and get a bank to finance the rest of the amount. Many prospective RVers aren’t aware of another option: renting to own an RV. While we have not had a rent-to-own RV, we know people who have, and they have mixed reviews.

Find out what a “rent-to-own RV” means, and learn the pros and cons of this RV ownership model.

What Is a ‘Rent to Own’ RV?

Also known as lease-to-own contracts, rent-to-own an RV are agreements that help potential RVers who might not qualify for traditional bank financing. The party leasing the RV calculates the entire value of the RV into the lease agreement, plus a rental fee for that period. A part of the monthly payment goes toward the purchase, while the other portion goes toward the rent.

If you fulfill the terms of the agreement and complete your payments, the RV will belong to you at the end of the lease period. Many RV dealerships offer this financing option, as well as private parties on platforms such as Craigslist, RV Trader, or Facebook Marketplace.

Basically, this option reduces the hurdles buyers must overcome before they qualify for a travel trailer, fifth wheel, or motorhome purchase. Many times, you don’t need a credit check or a significant down payment.

What Is Required of the Buyer?

While many RV dealerships or private owners do not require a credit check, they may ask you to provide information on income, references, proof of residence, as well as your Social Security number. A decent credit score can, however, help you negotiate a better deal. Once the lessor is satisfied, it will them move on to negotiating the time, money, payment options, and payment schedules.

Generally, you’ll make payments on a weekly or monthly basis. Depending on the agreement you sign, you may have the choice to terminate the contract at any time. It’s always a good idea to read the agreement thoroughly before signing the dotted lines to be sure of what you’re getting into.

What’s In It for The Dealer or Private Seller?

Wondering how these programs make sense to the parties that rent out? The idea is pretty simple: RV dealers get to sell slow-moving inventory and increase cash flow. Dealerships offering rent to own options are able to target people who otherwise wouldn’t be approved through traditional financing methods. For private parties, this option allows them to sell their camper and have a steady monthly income for a few years.

Check Out: 9 Tips for Picking the Best Family RV

Pros of a ‘Rent to Own’ RV

The rent-to-own RV model has plenty of benefits. Here are the top advantages.

Eliminates the Hassles of Dealing with a Bank

One of the biggest advantages of renting to own a camper is that the dealer or RV owner finances the purchase directly, meaning you don’t have to deal with stubborn financial institutions. Banks have tough lending standards that create obstacles.

Fewer Upfront Costs Compared to Traditional Financing Options

Traditional lenders, such as banks, credit unions, and other financial institutions will require you to put down a large down payment to qualify for financing. On the other hand, many rent-to-own contracts require little to no down payment, making it easier for you to afford the purchase.

You Can Qualify for a Rent To Own RV Even With Bad Credit

Prospective RV owners with a stable income, but with a bad credit score aren’t locked out of this option. This model allows you to get an RV and live the life you have always desired without being discriminated against because of your past or current financial situation. Bank credit requirements are usually very tough, locking out many people.

You Can Negotiate Flexible Terms

Another big perk of rent-to-own RVs is that the dealer or owner is usually eager to get the camper off their hands, so they are more willing to negotiate. You can both work out the fine details and find a solution that won’t be a burden to you. You can negotiate monthly payments, the terms and conditions, and even the overall price. When it comes to banks, there is very little wiggle room to create an agreement that favors you.

You Can Buy RVs That Banks May Not Finance

Let’s say you’ve found a used RV that’s in meticulous shape, has low miles, and has a fantastic and accurate maintenance record. If that RV is older than 15 years, banks will refuse to finance you because of its age. A rent-to-own model allows you to get your hands on such older campers or even vintage rigs that you want to restore. You can even suggest the lease-to-rent scenario to the buyer if they haven’t considered it.

You Can Pay a Rent To Own RV Off Early without Penalties

One more pro of rent-to-own campers is that you can finish paying off the RV loan earlier than agreed without risking penalties or being constrained by the contract. Traditional lending channels make money through interest, so they are less enthusiastic when you pay the loan early. An RV dealership that wants to move inventory or an owner who badly needs cash may welcome an early payment.

No Interest

A good number of dealers don’t charge any interest for the RV. The monthly payment is split in two. One portion goes towards the purchase, while the other foots the rental fees, so you can continue using the rig before you own it. Still, some people consider the rental fee to be the interest. It depends on how you see it.

Cons of a ‘Rent to Own’ RV

Leasing to own a camper has its own drawbacks. Here are some cons of this ownership model.

You May Pay More than the RV is Worth

A rent-to-pay model is more expensive than traditional financing in the long run. The rental fees will hike up the price of the RV, making you pay more than the camper is worth. However, the earlier you pay off the loan, the less you will spend on the rental portion. So, you can avoid overpaying by signing a short-term contract. If you can’t afford to pay it fast, calculate the total amount it will cost you and compare that number with the current value of the RV to see whether it makes sense.

Depreciation

Another major problem with renting an RV to gain ownership is that the camper’s value will have depreciated considerably by the time it’s officially yours. Generally, new RVs lose around 30% of their value within the first four years. So, if the model is already a few years old when you make the purchase, it will have lost significant value when you’re done paying.

You May Be Responsible For Maintenance And Repairs

In most rent-to-own contracts, renters are responsible for any repairs and maintenance. If your newly leased camper breaks down and a costly repair or replacement is needed, you’ll be the one to foot the bill even if you don’t yet own the rig. This isn’t ideal, so negotiate this part of the agreement to make it fair for both of you.

The Agreement Created By the RV Owner May Not Be Legally Binding

RV owners often offer the most enticing rent-to-lease contracts. However, the contract the owner creates may not be legal if they have no experience creating one. Make sure every important detail is included to prevent disputes in case something not mentioned in the agreement goes wrong. After you both negotiate, have a formal contract drafted by an attorney. Also, ask for documents to confirm that the RV belongs to the person you’re dealing with.

Scammers

Unfortunately, there are plenty of characters who prey on people who want to own RV rentals through this arrangement. Most of them take advantage of the fact that very few people read between the lines of contracts. So, they plant some tricky wording in the document. Some have super high-interest rates, while others offer payment plans that are designed to make life difficult for you so you can quit and forfeit the amount you paid for the rental portion of the lease.

Points to Negotiate to Get a Good Deal

If you’ve decided to own an RV through a rent-to-own contract, there are a few points you need to negotiate to get a favorable deal. They include:

The length of the contract period, such as a three, four, or five-year payment plan
The full payout price for the RV
Monthly or weekly payment amount
Payment due date
The percentage that goes toward the purchase and the one that goes towards the rental fee
Who is responsible for service and repairs or how to share those costs
Who will pay for insurance
Whether you’re allowed to pay off the entire amount without incurring a penalty fee
How long you can delay payments before you’re penalized, and the penalties if that period elapses
If it’s possible for you to terminate the contact, and how much of the paid purchase amount will be refunded
You options if the leaser or buyer passes away before the contract is completed

Should You Rent to Own an RV?

Whether a rent-to-own RV is a good option heavily depends on the travel lifestyle you envision. If you plan to travel often or adopt a full-time RV lifestyle, it could be a smart option. If you’ll only use the camper a few times a year, you are better off renting an RV from a renting service, like Outdoorsy or RVShare.

Of course, a rent-to-own arrangement makes lots of sense for prospective RVers who are determined to get a camper even if they can’t qualify for bank financing. Before you commit to a lease-to-purchase deal, rent a few trailer or motorhome rentals on a short-term basis to give you an idea of what type of RV best suits your needs.

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Cynthia Measom

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Cynthia Measom is the founder and main content creator of RV Top Tips. Not just a writer, she’s a dedicated RV owner and enthusiast, alongside her husband, Joe, who is an experienced RV tech. With their joint knowledge, the two are up on the latest trends and technologies in the RV industry, as well as practical camping and lifestyle tips.

The couple own a 2020 Coachmen Chaparral fifth-wheel that they absolutely love. Their secret to being so satisfied? They purchased the model after a solid year of researching different fifth-wheel campers in person and online to find the perfect fit for their family of three.

‘Rent to Own RV’: Here Are the Pros and Cons