What you need to know about camper van finance and van loans
Whether you’re deep into the conversion planning process, or just getting started, one of the most important pieces to your van conversion project is paying for it.
Do you pay cash, or are there options to finance the conversion?
Can I finance as I go, or does the project need to be fully completed?
Do I get an RV loan or a normal vehicle loan?
In the past, custom van conversions had to be purchased outright and sometimes even upfront.
However, times have changed and there are other ways in acquiring a van as well as the conversion through financing. Many people are now bundling their conversion cost into the initial van loan, eliminating the need to pay everything for their campervan out of pocket. Below you can read about the process in-depth, but here’s a quick summary of how ADF can help streamline your experience.
- We work together on your van build and requirements then establish what van is best
- We source that van based on your specifications
- We finalize your conversion layout, details, and costs
- We coordinate all applicable parties for the final van purchase and financing
Sourcing Your Van
Tracking down the perfect van can be a daunting task. Working with your conversion company (ADF Sprinters) is an easy way to cut out most of the confusion. Experienced Upfitters know exactly what options are important and which are a waste of money based on your build and goals.
We work with customers and dealers from square one to ensure that everybody is on the same page with the overall project. Our extensive dealer network allows us to quickly and easily find the van you need within a day or two. If your dream van needs to be specially ordered, ADF Sprinters have a special direct ship code that sends newly built chassis’ straight to our shop, saving time, shipping costs, and a logistics headache. This code needs to be applied to the original order for the van.
Something to be mindful of is the current Sprinter 4×4 Drought.
Van Specifications to Choose Between –
- Cargo, Crew or Passenger van
- Wheels Base (144” or 170”)
- Height (Standard or High Roof)
- 2WD or 4WD
- 4cyl Diesel, 6cyl Diesel, or 4cyl Gasoline
- Exterior Color and Interior Upholstery
Options for Bundling The Conversion with The Van
The least straightforward part of financing your custom camper van includes the decisions you will make for how to lump the financials together. While we always recommend speaking with a CPA or tax professional for the best financial advice, here are a few different methods to approach the numbers.
Lumping the conversion cost into the initial loan for the van through Mercedes-Benz financial
You just saw a promising advertisement stating your new Mercedes can be had for 2.99% APR financing and you’re ready to take advantage of that great deal! I don’t blame you, but pump the brakes for a second and let’s lay out how that program works and what may be a deal-breaker.
To start, in order to lump up fit costs into a Mercedes-Benz loan, the upfitter must be a Mercedes-Benz approved Master Upfitter. From here, a loan from Mercedes-Benz Financial will only qualify for special vehicle financing terms and rates (that 2.99% deal you saw online) if the financed amount stays below $80,000.
Most conversion projects will breeze past that before the insulation even goes in. Anything north of the $80,000 number will need to come straight from your wallet. Not to worry though, as you can still grab a standard vehicle loan through the same dealership.
The standard vehicle loan has a more realistic rule of thumb for most buyers. Expect your down payment total to be around 50% of the upfit cost. For example, the van costs $60,000 and the upfit also costs $60,000 for a total cost of $120,000. Fifty percent of the upfit cost will land your down payment at $30,000. If you bump the conversion costs of that same $60,000 van to $100,000, prepare for a $50,000 down payment.
Standard vehicle loans from Mercedes-Benz will range in term from 24-72 months, with APR’s (during the time this article was written) ranging from 4.9% to 10%. The exact APR, loan term, and down payment you qualify for depending on your credit.
Keep in mind that loan officers want to see relevant credit on your report. What that means is somebody with a 700 credit score who has financed a few comparable autos in their past, and never missed a monthly payment, may qualify for better terms and rates than somebody with 800 credit purchasing their first car. The difference here can be so drastic that the first buyer mentioned may qualify for 100% of the cost + upfit to be covered, while the other will need to prep for that 50% down payment.
Another important note is that Upfitters will often order a bulk of chassis to use for special projects. Sometimes these chassis will not qualify for the special rates noted at the beginning of this section so be sure to inquire with the Upfitter.
Financing a Conversion project with RV terms through Umpqua Bank
Umpqua bank has put together a unique loan package to help fund the entire conversion project. It’s a three-step process that covers everything from the initial vehicle purchase, buildout, and final long term RV loan. Here is the process, in layman’s terms:
- Umpqua issues a vehicle loan to purchase the vehicle itself
- Umpqua issues a personal line of credit to cover the cost of the upfit
- Once the van is finished, both the vehicle loan and personal line of credit are refinanced with the long-term RV loan.
Pre-approval for all of these steps will happen at one time. This offers buyers some peace of mind that they won’t make it to the finish line only to have the bread and butter 15-year loan they needed to make the entire project possible fall flat.
If you happen to be a loan buff or have extensive RV Financing experience, you will immediately see that this program is incredibly unique because it is able to accurately value the asset with no exact comparable vehicles. Expect this RV loan through Umpqua to cover up to 90% of the total investment. This means you’re going to be out of pocket at least $15,000 towards your $150,000 campervan upfront.
Currently, borrowers must live in Oregon, Washington, California, Idaho, or Nevada in order to work with Umpqua Bank. Pending personal credit, expect to see APR’s between 6% and 15% for loan terms up to 15 years.
Alternative financing options
Above are the more popular options for financing your van conversion dream. These are just a few options in the sea of opportunities to source funding. We won’t go into the same detail, but below is a list of other options to consider when financing your van conversion project:
- Home Equity Line of Credit (HELOC).
- If you own a home and want to leverage it as an asset, this is an easy way to get a decent chunk of change for a low rate. You would simply yank funds from your HELOC account and pay cash for the van and conversion. Just be careful as many HELOC loans are variable rates, which might jump up on you without much notice. Inquire with your personal bank for more information.
- Home refinance
- This will take the most work, but rates are still historically low. This will give you access to a larger lump sum (depending on your home’s value) which you can use for the van conversion and maybe another project or two around the house. Inquire with your personal bank for more information.
- Outside lending source.
- There is a slew of new companies that focus on direct-to-consumer personal loans for different needs. These range from student loans, to vehicle loans. Companies like SoFi and Upstart offer these loans without going through your big brand bank.
FAQ’s About Van Conversion Financing
Is it hard to get financed for a van conversion?
No, in fact, it is quite easy and many of our clients have been doing this for years. Good credit with relevant previous purchases will make approval easier.
What are typical van conversion loan terms?
Auto Loans: 24-72 Months with APR’s between 4.99% and 9.99%
RV Loans: 4-180 Months with APR’s between 6% and 15%
What is the best way to finance a van conversion?
The best way is by working with us from the very beginning as it will consolidate the process. You will also want to work with a company that is considered a Master Upfitter.
What is a master upfitter program?
A Master Upfitter is experts that Mercedes-Benz has reviewed and approved to convert their vans. They want to ensure that these modifications are safe and in compliance with their very strict codes and guidelines. ADF has been part of this program for over 10 years and has continually met those high-quality standards.
What is a good credit for a van conversion loan?
To qualify for a campervan loan you will generally need to have a credit score above 690. You may be able to still qualify if you drop below that threshold, but it may require adding a co-signer to secure the loan. Ideal applicants will have financed similarly priced recreational vehicle in the past without issue.
How can I lower my interest rate?
There are several strategies you can employ to be approved for a lower interest rate, like providing a larger down payment. Improving your credit score can also help, as can decreasing your debt-to-income ratio. Comparing quotes from different lenders offers can also help you spot the best deal.
