OnPath Credit Union

Are There Differences Between Auto Loans, RV Loans and Loans for Motorcycles and ATVs?


The main difference between recreational vehicle loans and traditional auto loans are frequently the rates and terms. From an application and functionality standpoint, auto loans and other leisure vehicle loans are similar.

A vehicle like an RV or a boat might cost significantly more than a car. However, many borrowers don’t have the disposable income to afford a monthly payment that’s dramatically higher than their auto loan, so the terms on a boat or RV loan may be, by necessity, much longer.

Some lenders that offer RV loans even allow terms of up to 240 months, which is drastically longer than the average 72-month term for an auto loan.

Not every lender offers extra-long RV loans, and they’re not always necessary, especially for lower-cost pre-owned RVs or boats. Some offer more traditional loans in the range of 24 to 84 months, which is often ideal if a purchaser can afford a significant down payment. Total interest payments on a 72-month loan will be far lower than a 240-month loan.

Are Long Terms Always Bad?

Not necessarily. Consider boats, which frequently have much longer terms than vehicles. Cars depreciate quickly, which is one of the reasons shorter terms on auto loans make more sense. You might only keep your car for five years, so financing it with a 10-year loan likely isn’t feasible.

Boats, on the other hand, don’t depreciate at the same rate. A well-maintained boat can last several decades or longer. They also tend to have longer warranties that can impact the valuation equation.

Boat loans, like auto loans or mortgages, can also be refinanced. There’s no requirement that you must stick with the same rate and term for the life of the boat loan.

How Are Motorcycle Loans Different From Auto Loans?

In most respects motorcycle loans and auto loans are similar. Interest rates will be based on your credit score and choosing a longer term means you’ll pay less each month but pay more interest in the long run.

Since motorcycles are usually less expensive than cars, the loan limits are generally lower. Smaller loans also tend to be given lower interest rates. There are exceptions to most rules in finance, including this one, like in a scenario where you’re getting a motorcycle loan for a particularly high-end or luxury bike.

One process difference that motorcycle buyers frequently experience is the increased down payment due to a lack of a trade in. Many car shoppers are simply switching out their current car for a new car or a pre-owned vehicle. The trade-in value of their current car may constitute the down payment on their new vehicle. Many motorcycle buyers are not trading in an existing bike for a new one, which means they often need to come up with the down payment out of pocket.

Motorcycle purchasers might be considered credit risks if they already have an outstanding auto loan. If you are thinking about financing a motorcycle purchase, it may be in your best interest to finish paying off your car loan first.

What’s the Difference Between an Auto Loan and an ATV Loan?

From a technical standpoint there’s little difference between an ATV loan and an auto loan. However, many of the same considerations exist for ATV loans and motorcycle loans. They tend to cost less than traditional vehicles so the interest rates may be lower, and the terms might be shorter. You could be required to pay higher rates if you have multiple outstanding loans for other recreational vehicles or cars.

Like auto or motorcycle loans, ATV buyers tend to have a lot of financing options. You may be able to finance through the dealer, the manufacturer or your bank or credit union.

Financing a recreational vehicle through a credit union is often the preferred solution for members who want to make the most of their FCU benefits.

Are You Considering a Motorcycle, ATV, Jet Ski, Boat or RV Purchase in Louisiana?

Visit OnPath FCU’s rates page to see our current rates on recreational vehicle loans. Our auto loans, boat loans, motorcycle loans and jet ski loans include optional product accessories like payment protection, extended warranties and GAP insurance.

Learn more about the benefits of becoming an OnPath FCU member by calling us at 800.749.6193.