It’s no secret that living in a van may save you a lot of money.
There is no rent. There is no mortgage. There are no property taxes. However, before you can begin saving money, you’ll need to devise a strategy for financing and maybe renovating your new mobile home. This may entail paying the charges in full up front or financing your van.
So you’ve chosen to abandon the status quo and embark on a van life adventure. You’ve even made a Pinterest board to organize your favorite decorating ideas. Perhaps you’ve conducted research on vans to determine which one would be the best fit for your needs. All of these parts of planning for vanlife are quite exciting, but before you get started, you’ll need to figure out how you’re going to finance this new way of life. Certain vans or van builds are reasonably priced, while others are a little more lavish. Whatever your style, there are numerous options to finance your dream house on wheels. Here are three of those possibilities.
What you need to know about financing a conversion van
Whether you’re well into the conversion planning process or just getting started, financing your van conversion project is a critical component. Are you paying cash for the conversion or are there financing options? Can I finance the project as it progresses, or must it be completed completely? Do I qualify for an RV loan or a conventional vehicle loan? These are all critical questions that will influence what you purchase and the scope of your build.
Historically, custom van conversions had to be acquired outright, and occasionally even in full.
However, times have changed, and there are now alternative methods of getting a van, as well as funding the conversion. Many consumers are now incorporating their conversion costs into their initial van loan, removing the need to pay for everything upfront. You may read about the procedure in further detail below, but here’s a quick overview of how ADF can help streamline your experience.
- We collaborate on your van’s design and specifications before deciding on the finest vehicle for you.
- That van is sourced based on your requirements.
- We complete the plan, details, and expenses for your conversion.
- For the final van purchase and finance, we organize all required parties.
Make the most of the chance to decrease your current belongings. Profit from goods that aren’t going to make the cut.
While it would be ideal to bring everything you own with you, this is simply not possible. Unless you live an extremely modest lifestyle already, downsizing in preparation for van life is a necessity. While it may be difficult to part with some of your furniture, décor, and other items, doing so can actually help you save money for your van and/or van build. Consider this: whether you live in a house or an apartment, you almost certainly have a lot of substantial furniture, such as a couch, a bed frame, or a table. Needless to say, none of this stuff will fit in a vehicle. As a result, why not sell them?
These are often considered to be high-priced pieces of furniture. Consider holding a garage/yard sale or even an estate sale if you are comfortable with strangers accessing your home. If that isn’t your style, Craigslist and Facebook Marketplace are both excellent digital alternatives for selling furniture.
You may sell more than just furniture as you strive to downsize before the major change. Storage space is typically limited when living in a van. This means–you guessed it–you’re going to have to part with some of your clothing. Apologies, fashionistas. Again, decluttering your closet does not have to be a terrible experience. Clothing, shoes, and accessories rarely sell well at garage or yard sales, but they can be sold through cash-for-clothes stores such as Plato’s Closet and Clothes Mentor. These kinds of establishments are advantageous since they handle the selling for you, freeing you to work on other activities in preparation for life.
If you have a little extra time, you can visit some local consignment shops. Consignment firms normally do not pay cash on the spot, but will contact you and give you a part of the earnings if your items sell. As is the case with the majority of things these days, there are now online marketplaces for selling your clothes, such as Depop and Poshmark. There is some additional effort required, such as photographing each item of clothing, writing item descriptions, and delivering each piece of clothing that you sell, but it is a viable method to earn some extra cash.
Purchasing a Van
Locating the ideal van can be a stressful undertaking. Collaboration with your conversion firm (ADF Sprinters) is a simple method to eliminate the majority of the ambiguity. Experienced upfitters understand precisely which alternatives are necessary and which are unnecessary based on your build and aims. We collaborate with customers and dealers from the start to ensure that everyone understands the overall project. Our vast dealer network enables us to locate the van you require within a day or two. If your dream van requires special ordering, ADF Sprinters has a direct ship code that expedites the delivery of newly manufactured chassis to our facility, saving time, shipping costs, and logistical headaches. This code must be applied to the van’s initial order.
A point to keep in mind is the current Sprinter 444 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
Including the cost of the conversion in the initial financing for the van from Mercedes-Benz Financial Services
You’ve just seen a promising commercial providing 2.99 percent APR financing on your new Mercedes, and you’re ready to take advantage of it! I don’t blame you, but pause for a moment and consider how that program operates and what would be a deal-breaker. To begin with, the upfitter must be a Mercedes-Benz authorized master upfitter in order to include fit charges in a Mercedes-Benz loan. From this point forward, a Mercedes-Benz Financial loan will only be eligible for special vehicle financing terms and rates (such as the 2.99 percent deal you saw online) if the financed amount is less than $80,000. Most conversion projects will be finished before the insulation is installed. Anything beyond $80,000 will have to be paid for out of your own pocket. You can still get a standard vehicle loan from the same dealership, so don’t worry.
For most buyers, a regular auto loan has a more reasonable rule of thumb. Expect to pay around half of the entire upfit cost as a down payment. The vehicle, for example, costs $60,000 plus another $60,000 for the upfit, for a total of $120,000. Your down payment will be $30,000, which is 50% of the upfit cost. Prepare for a $50,000 down payment if you increase the conversion costs of that same $60,000 van to $100,000. Mercedes-Benz will offer standard vehicle loans with terms ranging from 24 to 72 months and APRs ranging from 4.9 to 10% (at the time of writing). Depending on your credit, the exact APR, loan duration, and down payment you qualify for may vary.
Remember that loan officers are looking for relevant credit on your credit record. That means that someone with a 700 credit score who has financed a few similar cars in the past and has never missed a payment may be eligible for better terms and rates than someone with an 800 credit score who is buying their first car. The difference here can be so significant that the first buyer listed may be eligible for 100% of the cost + upfit to be covered, but the second will need to budget for a 50% down payment.
Another thing to keep in mind is that upfitters frequently order a large quantity of chassis for special projects. Please check with the upfitter to see if these chassis qualify for the special pricing mentioned at the beginning of this section.
Umpqua Bank is financing a conversion project with RV conditions.
Umpqua bank has put together a unique lending package to help fund the complete conversion project. It’s a three-step procedure that includes everything from the original vehicle purchase, buildout, and final long term RV loan. Here is the method, in layman’s terms:
- Umpqua provides a vehicle loan to cover the cost of the automobile.
- Umpqua extends a personal credit line to pay the expense of the upgrade.
- Once the van is complete, the auto loan and personal line of credit are refinanced with the RV loan.
All of these actions will be pre-approved at the same time. This provides buyers with some assurance that they will not reach the finish line only to discover that the critical 15-year loan required to fund the entire project has fallen through. If you are a loan aficionado or have substantial RV loan expertise, you will quickly see how unique this tool is in its ability to appropriately value the asset in the absence of precisely similar cars. Expect this Umpqua RV loan to cover up to 90% of the entire investment. This implies you’ll be out at least $15,000 toward the purchase of a $150,000 campervan up front.
At the moment, borrowers must reside in one of the following states: Oregon, Washington, California, Idaho, or Nevada. If you have good credit, you can expect an APR of between 6% and 15% for loans of up to 15 years.
Alternative financing options
The alternatives listed above are the most popular ways to finance your van conversion plan. These are just a few of the several funding possibilities available. We will not go into depth here, but the following are some additional finance options to consider when financing your van conversion project:
1. Home Equity Line of Credit (HELOC)
- If you possess a home and wish to leverage it as an asset, this is a simple approach to obtain a sizable sum of money at a low interest rate. You would simply withdraw funds from your HELOC account and make the van and conversion payment in cash. Simply be cautious, as many HELOC loans have variable interest rates that may unexpectedly increase. For additional information, contact your personal bank.
2. Home refinance
- This will require the most effort, yet interest rates remain historically low. This will provide you with a larger lump payment (depending on the value of your home) that you can use to fund the van conversion and possibly another project around the house. For additional information, contact your personal bank.
3. Outside lending source
- There are a spate of new companies focusing exclusively on direct-to-consumer personal loans for a variety of purposes. These include everything from education loans to automobile loans. Companies such as SoFi and Upstart offer these loans directly to consumers, bypassing traditional banks.
While many people utilize home equity loans to finance home repair projects, the funds can be used for anything, even the purchase and renovation of a van.
What’s more, you receive the entire sum up front. It’s prudent to determine how much money you’ll truly require for your van and/or van build, as regardless of whether you use the entire loan amount or not, you must repay it. If you are unsure of the amount you will require, you can consider a home equity line of credit (HELOC). HELOCs are advantageous since you only repay what you borrow. For example, you may only utilize $10,000 of the $20,000 granted. You will be solely liable for reimbursing the $10,000.
Bottom Line : Most conversion projects will be finished before the insulation is installed. Expect to pay around half of the entire upfit cost as a down payment. Mercedes-Benz will offer standard vehicle loans with terms ranging from 24 to 72 months and APRs ranging from 4.9 to 10%. Umpqua bank has put together a unique lending package to help fund the complete conversion project. It’s a three-step procedure that includes everything from the original vehicle purchase, buildout, and final long term RV loan. Expect this Umpqua RV loan to cover up to 90% of the entire investment.
How Bank of America auto loans work
Bank of America offers a variety of auto loans, including those for acquiring a new or used vehicle from a dealership, purchasing your current leased vehicle, and purchasing a vehicle from a private seller. Additionally, Bank of America offers accessible vehicle loans to individuals who require one. This lender does not finance motorcycles, recreational vehicles, or commercial vehicles through car loans, but does provide a separate small business auto loan. Read More >>