The price of motorhomes vary drastically between different models but whatever the price you end up paying, a motorhome is likely to be one of the most expensive things you ever buy. For many people, the upfront cost of the right motorhome is prohibitive and so plenty of people look towards finance. There are good and bad ways to finance a big purchase, though, so here’s a quick guide…
If you’re buying from a large dealer or at least somebody who sells motorhomes for a living then they may offer you some sort of finance package. Usually you’ll have to put down a deposit and pay installments monthly until you’ve paid off the whole amount. These deals can be quite good value if you have a reasonable credit rating but you’ll need to do your sums when it comes to the interest payments. Compound interest can be quite a hit so even a relatively low rate might significantly increase the overall cost of your motorhome.
Be careful of things like leases, too. Often you will only be able to claim discounts if you renew your lease with the same provider. If you don’t, you may be asked to return your motorhome. For some people, leases do work perfectly but be sure to assess the credentials of your dealer – if they go bust in ten years time you might find your lease agreement is not honoured.
Alternatively, lots of people take loans from the bank to buy motorhomes. Probably the cheapest way to do this is by extending an existing mortgage you have on a property or switching to interest only payments for a short term. This won’t help you pay anything off of your mortgage but it might just free up a bit of cash to make that big buy.
Otherwise, a short term loan can be a good option but you’ll need to look hard at what deals are available. Generally, it’s good to borrow for as short as possible and at the lowest interest rate possible but don’t forget you might need to cover the costs of tax, shipping and motorhome insurance.
It sounds obvious but never ever take out anything you can’t afford to pay back – there’s a motorhome in everyone’s budget so don’t be afraid to compromise.