Whether you are buying new or second hand, a good motorhome is likely to be a large financial purchase. That’s why many of our customers look to various forms of borrowing to finance their motorhome purchase.
To set your sights on any particular motorhome, of course, you will want a better ballpark idea of how much you can borrow.
Here at Derby Motorhomes, we’re happy to help you discover just that.
Motorhome finance calculator
Our online motorhome finance calculator can give you an estimate of how much your HP motorhome finance may cost based on how much you want to borrow.
If you decide to proceed with an HP motorhome finance application, the actual cost may be different as it will be influenced by the points discussed below. But it is a good starting point.
How much can I borrow?
The amount you can borrow – the amount you will have available to buy your motorhome – depends on and typically not limited to:
- your financial circumstances (how much you can afford to repay each month);
- the period over which you want to complete the repayments;
- the rate of interest attached to any loan or credit; and
- the measure of your creditworthiness that is expressed in your credit rating.
Hire purchase
The amount you can borrow – and how much that credit will cost – is also determined by the method of borrowing you choose. As you’ll have noticed, our online calculator takes hire purchase as your favoured method. Why is that?
It’s quite simply because hire purchase is one of the most popular forms of motor finance – according to the Money Saving Expert in a piece updated on the 11th of April 2022.
Hire purchase is a credit plan involving precisely those two elements: after paying a relatively modest deposit (typically of around 10%) you make monthly repayments to hire the vehicle and have the option of making a final payment – the purchase – to own it.
As the government-backed website MoneyHelper explains, your delayed ownership means that the loan can be secured against the value of the vehicle – and this typically helps to reduce the level of interest that is charged in other types of borrowing (an unsecured personal loan from your bank, for example).
There are other advantages to this method of financing your motorhome purchase:
- the interest rate is fixed, so you know exactly how much you’ll be paying each month;
- because the loan is secured against the vehicle, you might have more success getting hire purchase than an unsecured loan if your credit rating is less than good;
- the initial deposit – of around 10% – is typically affordable, as is the final payment to complete the purchase (unlike the steep final payment you typically need to make at the end of a Personal Contract Purchase or PCP); and
- unlike some other credit arrangements, hire purchase does not typically involve any mileage restrictions.
Summary
There is good reason for the abiding popularity of hire purchase agreements. They are typically easy to understand, have straightforward terms and conditions, and might often prove a cheaper way of borrowing than some other methods.
Our online calculator for motorhome finance will show you, at a glance, an example of just how much your monthly motorhome finance repayments could be.
If you are looking to finance your next motorhome, then please contact us today.
