Whether you want to buy a new or second-hand motorhome, there is no way around the fact that it is likely to set you back a fair sum of money.
As the charity Citizens’ Advice suggests, the purchase of a motorhome is likely to be one of those larger items for which you may need to borrow money. So, let’s take a look at some of the most frequently asked questions (FAQs) about motorhome finance.
How much can I borrow?
You may borrow what you can afford to repay. Those repayments will depend on the amount you borrow, the length of time for which you borrow the money, the amount you have saved to offer as a deposit, and the rate of interest you are offered by any lender.
These are the factors that determine the affordability of any motorhome finance.
How does a finance company calculate that affordability?
The motorhome finance company will consider the amount you are putting down as a deposit, your regular earnings and expenditure and – perhaps most important of all will examine your credit rating.
Any finance company is obliged to check your credit history – which illustrates how well, or otherwise, you have managed borrowing and credit in the past and, so, provides the lender some confidence in your maintaining the agreed repayment schedule on any new borrowing.
Don’t be misled by those advertisements suggesting that there is any such thing as “no credit check credit”.
How can I trust any lender to offer a fair deal?
Lenders providing motorhome finance advice need to be authorised and regulated by the Financial Conduct Authority (FCA) – and you may review the FCA register to confirm that here at Derby Motorhomes we have just such authorisation, trading as Motor Plus Derby Limited.
Not only is our motorhome finance business regulated by the FCA but it also means that if you subsequently have any complaint or dispute about your finance, you may refer the matter to the Financial Ombudsman Service.
What forms of motorhome finance do you offer?
Perhaps the most familiar form of finance is hire purchase.
If your application is approved, you typically need to find a deposit of around 10% of the purchase price of the motorhome you have chosen.
The balance of the purchase price is then repaid in equal monthly instalments over the agreed term of the hire purchase agreement. In some instances, you may be able to opt for monthly repayments followed by a larger, final, “balloon” payment.
It is worth remembering that legal ownership of the motorhome does not pass to you until the final instalment has been paid and that if you default on the repayments, your motorhome may be repossessed.
Personal Contract Purchase (PCP)
You have almost certainly heard about PCPs as they are used to purchase a large number of private cars these days.
Here at Derby Motorhomes, we are currently able to extend this motorhome finance facility to the purchase of your motorhome, too.
For more information on how we can help you with motorhome finance, please visit our dedicated page here or please give us a call on 01332 360222 – we’d be delighted to help.