Tag: Motorhome finance

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.

Some things in life are destined to remain forever a dream unless you somehow find the ways and means of buying them – it’s not that money can buy you happiness, of course, but it certainly helps in making your dreams come true.

You don’t have to bank on the unpredictable British weather and expect a Summer that is dry, warm, and sunny. If you buy a motorhome, you’ll always have somewhere dry and cosy to see out the worst our climate may bring – or drive it over to the Continent, save on rising hotel costs, and have your own home away from home wherever you are.

What better way to enjoy the outdoor life and freedom of the open than behind the wheel of a motorhome? So, if you are thinking about buying a motorhome, what are some of the most important points to take into consideration?

New or pre-loved?

There’s nothing quite like knowing that you’re the first person to have taken your motorhome on its first outing, nothing like being the first person to have slept in it – so buying a new motorhome lets you in on all of that, together with the reassurance of a lengthy warranty.

The greatest obstacle, of course, is likely to be the cost of buying a new motorhome. Used motorhomes hold their value pretty well, but they do still depreciate, so one that is, say, three years old might offer a significant saving on the new price, if it still has a relatively low mileage.

To help you decide whether to splash out on a new motorhome or get a good deal on a pre-loved vehicle, here at Derby Motorhomes we have a permanent exhibition of both new and used models from which to choose – after you’ve had your own up close and personal inspection of as many motorhomes you’d like to try out for size.

Size matters

Probably the greatest feature of any motorhome is its versatility. You not only get to drive it from A to B, but it also provides shelter in which to take your lunch along the way and your accommodation when it is time for bed.

Versatility also gives you the choice between a motorhome that is a genuine home away from home – with all the creature comforts you might possibly want – and a vehicle that is agile and manoeuvrable enough for negotiating new and unfamiliar routes while still providing more than adequate sleeping accommodation at the end of the day’s touring.

Size, therefore, often represents a balance between manoeuvrability on the move and spacious comfort at the end of the day. Summing up the questions of size, therefore:

  • it is likely to come down to how you are planning to use your motorhome;
  • is your motorhome likely to be used mainly just by you and your partner or do you need the extra berths for a child or two;
  • are your outings and holidays planned mainly in the UK, or will you be taking your motorhome further afield in continental Europe;
  • the balance between practical manoeuvrability, weighed against all the space and comfort a larger motorhome may offer, is likely to swing your judgment;
  • however you choose, Motorhome Planet suggests that you keep a note in the cab of the height and width (metric and imperial) of your vehicle, if you encounter any road width or bridge height restrictions.

Whatever size motorhome you eventually choose, you might want to take advantage of one of the Manoeuvring Courses run by the Camping and Caravanning Club for its members.

Weight

Closely related to the question of how you plan to use your motorhome – and, in turn, its size – is the critical matter of its weight. The bigger your motorhome, of course, the heavier it is likely to weigh and the payload you can carry.

As a guide published by AutoTrader Motorhomes explains, weight is an equally important consideration, especially if you have chosen a vehicle in one of the heavier categories. You may then need to consider whether your standard Category B driving licence qualifies you to drive the vehicle.

The Camping and Caravanning Club explains that you currently need a Category C1 driving licence to drive a larger motorhome with an Maximum Authorised Mass (MAM, the technical term for the maximum laden weight of your caravan) between 3,500kg and 7,500kg.

If you passed your driving test before the 1st of January 1997, you are automatically entitled to this Category C1 licence, but if you took it after that date, you must take a separate driving test to gain the additional entitlement.

In either case, your current driving licence entitles you to drive motorhomes up to 3,500kg MAM – and the majority of motorhomes built in this country therefore comply with this weight restriction.

Layout

The design and planning that goes into the internal layout of every kind of motorhome – from a simple campervan to the largest of leisure vehicles – has become ever more skilled and innovative.

There are countless possibilities when it comes to the motorhome’s layout and you might want to give serious consideration to the one that best suits your proposed use.

If you are likely to be travelling alone or with your partner, for example, a simple layout that requires converting the seating into beds at night might suffice; if you are likely to be holidaying with the family or expect to be entertaining, then a layout that includes a more spacious lounge area and fixed beds may be more appropriate.

Budget

When you have made those necessary choices about the layout, overall size and weight of your preferred motorhome, the final decision might come down to the budget you have available or the motorhome finance that is available:

Your savings

  • some people are fortunate to have savings – and, especially as you approach retirement, you might be looking forward to ways of spending your pension’s lump sum cash pay-out;
  • by using your savings, of course, you avoid the need for finance altogether, so there are no credit repayments to find, no interest to pay, and your motorhome is 100% yours from the start;
  • unfortunately, though, many people’s savings do not extend to the amount necessary to invest in the motorhome of their choice;

Personal loans

  • even for such a relatively expensive purchase, your bank manager might still be amenable to granting an unsecured personal loan, which you repay in monthly instalments over a period of up to five or six years;
  • as it is an unsecured loan, however, with the lender having nothing to fall back on if you default on the repayments, you are likely to need a more or less perfect credit score to secure this type of borrowing;

Dealer arranged finance

  • if you are buying your new or used motorhome from a large and reputable, specialist dealer, however, you might need to look no further than the dealership itself;
  • making the finance available goes hand in hand with any dealer’s main business of selling you the motorhome you have chosen and his standing and reputation in the market is likely to mean that any finance partners are competitive, reliable and duly regulated and authorised by the Financial Conduct Authority (FCA);

Hire purchase

  • one method of motorhome financing almost certain to be offered by such a dealer takes the familiar shape of a hire purchase agreement;
  • this needs an initial deposit, typically around 10% of the purchase price, although you might be able to meet this requirement by trading in an older motorhome in part exchange for the one you want to buy;
  • repayments are by equal monthly instalments, and if you default on these, you risk the motorhome being repossessed by the hire purchase company;
  • that is because ownership of the motorhome is not transferred to you until the final instalment has been paid and it is illegal to attempt to sell your motorhome before that date whilst the outstanding finance balance remains;
  • because hire purchase agreements are effectively secured against the vehicle in question, financial confidence is generally sufficient for a competitive rate of interest to be offered;

Equity release

  • the website Out and About Live mentions the possibility of unlocking some of the capital value in the home you own by arranging an equity release agreement;
  • a so-called lifetime mortgage to achieve that equity release involves no monthly repayments of either capital or interest, which is paid only upon your death or when your home is sold (when you go into long-term care, perhaps);
  • however, you need to bear in mind that equity release is a major decision, which you may not want to take without first consulting an independent financial adviser.

If you have ever dreamed of owning a motorhome, there are a number of financing options available to you – and many dealers may be able to help you turn your dreams into reality. Those options tend to be increasing all of the time. One of the most recent developments, for example, is the extension of Personal Contact Purchase deals to financing the purchase of your motorhome.

For a discussion about any of these motorhome finance options simply contact us here at Derby Motorhomes. You can also read our Motorhome finance guide here for more information.