When it comes to camper and motorhome financing, you have a few options: Use your savings
Firstly, you could save up the money for a cash purchase. This will give you full ownership of the vehicle right away, and you won't need to worry about interest rates or additional charges. If you aren't in a position to buy the van outright, you could use your savings to make a larger deposit, reducing the amount you owe using other methods of financing.
If you do make a cash purchase, ensure you have some money set aside for an emergency fund. You'll also need to take fuel and maintenance into consideration. Enter a hire purchase agreement
A hire purchase agreement involves paying a deposit, and then taking out a loan to cover the rest of the vehicle price. Most dealers ask for a 10% deposit, and the loan will be secured against the campervan or motorhome itself. However, as previously mentioned, if you have a higher amount in cash, you may be able to make a bigger deposit, reducing the length of time it takes to pay the rest.
After making your deposit, you'll pay a fixed amount each month until you've paid the cost of the loan — plus interest. Once you've made the final payment, you'll have full ownership of the vehicle.
Hire purchase agreements can be quick and straightforward to arrange but can be an expensive form of motorhome finance.
If you're worried about your credit score and fear getting rejected for an unsecured loan, then hire purchase could be a good option. Because it is secured against an asset (the motorhome), you have a good chance of being accepted for hire purchase even if you have bad credit. Use a credit card
You may think credit cards are only suitable for small purchases, such as home appliances or some items of furniture. However, it is possible to buy a vehicle with a credit card
. Depending on the price of your motorhome or van, you may be able to cover the cost with a credit card. The credit card company will pay the van dealer, and then you make monthly repayments to the credit card company — just as you would with any other purchase on credit.
It's important to note, however, that most credit card limits don't exceed £5000 and some car dealerships will not accept credit card payment. If you're looking for a brand new motorhome, this may not be the best finance option.
Bear in mind also that credit cards may come with high interest rates. If you have a poor credit score or thin credit file, you may need to look into building your credit rating
before you apply for a card. Take out a personal loan
Another motorhome finance option is to take out a personal loan. These loans, which are unsecured, allow you to borrow money from a lender and pay it back in monthly installments.
You will need to take interest rates and fees into account, so it's best to look at the annual percentage rate (APR)
when comparing loans. APR gives you a more accurate picture of what you'll need to repay than focusing on interest rates alone.
Many lenders will let you borrow up to £50,000, which will cover the average new motorhome cost. As with any loan, just ensure that you're confident you can make the monthly repayments.