A motorhome is a significant purchase, and not everyone can (or wants to) pay for it outright. Financing it is very common, but it's worth doing it sensibly so you don't end up paying far more than necessary. Here we explain the options and the points to watch. Remember this is general information, not financial advice: compare offers and check your own situation.
The financing options
- Personal loan from a bank: you borrow the money from your bank and buy as if paying cash. It gives you room to negotiate the price.
- Dealer/seller financing: convenient, sometimes with special terms, but always compare the real cost against other options.
- Loans specific to leisure vehicles offered by some lenders.
The figure that matters: the total cost
Don't just look at the monthly instalment: what really matters is the total cost you'll end up paying (capital + interest + fees). Check the APR (which includes interest and charges), any arrangement fees, linked insurance (sometimes lenders require you to take one out) and whether you can repay early without a penalty. A low instalment over a very long term can end up being extremely expensive.
Tips to avoid overpaying
- Compare several offers (your bank, others, the dealer) with the same amount and term.
- Put down a good deposit if you can: it reduces what you finance and the interest.
- A reasonable term: not so short it strangles your budget, not so long it inflates the cost.
- Watch out for bundled products (insurance, cards) that make the deal more expensive.
- Read the small print before signing.
Don't forget the fixed costs
When working out whether you can afford it, add to the instalment the fixed costs of owning a motorhome: insurance (see insurance), the annual roadworthiness test, maintenance, and where to store it. The loan instalment is only part of the real cost.
In short
To finance a motorhome, compare options (bank, dealer), focus on the total cost (APR and fees) rather than the instalment, put down a good deposit and choose a reasonable term. The step to take today: before signing anything, get at least three offers for the same amount and term and compare their total cost; that comparison alone can save you a lot of money. And decide first whether buying is right for you (see renting or buying).
