Motorhome Finance

themountaintiger · 09-02-2010, 13:02

Want to buy my first motorhome. Set myself a budget of £15k which I would have thought should be able to get an unsecured loan for. If I want to increase my budget are there any 'best ways' of financing the purchase. Im aware unsecured loan wont really be suitable for higher than 15K and therefore perhaps HP is more suitable for higher amounts as the security is with the motorhome itself. I did get an approximate quote from a sales advisor based on buying a £30k motorhome, but over 10 years I would be paying about £18k in interest,

Any thoughts please?

JeanLuc · 09-02-2010, 13:27

I have no idea about the optimum source of loan finance for a motorhome, but would offer a word of caution regarding future interest rates. Whilst you might get a fixed rate on the MH finance, there is also the need to consider any other out-goings that may be linked to variable rates e.g. mortgage, credit cards etc. Whilst borrowing is currently quite cheap, almost all financial experts are predicting significant rises over the next few years in order to choke-off inflation. Most recently, Barclays predicted that base rate could rise to 3.5% by 2012 and 6.5% by 2015 from the current 0.5%.
That would put a huge pressure on many people's monthly cost of living.

Hope this doesn't sound too much like preaching - just concerned at what's round the corner!

Philip

Ralph-n-Bev · 09-02-2010, 13:31

Wait a few more years and save up a bit more.

£18k in interest ??

themountaintiger · 09-02-2010, 13:40

Hi Philip, thanks for your advice, Ive read some other posts on here from others who have fallen on bad times and have had to fight to keep their motorhome. I suppose that is one major consideration I have in not actually borrowing £30k for a motorhome when I can enter the market with one at £15k, albeit I can afford the monthly payments of around £400 per month. Im fortunate enough not to have any other borrowings so no mortgage, car loan, credit card debt etc etc, so the interest rates changing will affect me slightly but not in any major way. Even kids have left home, but dont worry they are over 18yrs old!!

I think I have been seduced by the shiny new motorhome I saw at the weekend, and thoughts that im not getting any younger (im on second mid life crisis at 44yrs). My heart is telling me, buy the shiny new plaything, and the brain is telling me £18k interest over 10 years (£12k over 7years) is too much...

I appreciate your comments Philip and I will keep thinking carefully. Of course there is the national lottery on Wedneday and Friday which might help my predicament.

haganap · 09-02-2010, 13:43

I would not go down the HP route.

I would go with an unsecured loan and a large deposit. DO your homework and get the best deal you can get. That way you should find that if things go pete tong, tehn you have enough equity in your van to sell and pay off your loan. HP works different, so although you may get a similar figure to the personal loan, the way the interest is calculated is different. There are one or two on here whom (i wont name, its up to them if they wish to tell you) have been well and truly stitched up with HP when they have wanted to change there van.

Other posters will like Jean Luc offer sensible advice on watching rates, saving up etc and its worthy advice that should be heeded.

Me?

I am a devil for I need it now, not in 10 years. If I would of taken that advice (given by my in laws) on my reconing I would now of saved approx 10 grand towards my van. I would of therefore of missed out on 5 wonderful years of touring with small children, Exploring different countries, meeting the most kindest bunch of people whom many of whom I now call friends, and spent the last 5 years dreaming about having one whilst staying indoors watching TV. If I lost my Job tomorrow or indeed if Nikki (my wife) did, the van would of had to be sold. But at least I would of had the memories.
Make sure you leave enough in your budget for running costs,
Or get yourself a very affordable van to see if you enjoy it before throwing your life at it.

themountaintiger · 09-02-2010, 13:50

Quote:

Originally Posted by Ralph-n-Bev

Wait a few more years and save up a bit more.

£18k in interest ??

Yes ive been thinking on that one as well, and also the thought that I may croak

whilst saving up thus missing out on the fun of being out and about in a motorhome in the meantime. I suppose I wouldnt mind paying the interest for the benefit of having the motorhome earlier, than having to wait to save up as long as I can minimise the interest.

Well yes if my numbers are correct, of course the sales advisor just said it would be £400 a month but x that by 120 months = £48k less cost of motorhome £30k = £18k, unless my maths have gone wrong somewhere. Perhaps someone who has bought in this way can let me know..

themountaintiger · 09-02-2010, 13:59

Quote:

Originally Posted by haganap

I would not go down the HP route.

I would go with an unsecured loan and a large deposit. DO your homework and get the best deal you can get. That way you should find that if things go pete tong, tehn you have enough equity in your van to sell and pay off your loan. HP works different, so although you may get a similar figure to the personal loan, the way the interest is calculated is different. There are one or two on here whom (i wont name, its up to them if they wish to tell you) have been well and truly stitched up with HP when they have wanted to change there van.

Other posters will like Jean Luc offer sensible advice on watching rates, saving up etc and its worthy advice that should be heeded.

Me?

I am a devil for I need it now, not in 10 years. If I would of taken that advice (given by my in laws) on my reconing I would now of saved approx 10 grand towards my van. I would of therefore of missed out on 5 wonderful years of touring with small children, Exploring different countries, meeting the most kindest bunch of people whom many of whom I now call friends, and spent the last 5 years dreaming about having one whilst staying indoors watching TV. If I lost my Job tomorrow or indeed if Nikki (my wife) did, the van would of had to be sold. But at least I would of had the memories.
Make sure you leave enough in your budget for running costs,
Or get yourself a very affordable van to see if you enjoy it before throwing your life at it.

Thanks for this, yes I was a bit unclear regarding the mechanics of the HP and how to get a good deal if you wanted to sell the motorhome. Its looking more like what I need to be doing is to perhaps still borrow the £15k but add another £5K from personal money. That way I can perhaps get a motorhome that is just 4-5 years old which will still be looking quite modern.

I definitely dont want to go down the route of waiting to save it all. Ive heard of too many distant relations/friends who never made retirement so dont want to delay a few years to save up. Id rather pay some interest and have the fun now...

Ralph-n-Bev · 09-02-2010, 14:07

Quote:

Originally Posted by haganap

I would of therefore of missed out on 5 wonderful years of touring with small children, Exploring different countries, meeting the most kindest bunch of people whom many of whom I now call friends, and spent the last 5 years dreaming about having one whilst staying indoors watching TV.
Make sure you leave enough in your budget for running costs,
Or get yourself a very affordable van to see if you enjoy it before throwing your life at it.

OR you could get a caravan , like we did, and save the £400 a month you can afford to pay..
We still did all of the above with 3 small children but with a caravan.
(Though the holidays abroad were in aeroplanes granted !)

Then we px'd the last caravan for the motorhome and used the cash we'd saved over the years!
Ralph would have liked to have had the MH when he was 33 not 43 , we just couldn't afford one then.
But we got there eventually . Hopefully we've got many many years to enjoy our new hobby.

Your still young !!