Motorhome Finance

Discussion in 'The Beginner' started by themountaintiger, Feb 9, 2010.

  1. themountaintiger

    themountaintiger Read Only Funster

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    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?
     
  2. JeanLuc

    JeanLuc Funster

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    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
     
  3. Ralph-n-Bev

    Ralph-n-Bev Funster

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


    :Eek!:£18k in interest ??:Eeek:
     
  4. themountaintiger

    themountaintiger Read Only Funster

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    Good Advice

    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.
     
  5. haganap

    haganap Funster Life Member

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    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. :thumb:
     
  6. themountaintiger

    themountaintiger Read Only Funster

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    Ta Ralph n Bev

    Yes ive been thinking on that one as well, and also the thought that I may croak :cry: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..
     
  7. themountaintiger

    themountaintiger Read Only Funster

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    Ok, its a no to HP then

    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...:thumb:
     
  8. Ralph-n-Bev

    Ralph-n-Bev Funster

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    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 !!
     
  9. JeanLuc

    JeanLuc Funster

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    I fully endorse the 'do it now' attitude, because none of us know what's around the corner. In our case, we started with our present, and only motorhome, just 3 years ago and we're a bit older than you.

    Just one thought - you said you were being seduced by a shiny new motorhome. Were I thinking of spending a higher sum than your £15K I still would not consider a new motorhome. Ours was 4 years old when we bought it and we intend to keep it for many years yet. Admittedly, it cost a lot more than £15K but I think you can get some really good quality second-hand vans that will outlast a low-end new one. Obviously, I am a Hymer convert, but any well-cared for German motorhome (and some French) will last for years and provide excellent service.

    For example, have a look at the one below. It is offered by Peter Hambilton as an agency sale for one of his customers. (He is perhaps the foremost Hymer expert in the UK but not the official dealership which is Brownhills). This is built on an early Merc chassis, which if cared for, will be virtually indestructible in normal motorhome use. Don't worry about the mileage: these are commercial chassis designed to run and run.

    If you choose something like this, you will have £400 per month to spend on touring (diesel isn't cheap and budget on 25 mpg) and on the inevitable accessories and periodic servicing / repairs that will keep your motorhome in top order so it lasts.

    Philip

    >> Hymer for sale <<
     
  10. pappajohn

    pappajohn Funster Life Member

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    i am one of the unfortunate idiots that Paul mentioned who took a large loan on HP and my advice is DONT DO IT UNDER ANY CIRCUMSTANCES !!!!!

    its probably ok for a £5k car purchase but definately not a £30k motorhome.
    its also probably the easiest loan to get....if you have a job and a house with no CCJs and you'll be accepted.

    interest on an unsecured loan is calculated on a daily basis and to end the agreement early you will only pay the interest accrued at the time of settlement...ie: that months interest.

    HP interest is calculated at the outset of the loan and is added to the loan amount on day one.
    then the total...loan + interest..... is divided by the number of repayments.

    if you wish to end the agreement early you must still pay the total owing....ie: the loan amount + ALL the interest (less a small allowance of maybe 1 or 2% for early settlement but 2% of £40k is only £800)

    long tale and its in another thread (Paragon) but i took an HP loan of £28'500 (you will see why in the other thread) and the total repayable was £47k.

    if i default on the loan (which may happen)then the finance house will repossess the van and sell at auction and deduct that amount from the balance still owing, which i think is around £32k at present, then i still have to pay the balance between what the van fetches at auction (not much) and the total balance owing at present.
    which could mean still owing anywhere between £15k and £20k and NOTHING to show for it !!!!

    so....well over £10k paid to date, van repossessed and sold, then still owe the balance of £15k to £20k

    if you let the loan run full term the £30k van you bought today isnt going to be worth £30k in 10 years so no matter when you end the loan you will be out of pocket to the tune of thousands of pounds

    your choice but my advice....DONT DO IT !!!!!
     
    Last edited: Feb 9, 2010
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  11. haganap

    haganap Funster Life Member

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    Thanks John, didn't want to aire your washing in public.:Wink:

    Sorry Bev I just can not agree with that,:Smile: We had a caravan, thats what we done and started with, on the advice of our inlaws (keen motorhomers untill he (bernie) died last year at just 65 two months into retirement.:Sad:)
    Caravanning is not motorhoming. I got a caravan because I could not afford a motorhome. yes we had some great holidays, loads to remember, like how scared I used to get towing through France with screaming kids, and a van swaying from side to side, :Eek!: Breaking down regularly in my tow car of the year because it couldn't cope with towing a caravan. Spending loads of time with rolliebollies and making beds up. Yeah we loved it but it wasn't what we wanted.
    You could sort of say to the OP, why not spend every 3 months on a holiday abroad somewhere for the same money.?:thumb:
    The guy wants to join us on our revoloution, convince him too, and let him work out how and if he can afford it, but jees don't send him down the Romany path :Rofl1:
    poor chap.:Rofl1:

    Ps, Due to the recent ammount of sharpness, this is a true but tounge in cheek answer:shout::Eek!:
     
  12. Ralph-n-Bev

    Ralph-n-Bev Funster

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    I realize that a caravan is not a MH.
    Iknow your giving a tongue in cheek answer too.
    I don't want this to turn into a Itinerant, chav, bash on caravaner's either.
    But you hit the nail on the head when you said you had one as you couldn't afford a mh.
    If you cant afford one you shouldn't get one till you can. Not just cos you want one.
    IMO too much of this goes on nowadays.
    It can come back and bite you on the bum.

    We've never been abroad in a caravan never wanted to. We liked our Cretian holidays too much.
    We will try with the MH though. I'm not saying it will be my cup of tea or not .
    We like to eat out when on holiday , for lunch and evening meal , and I'm told that to do so in France, our first trip , will be very expensive for 5. We may end up using the Cadac more than we thought.
    We've never had longer than a week in a caravan .
    Our twin wheeler was a lot bigger than some Mh Ive seen too. But the thought of 2 adults 3 kids and 2 dogs in a box did not appeal as my kind of relaxing holiday :Rofl1:
    Though rallying most weekends in a farmers field, no hook up with like minded people does. So im no princess !!
    We had , still have infact , a Nissan Terrano, fab towing car.
    Infact we've towed many a motorhome off wet grass, let alone mud or snow with it. The caravan had shock absorbers and we kept to 60 so we didn't suffer with the sway syndrome:Wink:
    I guess what I'm trying to say , without digging an even bigger hole is:-
    To the original poster, don't get saddled with too much finance , then.
    Especially as we don't know what the interest rates are going to do.
    It used to be that only retired folk had a MH . Usually because the pensions had paid out big, when they used to.:Angry:
    Its good that there are younger MH owners about, long may it continue.
    Just dont bite off more than you can chew.

    Oh and enjoy your ski ing trip . Bet your all really excited .
    And sorry about your F.I.L , must admit thats why we got ours now, so we could enjoy it with the kids. You dont know whats round the corner , your right.
    As long as its not the bailifs :thumb:
    Bev
     
    Last edited: Feb 9, 2010
  13. themountaintiger

    themountaintiger Read Only Funster

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    Your all so helpful

    Thanks Guys (& Gals) for your advice

    Thanks Pappajon for your comments. I did read your posts about your situation prior to me doing my first post and it did surpress my passion to go down the HP route, especially when I realised the amount of interest to be paid and what could happen if personal circumstances change.

    Thanks also to haganap who has realised that I dont want to be a tugger!! I do want a motorhome rather than a caravan as it would suit my needs better, and I definitely want to join the Motorhome revolution. Not sure what exactly the revolution is but it sounds dangerous and exciting. :Blush:

    Ralph n Bev, its like having an uncle and aunty protecting me from making a bad financial mistake so thanks for your comments, Ive decided that ill arrange some finance but Im not doing the HP thing, ill go with short term bank loan with some savings. I dont quite agree with waiting till its all saved up but I understand where you are coming from.

    Philip, I do agree with you that you never know whats round the corner and thats my approach. Im going to set the budget at £20k or less and see whats available perhaps around the 5yr old mark. Thanks for the Hymer link, im back off to ebay/autotrader/caravan finder to see what delights are there today......

    Ill keep you informed of what happens................... :thumb:
     
  14. Ralph-n-Bev

    Ralph-n-Bev Funster

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    Oer young man !! I'm not that much older than you .
    Ralph would probably said go for it mate !!
    I'm the half empty cup one.
    Stick to your budget. We didn't though . We said £20 then £25 then Oh sod it , you only live once , might be dead tomorrow and spent £30!!
    Must admit due to the weather , Ralph's a builder , we were sweating a bit in January , I'll tell you.
    Thinking god we've spent the savings :Eeek:
    Look at loads ,try the beds , think about the lounge area , how you'd use it.
    Get a numb bum searching the net for your perfect MH.
    Good luck. Enjoy
    Let us all know what you decide to get, and any questions, someone on here will know the answer.
    Happy hunting
    Bev
     
  15. eirebus

    eirebus Read Only Funster

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    just a thought but why dont you look into buying a de- mountable i believe they cost about 14k--15k to buy new then trade in your car for base vehicle then you have new home and old motor a comprimse of sorts :thumb:
     
  16. themountaintiger

    themountaintiger Read Only Funster

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    Lateral thinking by EireBus

    This is a really inventive idea, but the dynamics of my current transport situation is that I have a Ford Transit SWB paid for by work, (and also tax deductable) which I cant just swap. I like the lateral thinking though and thanks for taking the time to post. I had thought once upon a time that I could actually replace the tranny van, with a van based motorhome which I then could use all the time, but I dont think the Inland Revenue will let me get away with that one...Hmmm not unless I buy a hairdryer and set up as a mobile hairdresser in a Trigano..tee hee.. youve got me thinking now!!!!!!!!!!!!!!:Laughing:
     
  17. yorkshirepudding

    yorkshirepudding Read Only Funster

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    Hi Tiger,

    I'm surprised no one has sugested going down the self build route. £10k should buy you a decent base vehicle and you can equip it to whatever levels your pocket can stand at any given time.
    We spent the latter half of last year with a partly converted 2006 Transit (beds done first) and using our camping equipment (Table & cooker) either inside or outside depending on the weather. I shall fit the kitchen when the weather gets a little more clement and in May we are heading off towards Italy over six weeks.
    Good luck whatever you decide.
     
  18. yorkshirepudding

    yorkshirepudding Read Only Funster

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    Ach! must have posted at the same time. You have already thought of my suggestion.
     
  19. rainbow chasers

    rainbow chasers Read Only Funster

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    Check out APR's and work out the percentages, often banks are cheapest, even by a few percent - it makes a lot of difference!

    Most forecourt lenders tend to be a little higher. You could also check out the Brisish Islamic Bank - you may laugh! But a friend of mine is a financial advisor, and this bank actually do some cracking loan and mortgage rates. You don't have to be a muslim, anyone can open an account - and due to their religion, they cannot make profit! They lend you money at a set rate, no interest, but does include a 'fee' usually about 1.5% if i recall.

    Have a good look about, and work out true costs. Even visit a handful of auctions and see what you think there - you may get quite a bargain if you keep your head screwed on!
     
  20. Minxy Girl

    Minxy Girl Funster Life Member

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    Hi, I just popped on the site for a nosey and saw this thread. I have to agree with what others have said do NOT go for HP!

    HP would be secured on the motorhome and until you made the last payment, and any 'admin' fee that they often slap on too at the end, you would not actually own the motorhome. That's bad enough, but then, say it was a 10 year HP, if you wanted to change your motorhome after 5 years, you'd have to repay the HP and that means either getting a loan elsewhere (bank for example) and paying it off with all the interest etc which has already been explained earlier, or get another HP agreement which pays it off, and adds on interest to more interest and ties you in again.

    Much better to get a standard type of bank/building society loan, you are then in control of it - if you decide to change your mtorhome after a few years you can without having to 'settle' the initial loan. and can then get an additional loan to run alongside the original one if you need to for any extra amount you need. It works out much cheaper and easier that way.

    I would NEVER go for a HP agreement now ... we did it once for a car and we had to pay it off before changing the car to avoid falling into the 'continuing' HP trap.

    As for your budget, don't spend it all on the motorhome - keep some back for the bits and pieces you may want to add to it, especially if you end up buying privately or from an auction as you may have to spend some money to sort out stuff initially - better to have some money in reseve just in case.

    Other than that - don't rush it, take your time and if you see what you think is your ideal van go and have a very long coffee and a good old think before committing yourself - it is much easier to be objective when you're not sitting in your possible new pride and joy with it wispering 'sweet nothings' in your ear!!!:Blush:
     
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