Motorhome purchase and how to finance it

RAS

Jan 19, 2021
6
9
Worcestershire
Funster No
78,870
MH
VW Campervan
Exp
Since 2013
Dear members,

As a VW Campervan owner looking to upgrade to a motorhome, could I please ask and I am not looking for any personal details.

Purely for my benefit and hopefully this is not taken as being too intrusive or rude. I am looking to understand how I go about funding such a large investment as a motorhome.
Could I please ask the members as to how you have financed their motorhome purchase and whether you would do the same again.
If it was via financial loans or lease purchase then which finance organisation did you use, rate did you get?
Was it via the MH dealer or done separately?
The interest rates quoted by some brokers is as high as 8.9% which puts a lot on a loan over 10 years.
If you would prefer to share information but not on a general thread then please do make contact on a private conversation.





Re
 

Tombola

LIFE MEMBER
Nov 21, 2020
654
2,100
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78,053
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Autotrail Imala 734
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12 years
I dont use finance these days, I tend to buy it as Im soo titght and want to save interest.

But when I did finance back in the day I found a lot of the high street lenders like sainsburys and tesco rate for loans were better than a lot of finance companies

Certainly kept away from things like PCP, H P etc.
Also watch out for Chattel mortages tied to the motorhome

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Lenny HB

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Oct 18, 2007
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658
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Since 2008 & many years tugging
:welco:

I wouldn't want to borrow money on a depreciating asset. Best to save up and buy when you can afford it, that's what we do.
Once you have bought the first one the cost to change is not too bad.

IMO you would be bonkers to borrow money over 10 years for something you are only going to keep for 3 or 4 years.

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Mar 23, 2012
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sleights
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Well said.

Borrowed money is the most expensive you can get.
If you don't have the money, don't spend it.

A difficult concept to convey in today's world, but it worked for me.
I only ever borrowed to buy my first house.
We borrowed for houses a buisness loan and our investment properties. But they were all costed showing a better return by a fair margin that the interest costs.
 
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stevewagner

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May 14, 2013
437
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26,004
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Yonks
Dear members,

As a VW Campervan owner looking to upgrade to a motorhome, could I please ask and I am not looking for any personal details.

Purely for my benefit and hopefully this is not taken as being too intrusive or rude. I am looking to understand how I go about funding such a large investment as a motorhome.
Could I please ask the members as to how you have financed their motorhome purchase and whether you would do the same again.
If it was via financial loans or lease purchase then which finance organisation did you use, rate did you get?
Was it via the MH dealer or done separately?
The interest rates quoted by some brokers is as high as 8.9% which puts a lot on a loan over 10 years.
If you would prefer to share information but not on a general thread then please do make contact on a private conversation.





Re
Sorry for the negativity you received from some members. Of course it's great if you have the finances to buy outright but if not and you feel you can afford it why not go for it? Obviously you want to get the benefits now and I don't blame you. There appears to be some decent rates out there at the moment. Black Horse finance are big players. If you are a homeowner perhaps you could remortgage or get a further advance.
Whichever way you choose I wish you luck. Life's too short enjoy it while you can!

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Sep 29, 2019
1,119
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Wow. There are a lot of lucky people on this forum having the means to save the amount of money required to buy a Motorhome.

Alas we could not, we had an advance on the mortgage for ours and upped our mortgage payments the same amount a large loan would have cost. The interest rates are currently so low it made sense to do that.

We have a Motorhome to enjoy that we own outright and the mortgage will get paid off quicker.
 
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busbuddy

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Oct 2, 2018
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Depends how much you are borrowing.....if you jump in the deep end and get £100k loan its probably not a good idea but £20k is maybe ok depending on your circumstance
I did big yanks, vw Danbury, karmann coachbuilt and now a swift....none bought new and all cash but that's me
 
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Oct 8, 2007
552
960
Kent
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562
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None
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Since 2007
I am looking to understand how I go about funding such a large investment as a motorhome.

Alas we could not, we had an advance on the mortgage for ours and upped our mortgage payments the same amount a large loan would have cost. The interest rates are currently so low it made sense to do that

As above (y)

Mick

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Mar 23, 2012
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Wow. There are a lot of lucky people on this forum having the means to save the amount of money required to buy a Motorhome.

Alas we could not, we had an advance on the mortgage for ours and upped our mortgage payments the same amount a large loan would have cost. The interest rates are currently so low it made sense to do that.

We have a Motorhome to enjoy that we own outright and the mortgage will get paid off quicker.
I think thats a really good way to finance it if you're going to and if you keep up the higher payments on the mortgage the term will reduce a lot. But given that you now owe more on the house I think the view that you"own" the motorhome is stretching it a bit you just owe the cost of it somewhere else!
 
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funflair

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Dec 11, 2013
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Seems like a lot of cash buyers on here and while I agree with basic principle "If I couldn't afford to buy one without finance, I wouldn't buy one" but there must be situations where for example somebody has money tied up in investments that might be doing better than the % rate available for say a £25k loan so they could make a case for finance/loan.

Every case will be different though but judging by the number of tables Black horse finance have set out at the likes of NEC shows lots of people must be using them.
 
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Sep 29, 2019
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I think thats a really good way to finance it if you're going to and if you keep up the higher payments on the mortgage the term will reduce a lot. But given that you now owe more on the house I think the view that you"own" the motorhome is stretching it a bit you just owe the cost of it somewhere else!
I like to have a positive outlook, if the house gets repossessed, I can still go on holiday and indeed will be all the time. :)

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Mar 23, 2012
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I like to have a positive outlook, if the house gets repossessed, I can still go on holiday and indeed will be all the time. :)
I don't know what happens in house repossession thankfully but would have thought theres not much difference between what you owe the money on. I do agree we were lucky to be able to buy with cash but there's also the fact we had the cash because we hadn't spent it on something else (flashy car, holidays,clothes whatever) . I did borrow money just after starting work to buy a motorbike and still owed some a while after I got rid of it never borowwed for a vehicle again.
 
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Jan 20, 2019
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We had some savings and took a small amount of tax free allowance from personal pension.
We are lucky we have no mortgage or any other debt and I have upped my pension payments to make up for what was taken out.
I suppose it depends on personal circumstances If the kids were still at home and we still had a mortgage then maybe we would have held off.
We also no longer take expensive foreign holidays and happier just trundling around in the van! 👍
 
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Tombola

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Nov 21, 2020
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As with Chaser and The Wino above, if you need to borrow you probably can't afford it.
I wouldnt go that far !

We dont know what the OP means by large purchase it may just be 20k, a loan from tescos at the moment over 3 years for 20k would mean payback of around £800.
leaving depreciaton out of it then, its down to the OP to decide if 3 years of pleasure for him and his family is worth the extra 800 instead of waiting.
And then possibly the offset of savings he may make by using the motorhome than going away on a plane with his family.
Could actually turn into a positive ££££
All of a sudden 3 k a year he spends on foreign holidays could drop to 1k a year motorhoming...over 3 year 6k saved :LOL: :oops:

Winner WInner remoska dinner

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Jul 6, 2009
291
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It’s not a case if you have to borrow you cant afford it.did everyone on here pay cash for their home, or a new car. (I understand houses may increase in value against a car or motorhome)
I would look at the pro’s and con’s, as said if you borrow money on a depreciating asset what is the real costs. How often will you use it, what would you normally spend on holidays if you did not have a motorhome. Given that by the time you may have saved up enough to use it will you be fit enough to use it. If you can set aside the amount to finance it and run it without compromising the other outgoings you have go for it. Shop around for rates of interest, including re mortgage and if you are comfortable go for it and enjoy.
 
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Oct 29, 2019
156
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Since 2009
I borrowed from my bank to part-fund mine, HSBC gave us a rate of 3.4% for £7500.
I only borrowed over 5 years as I thought, through experience that after 5 years I'd be likely to sell it.
I chose to borrow as I knew I could afford the repayments and if shit hit the fan I could sell it to pay back what I borrowed.
If I were to wait till I could "afford" the van then my kids would be grown up and not interested in family touring holidays, life is short and only you know what you can reasonably afford!
So long as you work out your finances and put a contingency in place I see no problem in borrowing (a little)

Happy Camping!
 
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OP
R

RAS

Jan 19, 2021
6
9
Worcestershire
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78,870
MH
VW Campervan
Exp
Since 2013
Thank you for the replies and input. It certainly looks to be a challenge as to the best route and this remains to be my first stumbling block to being a serious buyer and not just dreaming.

I would sell my existing campervan but that is only going to provide a reasonable deposit of £10K or so.

Right now there seems to be such a substantial gap as to the availability of used motorhomes that are not too old and not camper vans. Whether it will change when lockdown restrictions ease and a new norm is evident so releasing more onto the market as people go back to holidays abroad.

So if it were to be a purchase it seems to be something finance for £45K+ and that is for a used MH!

The MH still depreciates the same whether it is via cash or finance. The trick with finance is to get a deal that is comparable with having the cash invested and the return it gives.

I am spending many hours searching MHs for sale, testing the finance and re-evaluating our requirements.

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Sep 1, 2019
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Start off with one you can afford with your present budget. Over the next couple of years pick a figure and save monthly the money you would have paid on finance and use this to upgrade to a newer one when you're ready. This way you're paying yourself the interest and you'll probably accrue more than your van looses in depreciation. Just an idea.
 
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Tombola

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Nov 21, 2020
654
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We did the opposite when kids were young, bought a real cheap tugger used it for 2 years or so while we saved up money to take them on the "dream" hol to disney orlando (dream at the time but i soon got sick of the sight of mice :LOL: )
and off we trotted to florida with the money we saved by caravanning for a few years.

Now Im razzing round in a MH...and love it ...go figure

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Mar 23, 2012
5,441
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sleights
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We had some savings and took a small amount of tax free allowance from personal pension.
We are lucky we have no mortgage or any other debt and I have upped my pension payments to make up for what was taken out.
I suppose it depends on personal circumstances If the kids were still at home and we still had a mortgage then maybe we would have held off.
We also no longer take expensive foreign holidays and happier just trundling around in the van! 👍
Thats probably a good way to fund it no interest and if your earnings allow tax relief on the extra pensions contributions.
 
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Jan 27, 2018
678
568
Northampton
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52,151
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Rapido & Bongone
Although i'm of the i dont personally do loans persuation and paid cash for a new motorhome i dont expect everyone to do the same and sorry cant help on best rates. But a word of caution
Sh!t happens 20yrs ago i bought a new penine folding camper (took balence to zero but stiil viable ) 2 weeks later on way home from holiday auto gearbox dies, not financialy viable new car (max out on available loan) no problems still financialy viable . Another 2 weeks pass, 2nd car ripped apart by debris on motorway, repairable but will fail mot. Got around not being able to get a loan by using overdraft.
When looking for mh be really comfortable with the dealers reputation for sorting problems. A depreciating asset, problems with a dealer that doesnt care, sh!t happens. AND i'm an optimist.

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Jim

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Jul 19, 2007
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1
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Since 1988
Dear members,

As a VW Campervan owner looking to upgrade to a motorhome, could I please ask and I am not looking for any personal details.

Purely for my benefit and hopefully this is not taken as being too intrusive or rude. I am looking to understand how I go about funding such a large investment as a motorhome.
Could I please ask the members as to how you have financed their motorhome purchase and whether you would do the same again.
If it was via financial loans or lease purchase then which finance organisation did you use, rate did you get?
Was it via the MH dealer or done separately?
The interest rates quoted by some brokers is as high as 8.9% which puts a lot on a loan over 10 years.
If you would prefer to share information but not on a general thread then please do make contact on a private conversation.

Maybe don't borrow as much. £20,000 will buy you an old but very good motorhome that you could keep for three years and sell for around, £20,000 (y). I guarantee that you'll be as excited in that first week away in it as the first owner was 15 or 18 years ago. (y)
 
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Kannon Fodda

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Almost a N00B !
I bought new, effectively fully financed, half on the mortgage, half on a 7 year Black Horse HP. I took the view that being single with no dependents I'd much rather be able to have access to something I enjoy now, rather than go without for many years in the hope I'd eventually have finally saved enough (never going to happen I always spend whatever I can get my hands on).

My mortgage is one of the flexible types, effectively my current bank account is my mortgage and thus a horrible sized overdraft that in theory gets reduced when salary goes in and hopefully if you keep your spending down, you pay it all off quicker. But effectively you have a large credit limit secured against the value of the home. I didn't want to take the mortgage right up to the limit, so I'd still have headroom for other contingencies and to do stuff to improve the house. In my case, as I've been here so long my loan to overall house equity is less than a sixth. I could pay it all off tomorrow using the 25% lump sum from pension plans. Meanwhile the growth on the pension has far outstripped the interest rate on the mortgage.

The HP loan (advised against a PCP type plan as I was putting so much equity into the van outside of the HP) I chose 7 years as I'd figured the van would be a reasonably long term purchase. Even with depreciation, the PVC will be worth more than the debt. Contrary to the MHF rule of thumb that it takes 3 MH's to find the right one, this is my only van purchase, I spent some time working up to the layout I wanted, and whilst the eventual decision to buy was effectively made in 3 hours at the NEC, I'd spent over a year looking around, getting ideas, and dithering. I don't expect to change it until I've worn it out, or after retirement when inevitably my expectations would change. Meanwhile I did clarify that I could pay off the HP more quickly if desired. The HP has a higher interest rate than the mortgage, but is still outperformed by the pension (even when I'm now making negligible contributions to the pension), and the 25% pension lump sum would cover both HP and mortgage if needed.
 
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mikebeaches

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Apart from a house mortgage when younger, I have always steered clear of buying anything on credit.

I've tried to 'cut my cloth' according to what I could afford. And at the same time, built up a 'rainy day fund' for emergencies eg losing job, unexpected expensive vehicle repairs etc.

This is an entirely personal opinion, but many folk these days seem to get themselves unnecessarily financially exposed. Who would have thought a year ago the personal devastation (health and wealth) caused to so many by the coronavirus. :unsure:

So yes, always buy without finance. Car and motorhome dealers look askance, but of course it means they are not going to get any loan commission. ;)

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