One of the things uppermost in many potential motorhome buyers’ minds is just how to try and find a great finance deal.
In these days of relatively easily available finance, that shouldn’t be a major challenge. Occasionally though it can be and that is why some of the following points might be worth taking note of.
Your personal financial position
The first point worth making is that at the time you apply for your motorhome finance, there may be certain things that you can’t do much about. That would typically include things such as:
- your income and expenditure figures, plus the ratio between the two;
- your credit scoreand personal financial history;
- the amount of finance you are seeking and how much of your own money you have available to put into the deal.
All of these things may influence both how easily you are able to obtain motorhome finance and the price you may have to pay for it.
However, not all potential providers of funds rate these sorts of things with the same importance. For example, some may see relatively modest issues on your credit history files as meaning nothing. Others may take them more seriously.
That means asking lots of questions of the potential providers you have in mind.
Speak to the right people
For some lenders, motorhomes will be classified as a “luxury item”.
What that means is that typically some of the more risk-averse providers might see them as slightly risky lending propositions. If so, they might perhaps increase their pricing accordingly.
By contrast, specialist providers of motorhome finance will inevitably have seen your situation and others like it many times before. They will know the motorhome market inside out as it is their main business sector and therefore not have any particular reservations about the nature of a motorhome versus say a car loan.
Speaking with a specialist might, therefore, be advantageous.
Think carefully about paying with your own funds
It is not unusual to encounter first-time motorhome buyers who are using something like an inheritance or early pension release as their method of funding.
There is nothing fundamentally wrong with that but a little caution might be required because it is not always the most efficient method of funding your purchase. For example, once your money has left your bank account, it has become tied up in an asset. That means you might not be able to access your money quickly if you needed cash for an emergency.
Remember too that needing to sell something in a hurry because you need the money to deal with a crisis isn’t necessarily a position that’s likely to yield the best sale price.
Manage risk perceptions
In finance, typically almost anything lenders perceive as being higher risk will mean that your cost of borrowing will go up too.
This can also be relevant in terms of the motorhome you select. That’s because some will have lower depreciation (better value retention) over time than others, meaning that the risk for the lender is likewise typically reduced.
That also explains why some lenders might not lend on a vehicle that’s more than a specified number of years old.
In the most general terms, this means that proportionally you may find it easier to obtain motorhome finance and attractive deals on new or nearly new motorhomes than on those which are perhaps now pushing definitions of “vintage”!