Motorhome finance UK: best ways to fund purchase

Having your own motorhome is the perfect way to travel on your own terms and your own timetable, stopping overnight when you like and hitting the road with minimal fuss or prep. But what is there best way to finance a motorhome in the UK?

There’s no getting around the fact that motorhomes are a big purchase, with many people thinking it’s out of their reach. Not necessarily so, as there are finance options available to most! Discover the best way to finance a motorhome in the UK below with our round up of the most common solutions.

Important: We are not finance professionals. This guide is an overview only of possible ways to finance a motorhome in the UK. Please do your own research before entering into any loan or other financial arrangement.

4 best ways to finance a motorhome in the UK

There’s no single best way to finance a motorhome in the UK because it all depends on your situation, needs and preferences. The good news is that there are motorhome financing options to suit most budgets – you don’t have to buy a motorhome outright, or have a hefty deposit to secure a loan amount.

1. Loan

If your credit score is rated as excellent, a personal loan is an effective way to finance your motorhome. You can borrow from your bank or from an independent lender – either way, the finance is subject to factors like your overall income and how much you can afford for monthly repayments. The loan amount is given in a lump sum used to buy the motorhome; after that, you make your monthly payments to the lender.

Where personal loan options differ is in their interest rates and the length of time allowed to pay back the loan (typically from three to 10 years). An interest rate of 3-7% APR is a good ballpark figure to aim at, while if you can afford it, paying back the loan in three to five years will obviously keep your overall repayment costs down.

Check sites likeMoney Supermarket,Compare the Market andMoney Saving Expert to see interest rates at a glance, whether you’re borrowing from a bank or an independent lender. Specialist lenders like Auto Finance Online or car loan sites are well worth a look too, as are supermarkets, AA and the Post Office. Always check with your bank first as they might have special customer rates for loans.

We checked a selection of banks and other providers to find these rates at the time of writing , on a loan payable back over five years:

Lender | Loan amount | Interest rate | Monthly repayment | Total sum to repay

• HSBC | £50,000 | 6.7% | £978.37 | £58,702.17

• Barclays | £50,000 | 7.5% | £996.06 | £59, 763.60

• Auto Finance Online | £50,0000 | 6.9% | £982.79 | £58,697.14

• Halifax | £35,000 (max possible for personal loans) | 5.8% | £670.99 | £40,259.40

• Hitachi | £25,000 (max) | 3.1% | £449.89 | £26,993.40

• Post Office | £25,000 (max) | from 2.7% | £445.53 | £26,731.74

• AA | £25,000 (max) | from 2.8% | £446.60 | £26,796.00

• Sainsbury's Bank | £40,000 (max) | 5.7% | £765.09 | £45,905.40

Always shop around! Remember too that as interest rates fluctuate, it’s best to secure your loan when you find it, and before committing to buy your motorhome.

2. Hire purchase

Hire purchase (HP) works like a mortgage, in that you won’t own your motorhome until your final repayment is made to whichever HP dealer you’ve used. As with personal loans, you’ll need to be at least 18 years old and be a UK resident.

HP loans for motorhomes tend to be payable back between five and seven years, and, like a mortgage, if you default on a payment the dealer can repossess your motorhome even if it’s mostly paid off. This means you need to be 100% sure that your income will remain at least the same during the hire purchase period.

Also like a mortgage, you’ll need a deposit for a hire purchase loan. This is usually 10%, but can vary depending on the length of the repayment term and the size of the monthly instalments.

One of the main motorhome hire purchase companies in the UK isBlack Horse Finance, which also works with motorhome supply companies including Marquis, Webbs, Viscount Leisure and Oaktree Motorhomes. The repayment period is one to 10 years and 0% deposit is available; APRs vary.

Other motorhome hire purchase companies in the UK include :

• [Southwest Motorhomes](https://southwestmotorhomes.co.uk/finance# motorhome-finance) - Representative interest rate of 7.9% on motorhome HP.

• CVSL - Asks for a 10% deposit and offers a contract of one to 10 years (interest rate on application).

• Auto Trader - Offers motorhome hire purchase through finance broker Zuto. A big advantage of this lender is that buyers can search for motorhome finance by postcode.

• Pegasus - Borrow £10,000-£100,000 from 6.8% APR, no deposit.

3. Savings

If you’re looking for quick and easy, then this may be the best way to finance a motorhome in the UK! As most new motorhome owners are retired or semi-retired, they may have a lump sum from savings to use for their new purchase.

If you can afford it, this is obviously the most appealing option – you’ll own the motorhome outright from Day 1 and don’t have to worry about interest rates or repayments! Just make sure you really do have the money to spend on this investment with enough left over to stash away for a rainy day.

4. Equity release

Another option if you own your home is to use equity release, in simple terms an advance loan payment on part of the value of your property. The most popular form of equity release is the lifetime mortgage, where the “loan” is paid back (with interest) only when the property is sold or the policy holder dies.

Learn more about your options with our guide to ' how long can you finance a motorhome? '.

What to consider when choosing the best way to finance a motorhome in the UK

New or used

Your first big consideration is whether to buy a new or a used motorhome, which will of course depend on your budget. Buying a new motorhome means you can take your pick of models and layouts, and have a blank template to customise the motorhome. Zero mileage is always a huge plus too!

Buying used will of course usually cost less, but you’ll have less choice and may not be able to customise the motorhome much if the previous owner has already done so.

If you’re relying on a loan to buy a used motorhome, it’s worth remembering that you might get a lower interest rate with a lower loan amount – for example, Halifax charges 5.7% APR on a loan of £35,000, as above, but this goes down to 3.5% on a loan of £10,000.

Not sure what motorhome to buy? Browse our 2022 guide to thebest motorhomes to buy 2022, and get that wishlist started!

Your credit score

You’ll generally need a good or excellent credit rating for motorhome finance. It’s much easier to secure any type of loan if you’re a homeowner, but if not, options are still available, so check with your lender.

If your credit score is average or poor, finding a loan will be harder, but not impossible. You can build up your score by taking on short-term high-interest credit cards and ensuring they’re paid off fully and in time. Don’t despair if the only loan available to you is at a high APR (e.g. 25%), as regular payments on this may improve your score and open up lower-interest loans. You can then pay the original loan off with a new one.

Maintenance and running costs

When budgeting for your motorhome ownership, make sure to add maintenance and running costs to your overall annual figure. An annual service, checking things like brakes, transmission, engine and suspension, will be around £250-£500 a year depending on the motorhome model. Allow for day to day/trip by trip costs like fuel and gas too, and always have an emergency fund for repairs.

Other motorhome costs

Insurance

From £290 per year upwards. Learn more with our 'How much does it cost to insure a motorhome?' guide.

Tax

Motor vehicle tax or road costs mostly depend on your motorhome’s weight. Expect to pay between £140-£280 a year.

Security

Wheel clamps, steering locks, alarms, storage units… Whatever you use to keep your motorhome safe from theft, it’s essential to factor security costs into your budget. Don’t skimp on this!

Make a return on your investment

The best way to finance a motorhome in the UK depends on all of the above factors and your unique circumstances, so make sure to do your research.

And once you’ve purchased a new home on wheels, getting some of those costs back is always a win! Motorhome owners in the UK can make thousands per year by renting their vehicles out to other adventurers – it’ll save on storage costs too. Read our guide torenting out your motorhome to get started.

Start sharing your motorhome today

Camplify connects owners like you with local and international holidaymakers - all of whom are verified to maximise the safety when you hire out your motorhome. Discover more of our advantages for owners below:

• It's free to list your motorhome.

• If you don’t have all-risk insurance, we can provide you with it when you sign up.

• We give your van a 24/7 RAC breakdown cover.

• You have complete freedom to approve or reject guests interested in renting your motorhome. Your wheels, your rules.

• We provide you with tips and step-by-step guides on how to improve your service and your motorhome to get more and more bookings!

The sooner you set up your listing, the sooner it will start to receive visits and bookings! See how much you could earn if you rent out your motorhome with our free income calculator or sign up now to start enjoying the above advantages today.

If you still have questions, want to discuss your income potential with an expert or get more information on how to list your motorhome, call us on ☎ 0330 808 1811 or visit www.camplify.co.uk.