However, no matter which type of finance option you choose, you will need to complete some background work and research before going ahead with your motorhome finance option. The things you should do before signing any contract include checking your credit score, understanding your best options, shopping around for the best deal, being aware of the total cost of the finance deal, and reading all the paperwork.
Identify the motorhome finance choices open to you
It is crucial that prior to committing to a motorhome finance package you fully comprehend the plus and minus points of each one, and how each finance package will suit your needs and circumstances. Most motorhomes purchased today are either leased or bought via some type of motorhome finance option. These days, people who are considering purchasing a motorhome on finance have several options available to them, these include Personal Contract Hire (PCH) Personal Contract Purchase (PCP) or Hire Purchase (HP). Therefore, it is worth looking at the pros and cons of each of these and any other motorhome finance options rather than committing to the first one that comes along.
Make sure you know the total cost of your finance option
You may find that some finance packages come with enticing low monthly repayment amounts; however, there could well be a sting in the tail with many of these enticing finance plans requiring a sizeable final payment at the end of the agreement. The lowest monthly payment option is not always the best when it comes to motorhome finance. There may well be options where the monthly repayment is higher, but over the length of the agreement it may work out cheaper and have more flexibility. Finally, you should factor in the interest rate and how this will impact the total cost of the plan.
Know your credit score
When applying for motorhome finance, the lender will no doubt assess the risk of lending you the money by checking your credit score. Naturally, the higher your score the better chance you have of seeing your application succeed, whereas if you have a moderate to poor rating you may find it difficult to get the amount of finance you need. In addition to checking your credit score, the lender may also consider your total income as well as any other financial commitments you have. To check your credit score you can use any number of different credit file agencies, such as Experian and Equifax.
Don’t settle on the first finance provider
It is easy to sign up to the first motorhome finance provider that offers you a deal, but it is in your own best interests to shop around. The best way to do this is to first figure out how much money you will put down for the deposit, then work out how much you can afford to repay each month, and for how long. Once you have these figures in mind, you can then shop around to find the best deal from any number of motorhome finance companies, other lenders or your bank.
Above all, be honest
It is imperative that when you complete your motorhome finance application you do so honestly. There may be a temptation to lie or exaggerate certain things in the hope of swinging the application in your favour, but this can end up causing all kinds of problems in the future. If it is discovered that you have lied on your finance application you may find your application is declined, or it may affect your credit score. On a more serious level, you may be deemed to be committing credit fraud, which is a criminal offence.
If you are unsure about anything, ask questions
When it comes to motorhome finance, it is much better to be safe than sorry, as with most credit applications, it can seem confusing at first. When visiting the dealership, make sure you fully understand everything the dealer is saying to you and don’t be shy in asking them to explain again anything you do not understand. If you are still unsure, then there is no shame in asking the dealer to put everything in writing for you to take home and read at your leisure.