Financing a motorhome
Author: Your RV Good Guide Date Posted: 14 May 2024
Thinking about getting a motorhome loan so you hit the open roads of New Zealand in your own RV? You're not alone. The freedom and flexibility a motorhome offers is truly unparalleled. But before you start planning your adventures, there's an important aspect to consider: how to finance your motorhome.
In this blog, we'll dive into everything you need to know about motorhome loans, camper financing, and how to find the best RV loans.
Whether you're eyeing a brand-new luxury RV or a more affordable, used motorhome, understanding your camper finance options is key.
We'll also share tips on how to finance your RV, what you need to know about RV loan rates, and what RV lenders look for when you apply for an RV loan.
Difference between a motorhome loan and a mortgage
How to finance a motorhome in NZ
Tips to help you stretch your motorhome buying budget
- Consider buying an ex-rental
- Get extra income from your RV
- Consider joint ownership
- RV loan options
- Trade-in to reduce costs
What is a motorhome loan?
Understanding the fundamentals of motorhome loans is crucial in your journey towards owning a motorhome. Let's break down the key components of camper financing.
1. Interest rates
The interest rate is a pivotal factor in any loan, and motorhome loans are no exception. It determines how much extra you'll pay on top of the borrowed amount.
Rates can vary based on several factors, including the lender, your credit score, and market conditions. It's essential to shop around for the best RV loan rates to ensure you get a deal that suits your budget.
2. Loan terms
Your RV loan terms refer to how long you have to pay back the loan. This can range from a few years to over a decade, depending on the lender and the loan amount. Longer terms might mean smaller monthly payments, but they also lead to more interest paid over time. It's a balancing act between manageable repayments and overall financial efficiency.
3. Credit score impact
Your credit score plays a significant role in the motorhome financing process. It influences not only the likelihood of loan approval but also the interest rates and terms you're offered.
A higher credit score can open the door to the best RV financing options, including lower rates and more favourable terms. It's wise to check your credit score before applying for a motorhome loan to understand where you stand.
Difference between a motorhome loan and a mortgage
If you're contemplating how to finance your motorhome, you might be weighing up the option of a motorhome loan against adding to an existing mortgage. Each choice has its pros and cons, depending on your financial situation and long-term goals.
Adding to your mortgage
Adding the cost of a motorhome to your mortgage can seem appealing, primarily due to the lower interest rates typically associated with mortgages. This option could reduce your monthly outgoings in the short term. However, it's important to consider the long-term implications. Extending your mortgage means you're spreading the cost over a longer period, potentially decades. While this makes for smaller monthly payments, it also results in more interest paid over the life of the loan.
Opting for a motorhome loan
On the other hand, a motorhome loan is a more targeted approach, specifically designed for financing recreational vehicles. An RV loan usually comes with higher interest rates compared to a mortgage but has shorter repayment terms. This means you could pay off your motorhome faster and potentially save on the total interest paid, even if your monthly payments are higher.
Making the right choice
Deciding whether to add to your mortgage or opt for an RV loan depends on your financial priorities. If you prefer lower monthly payments and are comfortable with a longer repayment period, adding to your mortgage could be a viable option. However, if you're looking to clear your debt sooner and potentially reduce the total interest cost, a motorhome loan might be more suitable.
How to finance a motorhome in NZ
As with any sort of loan, financing a motorhome requires careful planning and consideration. Here's a step-by-step guide to help you navigate this process smoothly.
Assess your budget
The first and perhaps most important step in your motorhome financing journey is to thoroughly assess your budget.
This isn't just about the purchase price; it involves a comprehensive look at your financial situation. Start by considering your regular income and expenses. How much can you realistically allocate towards your camper loan each month?
Remember, the cost of owning a motorhome extends beyond the purchase price. You'll need to account for ongoing expenses such as maintenance, insurance, fuel, and site fees if you plan to stay at RV parks.
READ MORE: Are motorhomes a good investment? Your questions answered.
Decide what kind of motorhome you want
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Once you have a clear understanding of your budget, it's time to think about the kind of motorhome that will best suit your needs.
This decision is more than just a financial one; it's about matching your lifestyle and travel aspirations with the right vehicle.
Consider the size of the motorhome. Do you need a compact camper for short, solo trips, or are you looking for a larger, family-sized vehicle for extended holidays?
Think about the features and amenities that are important to you. Do you need a fully equipped kitchen, or is a basic setup sufficient? What about sleeping arrangements and bathroom facilities?
Having a clear idea of your requirements will not only help you determine the appropriate RV financing amount but also guide your search for the perfect motorhome. It's about finding the right balance between comfort, functionality, and affordability.
READ MORE: How to match a motorhome to your lifestyle.
Gather your documents
Preparing your RV financing application is a critical step.
Start by gathering all the necessary documentation. Lenders will typically require detailed proof of your income, such as pay slips or income statements, to assess your ability to repay the loan.
The RV lender will also need your employment details to verify stability and consistency in your income.
Bank statements are crucial as they provide a snapshot of your financial health, including your spending habits and existing commitments.
Additionally, you'll need to provide specific information about the motorhome you intend to purchase. This includes the make, model, price, and any other relevant details that the lender might require.
Having these documents ready and organised will not only expedite the application process but also demonstrate your seriousness and preparedness to the lender.
READ MORE: Everything you need to know to buy your first motorhome.
Tips to help you stretch your motorhome buying budget
Arranging camper finance can be a big step, but with the right strategies, you can make it more affordable. Here are five tips to help you stretch your motorhome budget:
1. Consider buying an ex-rental
Opting for an ex-rental motorhome can be a smart financial move. Ex-rentals, like those from RV Super Centre, are often much cheaper than new models, providing great value for money.
These vehicles are well-maintained, regularly serviced, and come with a documented history, ensuring reliability. Plus, they've been 'worn in', meaning any initial teething problems have likely been resolved.
With an ex-rental, you get the peace of mind of a vehicle that's ready for the road, often accompanied by a 12-month guarantee.
READ MORE: Find out more about the benefits of buying ex-rental motorhomes.
2. Get extra income from your RV
Another aspect to consider is the potential for additional income. Peer-to-peer lending platforms like Camplify offer a unique opportunity for motorhome owners.
By renting out your motorhome when it's not in use, you can generate extra income. This can help offset the costs of ownership and even stretch your budget further.
3. Consider joint ownership
Buying a motorhome with family members or friends and sharing the cost is another way to help reduce the financial burden. This means you get to enjoy the benefits of motorhome ownership at a fraction of the cost. It's important, however, to have clear agreements and understandings about usage, maintenance, and other responsibilities.
4. RV loan options
Explore camper financing options that offer flexibility and suit your budget. RV Super Centre offers a range of tailored RV financing solutions designed to meet the unique needs of motorhome enthusiasts in New Zealand.
These packages are not one-size-fits-all; they're customised to fit different financial situations and preferences.
- In-house finance: RV Super Centre provides convenient, integrated financing solutions, making the process seamless and straightforward.
- $0 deposit on finance available: This option is particularly helpful for those who may not have a large sum saved up for a down payment.
- Flexible and tailored RV finance packages: Whether you're looking for a short-term loan or a longer repayment period, RV Super Centre can accommodate your needs.
- Low establishment fees and same-day approvals: These features make the financing process both cost-effective and efficient.
- Pre-approval: Knowing your maximum lending amount upfront can be incredibly helpful in guiding your motorhome shopping process.
- Low early repayment fees: This offers flexibility if your financial situation changes and you wish to pay off the loan earlier than planned.
5. Trade-in to reduce costs
If you currently own an RV, consider trading it in to reduce the cost of a newer motorhome. Many dealerships, including RV Super Centre, accept trade-ins, which can serve as a significant contribution towards your down payment, reducing the amount you need to finance.
Ready to buy a motorhome with RV Super Centre?
Remember, choosing how to finance your motorhome is a big decision, but it doesn't have to be overwhelming. It's all about striking that perfect balance between what you can afford and the adventures you're dreaming of.
Whether it's a sleek, brand-new RV or a charming, pre-loved camper, understanding your finance options is the key to a smooth journey to ownership.
Feeling excited to check out some motorhomes? The RV Super Centre is your go-to spot. We've got a fantastic range of motorhomes, from snug little campers perfect for two, right up to spacious, family-sized models. Dive into our collection and find the one that's just right for you.
And if you're still wondering about the best way to finance your motorhome, or if you've got any questions, just give us a shout. Our friendly team is always here to help you navigate through the financing options, making sure you find the best fit.
