Camping, caravanning, or just hitting the road in the RV, whatever it is you do to take advantage of the great outdoors, it’s not what you would call cheap. Sure you save by not paying for flights and fancy hotels but getting all that gear for weekend road trips to the mountains can be a costly business. Thankfully there’s one way you can get on the road for less – finance.
Why finance when I have savings?
Maybe your dad always told you to pay cash up front for everything, but we’re betting he never had to empty the savings account to pay for an RV or 4X4. Getting behind the wheel of your holiday ride takes a considerable investment, and the best way to minimize your spending is by opting for finance.
Now, the thing is that although it might seem like common sense to pay cash upfront for your new caravan or RV, it’s a huge chunk of cash that is now tied up in four (or more) wheels. Whereas when you opt for caravan and RV finance, you get to keep the majority of your savings for that rainy day when you need cash in a hurry.
Going down the finance route also gives you a bit more spending power when it comes to choosing your new weekend ride. That dream RV that you once thought unobtainable could now be well within your reach and you can possibly even add a few bells and whistles that you couldn’t afford when buying outright.
But it’s another monthly outgoing, right?
Yes, it sure is and of course you would only take on another monthly payment if you could afford it. But the thing is that if you start off with a good sized deposit and add a balloon payment to the end of your loan term, your monthly payments could be quite affordable.
Now we know that the word balloon payment might conjure up a few panicky images in your mind, but the truth is that when you buy a good reliable RV or camper, then you may not want to sell it after three or four years. If you choose to keep it, then you can refinance the balloon payment. If you choose to upgrade, then you can sell or trade in the RV or caravan, pay off the balloon payment and use what’s left over as a deposit on the latest model.
So what’s the catch?
Well, if you count having to pay interest on your loan a catch, then we guess that’s the catch here. Other than that though there really are no other disadvantages to caravan finance. It’s far more cost-effective than redrawing on your mortgage, and it allows you to keep the majority of your savings intact. And with the market now flooded with banks and finance companies all eager to lend you money, the heightened competition means that interest rates and terms are pretty good no matter where you shop with one exception.
Can I get finance at the dealer?
Yes, you can, but this is the one place where you may get a bad deal on your rates. Some dealers will add a little extra to the monthly repayments as their cut of the deal while others will tie in servicing or extras to the finance package limiting your ability to maintain the caravan or RV yourself or to take it to another dealer.
Your best bet is to check with your current bank or get in touch with a finance broker. Your bank is familiar with your expenditure and savings and so should be able to offer you something while a finance broker can source suitable finance packages from a variety of lenders. Either option is preferable to dealer finance and gives you that little bit of an edge when negotiating a purchase price. You will have the money already secured, so you’re free to walk out the door to another dealer.
Contrary to popular belief, finance is a convenient and affordable option for getting you and the family on the road for less while keeping your savings where they belong; in your bank account. So if you’re in the market for a new campervan, RV, or caravan, then consider finance, and you’ll be surprised how your buying options change.
As Australia's largest car finance broker, Stratton Finance know a thing or two about loans and finance. With over two decades of experience in the field they are one of the most trusted authorities in the industry.