Guide to Financing a Motorhome

Guide to financing a motorhome

More Australians are hitting the road in style, making recreational vehicle sales brisk in recent years. Buying a new caravan or a motorhome can be expensive, and motorhome ownership is a lifestyle change leading to years of monthly payments, maintenance costs and other expenses.

motorhome at lookout


The key to being satisfied with your recreation vehicle lies in making sure the purchase fits comfortably into your budget. Consider the following points when looking at financing a motorhome.

Choosing a loan/lender

Check with several lenders including dealerships as many dealerships also can choose a finance partner to help meet your needs.

Financial institutions often view motorhome buyer as reliable and motorhome loan terms and monthly payments are often consequentially more flexible compared to other types of loans.

Most lenders offer flexible financing terms including a shorter finance term with a higher payment while others may choose a longer term with lower payments.

Motorhomes can range from tens of thousands to hundreds of thousands of dollars, which is why another strategy is to start small and work up to a larger motorhome. By purchasing a lower-priced model you can easily pay off, one could trade it in for an improved model down the road.


motorhome finance contract


Terms and Contracts

Understanding the terms of the financing contracts can be overwhelming when shopping for a motorhome as many factors affect which loan will work best for you.

Motorhome loan repayment terms can be between 10 to 15 years, but many lenders will extend the term up to 20 years for bigger loans. E.g. Most lenders require a 20% down payment on loans over $100,000.

Often buyers choose the longest available loan term with the lowest monthly payment and pay off a little more than the given amount each month to lower the effective interest rate and significantly shorten the length of the loan.

With flexible motorhome finance terms, buyers can also consider paying it off entirely before the loan term is up.


Credit History

Your credit history might affect your loan; it’s worth reviewing your credit beforehand to find any mistakes in your finance history and correct them before applying for a loan as the lender will run a check.

Motorhome loans also tend to draw slightly higher rates than car loans do, because a motorhome isn’t a “need” and is a lower priority than a mortgage.


Mistakes to Avoid

Motorhomes depreciate from brand new rapidly so don’t get locked into a loan for a considerable amount of time with an outstanding balance.

Factor in the overall cost of ownership including; Monthly payments, Maintenance fees, Any expenses to store the vehicle, Insurance, Taxes, Fees, and Warranties.

Interest rates can vary on a motorhome, and any loans with a 20-year term can make a motorhome seem much more affordable than it actually is. A small difference of even just 0.25% can be a lot of money over the long run.


family camping trip


Motorhomes are as traditional as it gets when it comes to Australian domestic travel. There are many fantastic locations nearby, and motorhome or caravan can help you visit them all.

Secure the finance you and your family need to give yourself an extra range of holiday opportunities.

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