Financing your caravan purchase

[Dustydog]

I was shocked looking at a local Dealers web site today.
They are offering a 2006 4 berth motorhome £28k . Their following finance offer is not only unbelievably expensive but for a ten year period . The MH will be nearly 30 years old when the debt is paid up!🙀

Representative example: Annual Interest Rate (fixed) 12.9% p.a., with a representative 12.9% APR, total amount of credit £22,995, deposit of £5,000, repaying over 119 monthly payments of £332.47 followed by 1 payment of £342.47, total cost of credit is £16,911.40*, total amount payable is £44,906.40.

 

[Buckman]

I was shocked looking at a local Dealers web site today.
They are offering a 2006 4 berth motorhome £28k . Their following finance offer is not only unbelievably expensive but for a ten year period . The MH will be nearly 30 years old when the debt is paid up!🙀

Representative example: Annual Interest Rate (fixed) 12.9% p.a., with a representative 12.9% APR, total amount of credit £22,995, deposit of £5,000, repaying over 119 monthly payments of £332.47 followed by 1 payment of £342.47, total cost of credit is £16,911.40*, total amount payable is £44,906.40.

Goodness me and we thought we were being ripped off at 6% APR when we made a large purchase in 2022.

 

[otherclive]

I was shocked looking at a local Dealers web site today.
They are offering a 2006 4 berth motorhome £28k . Their following finance offer is not only unbelievably expensive but for a ten year period . The MH will be nearly 30 years old when the debt is paid up!🙀

Representative example: Annual Interest Rate (fixed) 12.9% p.a., with a representative 12.9% APR, total amount of credit £22,995, deposit of £5,000, repaying over 119 monthly payments of £332.47 followed by 1 payment of £342.47, total cost of credit is £16,911.40*, total amount payable is £44,906.40.

Could be why it is still on the forecourt. 🙈

 

[Dustydog]

Could be why it is still on the forecourt. 🙈

All the stock offers similar terms!..

Madness🤬🤬

 

[GaryB]

Quite a few folks now don’t care about the overall cost or even the loan length, it’s just about paying the monthly “rent” on things. The days of wanting to actually own things are declining. I have been looking at changing my car but some of the dealer finance offers explain why I haven’t changed it!

 

[RogerL]

Quite a few folks now don’t care about the overall cost or even the loan length, it’s just about paying the monthly “rent” on things. The days of wanting to actually own things are declining. I have been looking at changing my car but some of the dealer finance offers explain why I haven’t changed it!

It's often said that car dealers make all their profit on the finance deal, losing money on a cash deal. Maybe this is spreading to the caravan/motorhome industry.

 

[ProfJohnL]

It's often said that car dealers make all their profit on the finance deal, losing money on a cash deal. Maybe this is spreading to the caravan/motorhome industry.

Far from a lie...

 

[Buckman]

It's often said that car dealers make all their profit on the finance deal, losing money on a cash deal. Maybe this is spreading to the caravan/motorhome industry.

Isn't there a movement challenging this due to dealers preferring to offer finance at a higher rate putting the consumer at a disadvantage. I think Martin Lewis has something about this?

 

[Beachball]

Quite a few folks now don’t care about the overall cost or even the loan length, it’s just about paying the monthly “rent” on things. The days of wanting to actually own things are declining. I have been looking at changing my car but some of the dealer finance offers explain why I haven’t changed it!

Where we got my wife car we were offered 0% interest for 4 years but we wanted to pay cash that was our preferred choice .

 

[otherclive]

It's often said that car dealers make all their profit on the finance deal, losing money on a cash deal. Maybe this is spreading to the caravan/motorhome industry.

When we bought our last car in 2022 the dealers that we visited were all pushing PCP very hard. In the end we found one that gave a good trade in better than websites predicted and a discount on advertised price, and new mats and mud protectors all around.


PS The car was one year old so Kia reinstated the full 7 year warranty up to 100k miles (it had done less than 4K miles) plus nav and infotainment updates for seven years, 2 years RAC full cover , and MoT fail cover too.

 

[otherclive]

Isn't there a movement challenging this due to dealers preferring to offer finance at a higher rate putting the consumer at a disadvantage. I think Martin Lewis has something about this?

It’s the non declaration of commissions that have raised concerns, not the overall process.

 

[Dustydog]

When we bought our last car in 2022 the dealers that we visited were all pushing PCP very hard. In the end we found one that gave a good trade in better than websites predicted and a discount on advertised price, and new mats and mud protectors all around.

PCP is a con in my book. You basically pay a monthly premium which equates to the capital depreciation over say three years. Then give the car back or pay cash for its market value. More like car hire?

 

[Buckman]

PCP is a con in my book. You basically pay a monthly premium which equates to the capital depreciation over say three years. Then give the car back or pay cash for its market value. More like car hire?

A couple of years ago we did investigate PCP and also mobility vehicles, but that is like having a permanent hire agreement and you never own the vehicle.

 

[Beardy]

A couple of years ago we did investigate PCP and also mobility vehicles, but that is like having a permanent hire agreement and you never own the vehicle.

It suits some people. If you like to buy new cars and replace them every 2-3 years so theyre always in warranty the cost for PCP is similar and you don't have the initial outlay (or loan). Hassle free motoring (to an extent) but it comes at a cost.
Historically I've bought cars outright and run them until the ongoing repair costs aren't viable, but I do 90% of repairs and servicing myself. If I couldn't do that I'd consider PCP.

 

[RogerL]

Isn't there a movement challenging this due to dealers preferring to offer finance at a higher rate putting the consumer at a disadvantage. I think Martin Lewis has something about this?

That's because some finance companies allowed dealers to set the interest rate to gain more commission BUT hid this from customers - leading them to think the interest rate was non-negotiable.

 

[Dustydog]

That's because some finance companies allowed dealers to set the interest rate to gain more commission BUT hid this from customers - leading them to think the interest rate was non-negotiable.

Isn’t part of the problem the Dealers Stock Funding Loans? All those Black Horses have to get their pound of flesh from somewhere

 

[Buckman]

Isn’t part of the problem the Dealers Stock Funding Loans? All those Black Horses have to get their pound of flesh from somewhere

We have written to BH regarding a caravan purchased several years ago and the high interest rate at the time. We have also written to Close Brothers regarding the interest rate on a car purchased 6 years ago. Both have acknowledged the emails. Our current caravan when purchased in 2018 the interest rate was a lot lower. Same with current car.