Hire purchase (HP) is the most common way to finance a motorhome. It works like car HP, but the amounts are bigger and the terms are longer, often up to ten years. That makes the length of the agreement one of the most important decisions you’ll make.
In short
With motorhome HP, you pay a deposit and fixed monthly payments, and the motorhome is yours after the last payment. Terms can run for up to ten years, which lowers the monthly payment but greatly increases the total interest, so compare the total amount payable on different terms.
What is motorhome hire purchase?
HP works the same way for motorhomes as for cars. The lender owns the motorhome until the final payment, then ownership passes to you. HP is available on new and used motorhomes, subject to the lender’s age limits.
How motorhome HP works
- Agree the price of the motorhome.
- Pay a deposit, often 10% to 20%, in cash or with a part-exchange.
- Choose a term, from one year up to around ten, depending on the lender and the motorhome’s age.
- Make fixed monthly payments.
- Own the motorhome after the final payment.
- Deposit£12,000 upfront
- Monthly payments120 × £596.58
- Own the motorhomeAfter the final payment
- £12,000Deposit14% of total
- £71,589Monthly payments86% of total
- NoneFinal paymentMotorhome is yours
Total you pay: £83,589, including £23,589 interest.
Worked example
A motorhome costs £60,000. You pay a £12,000 deposit (20%) and borrow £48,000 over 120 months (ten years) at an illustrative APR of 8.9%. Your monthly payment would be about £596.58, and the total you’d pay, including the deposit, would be about £83,589. These figures ignore fees and are not a quote.
How the term changes the total cost
| Term | Monthly payment | Total payable | Interest |
|---|---|---|---|
| 5 years (60 months) | £986.10 | £71,166 | £11,166 |
| 10 years (120 months) | £596.58 | £83,589 | £23,589 |
Both use the same £60,000 motorhome, £12,000 deposit and illustrative 8.9% APR. The ten-year term costs about £390 less a month but more than twice as much in interest. These figures are illustrations, not quotes.
If you want lower payments without a ten-year term, lease purchase is another option. Over five years with a £20,000 final payment, the same motorhome would cost about £717.83 a month, but you’d need to pay or refinance the final payment at the end.
Pros and cons of motorhome HP
Pros
- You own the motorhome at the end, with no large final payment
- Long terms make monthly payments more manageable
- No mileage limit
- Available on new and used motorhomes
Cons
- Long terms mean much more interest overall
- Motorhomes lose value, so you may owe more than it’s worth for years
- Larger deposits are often expected
- You don’t own it until the last payment
Your rights on a motorhome HP agreement
Personal HP agreements are regulated by the Consumer Credit Act. You can settle early at any time, usually with a rebate of future interest, and once you’ve paid half the total amount payable, you can end the agreement through voluntary termination, provided the motorhome is in reasonable condition. On a long agreement, it can take several years to reach the halfway point.
Motorhome HP FAQs
What’s the longest term for motorhome HP?
Often up to ten years, depending on the lender. Lenders also limit how old the motorhome can be at the end, so older motorhomes may only qualify for shorter terms.
Can I sell a motorhome that’s on HP?
Not until the finance is settled. Get a settlement figure from the lender, pay it off, then sell. A dealer can settle the finance for you if you part-exchange.
Should I choose the longest term to keep payments low?
Only if you need to. A longer term can more than double the interest you pay. Choose the shortest term you can comfortably afford, and check you can still afford the payments in later years.