Lease purchase is the usual way to lower the monthly payments on a motorhome. It works like hire purchase, but part of the cost is held back as a final payment, and you own the motorhome once that’s paid. It’s offered by many of the lenders that finance motorhomes, and it’s often a better fit than PCP, which is only offered on some new models.
In short
Motorhome lease purchase is hire purchase with a large final payment, sometimes called a balloon. You pay a deposit, lower monthly payments, then the final payment, after which the motorhome is yours. The final payment is compulsory and isn’t guaranteed, so if the motorhome is worth less than you owe, you still have to pay it.
What is motorhome lease purchase?
Despite the name, lease purchase isn’t a lease. It’s a form of hire purchase: the lender owns the motorhome until the end, then ownership passes to you. The difference is that a lump sum is held back from the monthly payments and paid at the end, which lowers what you pay each month. It’s the same product as balloon HP on a car.
Lenders including Paragon and Creditplus offer lease purchase on motorhomes, often over two to five years. The final payment is usually set from the motorhome’s age and how many miles you expect to do.
How motorhome lease purchase works
- Agree the price of the motorhome.
- Pay a deposit, often 10% to 20% on a motorhome.
- Agree the final payment with the lender, based on the motorhome’s age and expected mileage.
- Make fixed monthly payments over the term.
- Pay the final payment, and the motorhome is yours.
- Deposit£12,000 upfront
- Monthly payments60 × £717.83
- Final payment£20,000, then the motorhome is yours
- £12,000Deposit16% of total
- £43,070Monthly payments57% of total
- £20,000Final payment27% of total
Total you pay: £75,070, including £15,070 interest.
Worked example
A motorhome costs £60,000. You pay a £12,000 deposit and borrow £48,000 over 60 months (five years) at an illustrative APR of 8.9%, with a £20,000 final payment.
- Monthly payment: about £717.83, around £268 less than five-year HP
- Total including the deposit and final payment: about £75,070, around £3,904 more than five-year HP
These figures ignore fees and are not a quote.
Lease purchase vs HP vs PCP on a motorhome
| HP | Lease purchase | PCP | |
|---|---|---|---|
| Final payment | None | Compulsory | Optional |
| Guaranteed by the lender? | Not applicable | No | Yes |
| Own it at the end? | Yes | Yes, after the final payment | Only if you pay the final payment |
| Mileage limit | None | Usually none, but affects the final payment | Yes |
| Availability | New and used | New and used, subject to age | Some lenders, mainly new |
PCP on a motorhome works like car PCP, with a guaranteed final payment you can choose not to pay. It’s less widely offered: one major lender, for example, offers motorhome PCP over one to five years, with the motorhome typically no more than five years old at the end and up to 8,000 miles a year (Black Horse). For older motorhomes, or if you plan to keep it, lease purchase is usually the alternative.
Who lease purchase suits
- You plan to keep the motorhome. You own it at the end, so it suits people who want to keep it long term rather than change it every few years.
- You want lower monthly payments without stretching HP over eight or ten years.
- You have a plan for the final payment, such as savings, refinancing or selling the motorhome.
Motorhomes can hold their value well, but that isn’t guaranteed. Before you agree, think about what the motorhome might be worth at the end, and how you’d pay the final payment if it’s worth less than expected.
Pros and cons of motorhome lease purchase
Pros
- Lower monthly payments than HP over the same term
- You own the motorhome after the final payment
- Usually available on new and used motorhomes
- Avoids the very long terms needed to get HP payments down
Cons
- More interest overall than HP over the same term
- The final payment is compulsory and not guaranteed
- If the motorhome is worth less than the final payment, you carry the loss
- It takes longer to reach the halfway point for voluntary termination
Your rights on a lease purchase agreement
Personal lease purchase agreements are regulated by the Consumer Credit Act, like HP. You can settle early at any time. You also have the right to voluntary termination once you’ve paid half the total amount payable, but the final payment counts towards that total, so with a large final payment you may not reach the halfway point until late in the agreement.
Motorhome lease purchase FAQs
Is lease purchase the same as a lease?
No. You own the motorhome after the final payment. With a lease, you hand the vehicle back at the end.
Can I refinance the final payment?
Often, yes. Some lenders will let you refinance the final payment into a new agreement, but it adds more interest and depends on the motorhome’s age and your circumstances at the time.
Is lease purchase better than PCP for a motorhome?
It depends. PCP’s guaranteed final payment protects you if the motorhome loses value, but it’s only offered on some newer motorhomes and comes with mileage limits. Lease purchase is more widely available and suits people who plan to keep the motorhome.
Which costs less overall?
Usually standard HP over the same term, because you clear the balance as you go. Lease purchase costs more in interest because you’re borrowing the final payment for the whole term.