With the holiday season fast approaching, millions of Australians are more excited than ever to get away.
One of the most popular holiday options in recent years has been heading off in a caravan or camper for a road trip.
Before going out and buying a caravan or camper, it’s well worth thinking about how you’re going to finance it. Given that a caravan or camper are normally the second largest purchase most people will ever make – after the family home – it’s wise to have things organised well in advance.
Typically, those looking to purchase a caravan or camper have a range of different options. While some people will pay cash, the vast majority will look to finance the purchase with some form of loan.
The types of loans that are on offer can be similar to car loans, with the most attractive options normally loans that are secured by the caravan or camper itself. However, there are a number of choices including unsecured loans and personal loans.
For people that are unfamiliar with the finance process, they might go directly to the dealer and look to obtain finance that way. However, there can be several limitations if you’re only speaking to a dealer for your finance.
Dealer vs Broker
While the finance process might be quick if you speak to a dealer, it could end up costing you more in the long run. Dealer’s will likely not be looking to get the best deal for you and will often only work with a specific lender.
If you talk to a broker beforehand, they will be able to assist you in finding the best deal suited to your needs, as they have access to a panel of lenders. At the same time, a broker will also be able to look at your personal situation and explore the best finance options that include other considerations, like your mortgage.
If you have a home loan already in place, then it could be possible to redraw or even refinance in a bid to use some of the equity. It might even be possible to obtain a lower rate if you’re using your home loan.
There are also other levels of flexibility that you can explore with the financing of your caravan or camper, such as having a balloon payment. A balloon payment allows you to have lower ongoing payments and then make a large one-off payment at the end of your loan. However, this might end up costing you more in interest.
The other advantage of looking to obtain finance through a broker is that you can organise a preapproval well in advance. That gives you the peace of mind that when you go out and start looking, what you’re buying is well within your budget.
Obtaining finance for your new caravan or camper doesn’t have to be difficult, but it’s worth speaking to a broker to assess your options well in advance.