Motorhome MONEY MATTERS

Looking to finance your next 'van purchase? John Sootheran outlines your options

The touring lifestyle offers one of the best investment returns around: not necessarily in terms of cash, but in more freedom, greater pleasure – and priceless memories.

But this is still a major investment, whether you’re a first-timer or you are part-exchanging. Choosing carefully how to finance your purchase could save you a small fortune.

The options include using savings, a personal loan, personal contract purchase (PCP), hire purchase (HP), personal contract hire (PCH), or a dealer/broker finance package.

The key to getting the best deal is understanding the ways to pay.

If you have enough cash in the bank to purchase your ’van outright, that will almost certainly be the cheapest way to buy, so let’s begin there.

Paying in cash

With most new ’vans costing north of £50,000, cash purchases typically occur when a buyer gets a substantial boost to their financial situation, such as an inheritance.

However, cash sales might also be funded by borrowing against the equity in a property, or using a tax-free lump sum from a pension fund, once they’ve reached 55 years of age.

Whatever the source of the money, paying in one hit means you won’t be charged interest, making this the cheapest option over the long run.

There was a time when cash was king for large purchases, although that seemed to end when vendors discovered they could generate significant revenue from arranging finance deals for their customers.

If you’re in the fortunate position of being able to pay cash, you still need to make that payment securely. Always pay by bank transfer or banker’s draft.

Motorhome finance