Motorhome Finance: Your 2025 UK Guide

Why This Guide Matters

For many, a motorhome represents freedom—the chance to explore the UK and beyond at your own pace. However, few buyers can afford to pay outright. That’s where finance comes in. As the market evolves, so do the products and providers, making it essential to understand your options before committing. This guide demystifies motorhome finance, helping you avoid costly mistakes and navigate the process with confidence. Whether you’re a first-time buyer or upgrading, we break down the details so you make choices that fit your budget and long-term plans.

The Basics Explained

Motorhome finance comes in several forms, each suited to different needs. The two most common are Hire Purchase (HP) and Personal Contract Purchase (PCP). HP involves an initial deposit and regular monthly payments; ownership passes to you at the end. PCP also starts with a deposit and offers lower monthly payments, but there’s a large final “balloon” payment if you wish to own the vehicle. Alternatively, you can return or part-exchange the motorhome at the end.

Personal loans, whether secured or unsecured, offer another route. Here, you own the vehicle immediately, repaying the bank or lender directly. Mortgage redraws or equity release allow you to borrow against your property, but this carries significant risk and should be considered carefully. Finally, broker and dealer finance packages can provide tailored options based on your individual circumstances.

Finance calculators, available from most major providers, help estimate monthly payments, interest, and total cost, making comparison straightforward. Eligibility is usually based on age (18+), UK residency, credit history, and proof of income.

How It Affects You

The finance product you choose will shape your monthly commitments and long-term costs. HP typically means higher monthly payments but straightforward ownership at the end. PCP offers flexibility—keep the motorhome, hand it back, or upgrade—but be mindful of mileage limits and the large final payment. Personal loans provide immediate ownership and can sometimes be more flexible, especially if you plan to sell or modify your motorhome.

Your credit score plays a pivotal role in determining the rates available to you. A stronger credit history can unlock lower APRs, while those with weaker profiles may pay more or face rejection.

Vehicle age restrictions apply: for HP, the vehicle is usually no more than 19 years old at agreement start; for PCP, vehicles must often be under 61 months at agreement end. Deposit requirements are typically 10%, though some brokers offer no-deposit deals.

The application process includes a hard credit check, affecting your credit score, and requires documentation such as proof of ID, address, and income. Approval times can be swift, with some providers offering instant decisions online or in dealerships. Remember: missing payments can lead to repossession of the vehicle and harm your credit profile.

Our Approach

At Kandoo, we act as a broker, partnering with a wide range of UK lenders to find finance options tailored to your situation. Our process is transparent and designed to put you in control:

• Wide panel of lenders: We work with over 50 funders, increasing the chance of approval and competitive rates.
• Personalised service: Our advisors guide you through each step, ensuring you understand the terms, risks, and benefits.
• Eligibility checks: We assess your credit profile, income, and requirements to match you with suitable products, including off-prime options for less-than-perfect credit.
• Simple application: Apply online or over the phone, with clear guidance on the documents needed—proof of address, ID, employment, and deposit.
• Finance calculators: Use our online tools to compare products, estimate monthly payments, and see total interest costs before committing.
• Regulatory compliance: We are FCA-authorised, and all our partners adhere to strict UK financial standards. Staff are SAF Approved, ensuring you receive informed, responsible advice.

Our ethos is to help you finance your motorhome responsibly, focusing on affordability and clarity. We’ll disclose any commissions or relationships with lenders, and you’re never under pressure to proceed.

Before You Decide

Motorhome finance is a significant commitment. Before signing a contract, consider:
• Total cost: Don’t just focus on monthly payments—calculate the total repayable over the term.
• Ownership goals: Do you want to own the motorhome at the end, or is flexibility more important?
• Deposit and fees: A larger deposit reduces monthly costs and overall interest. Watch for arrangement or purchase fees.
• Early settlement: Check if you can repay early without penalty, and what rebates (if any) apply.
• Mileage and usage: For PCP, be realistic about annual mileage to avoid excess charges.
• Insurance and running costs: Finance providers usually require comprehensive cover. Factor in ongoing expenses and maintenance.
• Provider credentials: Only deal with FCA-authorised brokers and lenders. Use the [FCA Register](https://register.fca.org.uk/) to check.

If in doubt, seek impartial financial advice. It’s better to ask questions now than face surprises later.

What’s Real, What’s Hype

Motorhome finance advertisements often highlight low monthly payments, nil deposit deals, or instant approvals. While these offers exist, always read the small print. Low payments may mean longer terms and higher total costs. Nil deposit deals can increase the interest you pay. Instant decisions are usually subject to status and further verification.

Remember: If something sounds too good to be true, it probably warrants a closer look. Always compare the total amount payable and understand the obligations before signing.

Pros & Cons

Pros:
• Spread the cost of your motorhome, preserving savings for other needs.
• Access to new or higher-spec vehicles.
• Flexible products (PCP, HP, loans) to suit various budgets.
• FCA regulation offers consumer protection.

Cons:

• Interest increases the total cost compared to cash purchase.
• Vehicle may be repossessed if you miss payments.
• Credit checks can impact your score.
• PCP includes mileage/condition restrictions; balloon payments can be substantial.

Other Options to Consider

If traditional HP or PCP doesn’t fit, consider:
• Personal Loans: Unsecured loans from your bank may offer flexibility and immediate ownership, though rates depend on your credit score.
• Remortgage or Equity Release: Using property equity can unlock larger sums, but puts your home at risk if repayments are missed.
• Brokered Finance: Brokers like Kandoo, Motorhome.Finance, or Zuto can access a wider lender panel, increasing your chances of approval and competitive rates.
• Cash Purchase: If you have sufficient savings, this is the cheapest route—no interest or finance charges, and immediate ownership.
• Dealer Schemes: Some dealers offer special buy-back or upgrade schemes, which may suit those who plan to change vehicles regularly.

Carefully weigh each option’s risks, costs, and benefits against your financial situation and long-term plans.

FAQs

What is the difference between HP and PCP? HP leads to outright ownership after the last payment; PCP offers lower monthly payments and flexibility at the end, but a large balloon payment is required if you want to keep the vehicle.

What APR should I expect? Most agreements fall between 7.9% and 11.9% APR, depending on your credit status and the lender.

Do I need a deposit? Typically 10%, though some brokers/dealers offer no-deposit deals. Larger deposits reduce monthly payments and interest.

Can I get finance with a poor credit score? Some lenders offer “off-prime” finance, but rates will be higher and approval is not guaranteed.

What vehicles can I finance? Most providers finance new and used motorhomes, campervans, and sometimes caravans or tow cars. Vehicle age restrictions apply.

What happens if I want to settle early? You can usually settle early and may be entitled to an interest rebate. Check your agreement for details.

Are there fees at the end of the agreement? PCP may include purchase, excess mileage, or condition fees. HP typically has a small purchase fee.

Will applying affect my credit score? Yes, a hard credit check is required and will appear on your credit file.

What documents do I need? ID, address history (usually 3 years), proof of income/employment, and driving licence. Sometimes proof of deposit.

Is insurance required? Yes, comprehensive insurance is generally mandatory for financed vehicles.

Next Steps / Call to Action

Ready to explore your motorhome finance options? Use our online calculator to see what fits your budget, or contact our FCA-authorised advisors for tailored, obligation-free advice. Remember: informed decisions lead to confident journeys—on the road and in your finances.