Do you dream of living a life on the open road? How about travelling around the beautiful countryside and moving when the whim takes you? Yes, I thought so, me too. But this pipe dream probably feels too far out of reach to become a reality.
What if I told you that there was a way that you could finance a Camper Van and have this lifestyle in only a few days without putting a penny down? I thought that might get your interest, but surprisingly, it’s true and it’s available to most of us, if only we’d find the time to look into it.
In the following few paragraphs, you’ll discover how to buy a Camper Van on finance, and why many people, me included, are seriously considering doing it.
Is It Possible To Buy A Camper Van On Finance?
As you can probably tell by the introduction, Yes, it is possible to buy a Camper Van on finance. Not only is it possible, but it may just be the best way to buy a Camper Van, depending on your circumstances, obviously.
Before we go any further, I need to clarify something. This post in no way whatsoever should be considered as Financial Advice. I’m not in any way qualified to give Financial Advice, so I don’t intend to.
These are just my findings from the research my wife and myself have done into living our dream life. I thought that the information that we uncovered was well worth sharing, so here it is for your information and entertainment.
As we discovered, there are 4 main ways that you can buy a Camper Van:
- Buy a Camper Van with Savings
- Finance a Camper Van with a Secured Loan
- Finance a Camper Van with an Unsecured Loan
- Buy a Camper Van on Hire Purchase
We’ll discuss buying a Camper Van with savings later, but first let’s have a look at your options for buying a Camper Van with finance.
What Are The Benefits Of Buying A Camper Van With A Secured Loan Over An Unsecured Loan
Firstly let’s explain what a Secured Loan and an Unsecured Loan are.
A secured loan is a loan where the amount of money that you borrow is secured (guaranteed) by the value of either the asset that you buy (the Camper Van) or another valuable asset (possibly your house). If you don’t pay back the money that you borrow, the lender has the ability to recoup their money by taking the secured asset off you in lieu of payment.
With an unsecured loan, the money that you borrow is not covered by the value of an asset. If you don’t pay back the money that you have borrowed, the lender will have to seek other legal means to recoup their losses from you.
As you can guess, a secured loan is the preferred way that lenders would like to loan you money. It’s less hassle for them if you default on your payments.
Due to the fact that their money is secured against an asset, lenders will loan you a secured loan on a far better interest rate than they will give you on an unsecured loan.
What Interest Should I Pay To Finance A Camper Van?
I currently live in the UK, so I will give you the representative rates for UK secured and unsecured Camper Van finance deals. A simple internet search will give you the rates for other countries if you need them.
In the UK the current best secured loans for Camper Van finance are between 3% and 7% depending on how good your credit rating is.
The current best unsecured loans that you could use for Camper Van finance are between 9.8% and 13.4%, again depending on how good your credit rating is.
Another way to finance the purchase of a Camper Van, other than taking out a loan is to finance your Camper Van on Hire Purchase. If you buy your Camper Van on hire purchase, you are effectively hiring a Camper Van, monthly, at a higher rate than you would pay for a loan, and the Camper Van belongs to the dealership until the final payment has been payed and the agreement concluded.
I would not consider buying a Camper Van on Hire Purchase as in my opinion all the cards are stacked against you and in favour of the dealership.
The Camper Van won’t actually be yours until the deal is competed some years down the line, and you will pay a lot more in payments and interest than even buying it with an unsecured loan.
How Long Can Camper Van Finance Be Spread Over?
During my research I found that both secured and unsecured loans that can be use to finance a Camper Van are available for between 1 and 10 years with the average being 5 years.
When you are buying anything with finance it is important to remember that the longer period that you take out the finance for, the more interest you will have to pay back on the amount that you borrow.
However, if you borrow money for a longer period, your monthly payments will be lower than if you borrow the same amount of money for a shorter period.
There will inevitably be some fine tuning between the amount of money you wish to borrow, how long you want to borrow it over, and what you would like your monthly payments to be so that you can afford them.
Some rough calculations are going to be required to hit the sweet spot between what you are going to need to borrow and what monthly payments you wish to have, but believe me, it can be done.
Do I Need A Deposit To Finance A Camper Van?
Surprisingly to me, you do not need a deposit to finance a Camper Van. You should be able to take out a loan, secured or unsecured, as well as a Hire Purchase agreement with no money down.
That being said, if you have any sort of deposit, it would be a good idea to use it when financing a Camper Van, as it will reduce the overall cost of borrowing, it will reduce how long you need to borrow the money for, and it will most likely it will reduce your monthly payments too.
Which Lenders Will Finance A Camper Van?
Here in the UK lenders are falling over themselves to help you finance large purchases for vehicles such as a Camper Van.
Here is a list of some of the main players in the UK lending market at the moment sorted from the best (lowest) interest rate down to the worst (highest) interest rate:
- The Post Office
- The AA
- Hitachi
- Sainsbury
- The Halifax Building Society
- HSBC Bank
- Auto Finance Online
- LLoyds Bank
- Barclays Bank
If you are in a country other than the UK, a simple Google search for “Camper Van Finance near me” will bring up your local results.
What Are The Benefits Of Buying A Camper Van With Savings?
The number one, obvious benefit to buying a Camper Van with your savings if you have any savings, is that you won’t have to pay any loan interest and you won’t have any regular monthly repayments to fork out.
However, spending all of your savings might not be the best idea if you are planning to live on the road for the first time. You never know what sudden emergency could come along that you are going to have to pay for, right there and then. It is always wise to keep some sort of Emergency Fund on hand.
I have a book called “Total Money Makeover” written by Dave Ramsey that has literally changed my life since I first read it and put the lessons into action. You can find out more about this amazing book on Amazon here.
One of the rules that he advises is to always have at least 6 months of your income, or what was your income if you are retired, readily on hand as an emergency fund.
I never have quite that much, as I have a habit of spending some as soon as the amount I have saved becomes significant, however, it is sound advice and worth heeding.
Are Camper Vans A Good Investment?
The answer to this question can be Yes and No. Some Camper Van’s can be a really good investment. Camper Vans such as rare, Split Screen VW T1 Camper Vans, if they are well looked after seem to only go up in price year after year as they become even rarer.
However, buying a standard, mass produced model of a more general, less sought after type, one that deteriorates in condition and price due to lack of demand is obviously not as good of an investment.
Something to consider though, is that if you take into account the money that you have saved on rent or mortgage payments, and offset that cost against what you paid for your Camper Van if you actually live in it, you may actually be in a far better financial position than you were when you first bought it, and it will probably have some sort of sell on value, even if it is less than what you paid for it.
Can I Live Permanently In My Camper Van?
As far as I have been able to find out, Yes, you can live in a Camper Van permanently in the UK, the USA, Canada, Australia, Spain and most other countries that I came across in my searches.
You are probably (almost certainly) going to need some form of “Care of” address for any official government documents to go to, such as pension, tax and insurance correspondence.
Most companies will accept a PO Box or at least the address of a willing family member or friend if you let them know that you are planning a life “on the road“.
Can I Save Money By Living In My Camper Van?
Even with the absolutely ridiculous price of fuel at the time that I write this, you can save an absolute fortune by living in a Camper Van.
I actually did some rough calculations recently for myself, my wife, my daughter and our 3 dogs to buy and live in a Camper Van for a couple of years and the savings were actually astronomical.
I understand that living in a Camper Van permanently, or semi permanently (several months a year), isn’t for everyone, but it may just be worth your while trying it, especially if you are close to being in financial difficulty.
I’ll just highlight some of the costs you will save against some of the new costs you will incur from the list that we made. I won’t include actual figures, just expenses.
Expenses that we would no longer incur if we lived in a Camper Van:
- Rent/Mortgage payments
- Gas, Electric and Water Bills
- House Insurance
- Council Tax
- Car Lease Hire (I have my car on a lease agreement where I change it every 3 years for a new one)
New expenses that we would incur if we lived in a Camper Van:
- Purchase of a Camper Van (Finance payments or cash)
- Fuel
- Gas Bottles for Cooking etc
- Campsite Charges when not Boondocking
When we did these calculations, even if we financed the Camper Van purchase, we were quite shocked as we would be well over £1000/ month better off, and obviously we would be able to tour the country too.
I’m hardly surprised that so many people worldwide are embracing the alternative “Van Life” in place of the life of quiet despair and entrapment that the current financial hardship is offering.
Can You Finance A Camper Van? – Summary
Well, the answer is Yes, you can finance a Camper Van. It can be done affordably, if you are sensible about it and don’t jump into a one sided Hire Purchase Agreement, and it can be very much a sensible and wise financial decision.
We’ve looked at Secured and Unsecured Loans, Hire Purchase Agreements and Cash Purchases, Lenders, Savings Benefits, Investment Potential and at some of the associated Costs of living in a Camper Van. Hopefully it has been a helpful post for you.
Van Life is becoming more desirable with every passing month. We, as a family are seriously considering taking the plunge once our daughter has finished her Education. Watch this space for updates in the future. I’ll certainly be writing about it if and when we do it.
If Van Life has piqued your interest, check out this post on “50 Van Life Tips For Living On The Road“. I think you’ll enjoy it.
