Vehicle Financing For A Holiday: What Are My Options?

2nd July 2019

If you have dreams of hitting the road for your holiday this year, you may be looking into financing a motorhome or other type of holiday vehicle. These can be a huge investment, and so financing it is often the biggest hurdle. If you have savings or are planning a budgeting strategy, here are the best ways to finance your vehicle.

Cash or savings?

Before you invest in any type of vehicle, the first step you need to take is a realistic look at your budget. What can you currently afford? There are two main options for how to break down the cost of a new vehicle:

Cash: This means how much available money you currently have. Could you pay off a sizeable chunk (or even the whole amount) without going into savings?

Savings: you may not have the cash available to pay for the vehicle outright. Therefore, you may have to dip into your savings. Before you hand over your entire life savings, make sure you still have plenty of money left in your account for a rainy day.

Finance deal

Finance deals act as a temporary loan that allows vehicle owners to pay the cost of their vehicle back over time. Visiting specialist providers, such as Auto Finance Online, will help you to find a motorhome and finance package that’s within your budget. Finance deals should be proportionate to the deposit you put down and how much you can feasibly pay back each month.

Your credit rating

The options that are available to you may very well depend on your credit rating. If you have a history of missed payments or unpaid debt, you may struggle to get the holiday vehicle you are after. If you are unsure of your credit rating or want to improve it, here are some tips:

Pay off debt: one of the best ways to improve your credit score is to start paying off any debt you may have. Clearing old credit cards or overdrafts could help you improve your credit score enormously.
Credit cards: Having a credit card for occasional use, which you pay back on a regular basis (ideally in full), will improve your credit rating. However, before you invest in a credit card, ensure that you do not already have unpaid cards or other debts that need to be paid off first.
Check your credit reports: if you have checked your credit score and are a bit confused by the outcome, then there’s no harm in checking its accuracy. You may find that some details have not been accurately updated, which could have a profound effect on your rating.

There are a number of ways to approach holiday vehicle financing. Improving your deposit size and your credit rating are just two ways of opening up more options to you. Saving frugally and improving your current financial situation will ensure that any vehicle financing deals you do take out will be much more comfortably affordable.