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To rent or buy a motorhome?

We are frequently asked if it is feasible to buy a motorhome in Europe for the duration of a longer term trip but we firmly believe that renting one of our late model, professionally prepared motorhomes offers greater peace of mind over an extended trip (take a look at why here: Long term hire solutions). There are a few alternatives but none are without complication so to help you understand the pitfalls of each option, please read on…

Short, medium and long term hire options.

At first glance, hiring a vehicle may appear to be a more expensive way of taking a motorhome trip but it is a solution which offers many advantages and few down side risks.

Nearly all motorhome hire companies offer preferential rates for longer term hires which, when compared to the true cost of lease or buy-back plans, can actually work out cheaper.

Rental deals will also usually avoid many of the pitfalls of the other options and the proposition is very simple; you agree the price for the hire, book and pay for the vehicle (and any equipment/extras you want), collect it on the agreed date, use it and return it at the end of the period. Provided there has been no damage or excess wear and tear, you are free to return home with no further commitment or concerns. Even damage can be insured and with the right cover in place, you should be able to limit your exposure to repair bills to a tolerable level.

Long Term Vehicle Leasing or Personal Leasing Plans

Most vehicle manufacturers will have a tie up with a Leasing company (often owned by the manufacturer themselves) who appear to offer extremely competitive rates for Personal Leasing Plans (PLP) for individuals.

Most commonly, PLPs will only be available for periods of more than a year – so don’t be fooled by the sales information which offers a great monthly rental rate – the chances are that you will have to lease the vehicle for a much longer period to qualify for the best monthly prices.

The rates offered by some PLPs may also only be available if you can take advantage of a lower rate of personal income tax since the leasing rates are tied in some way to a tax benefit. These tax “benefits” are very unlikely to be available to non-residents and are almost certainly not available unless the leasee has a tax authority registration number in the country they plan to lease the vehicle from.

Coupled to this, you are likely to have to insure the vehicle fully comprehensively as part of your contractual obligations (not to mention your own peace of mind) and many European insurance companies now stipulate that you must prove that you are resident in the country before they will provide cover (you will have to provide proof such as utility bills, bank statements and photo ID in your name, showing the address you plan to use).

Remember too, that under many Personal Lease Plans the mileage you cover is strictly limited and excess mileage penalties can be very high. The lease company may also dictate where/when you must service the vehicle which could dictate how you plan your trip – a limitation which might be hard to accept on what is supposed to be a “freedom” holiday – and in extreme cases, you may be forbidden from taking the vehicle to another country under the lease terms.

Buy and Sell-Back Schemes.

On the face of it, buying a motorhome which you plan to use for a predetermined period with the security of a guaranteed resale price at the end of your trip might sound very attractive. However, the old saying “if it sounds too good to be true, it probably is” definitely applies in this case since what you would be doing by entering into a Buy and Sell Back scheme is to take several unqualifiable risks yourselves.

Firstly, you should remember that pretty much anyone offering a sale/buy back option will be a professional – private individuals offering such schemes are virtually unheard of. Therefore, even if the ownership costs to you (ie. the difference between the sale price and the guaranteed buy-back price is attractive) you will probably be dealing with someone who has their own financial interests at heart and are unlikely to be looking to do you any favors!

If you do decide that this route could be an option in your circumstances, here are a few things to consider:

  • Vehicle registration: All European countries require every motor-vehicle to be registered by the owner (or in some instances, the “keeper”) with the registration authorities in the country. In most countries, you will be required to declare that you are resident at the address where the vehicle is registered – and in more extreme cases (Italy and France for example) you have to show proof that you actually live at the proposed registration address. Therefore, getting the vehicle legally transferred into your name may prove impossible and increasingly, Insurance companies will only insure a vehicle with a legitimate registration certificate so you may find it impossible to get insurance too.
  • Vehicle licences: In countries where the vehicle is subject to Road Fund Tax, it is impossible to pay the tax without the vehicle being correctly registered. Unlicensed vehicles in England can be impounded and destroyed whilst in France, failing to comply with the registration laws can lead to hefty fines and possible imprisonment.
  • Registration paperwork: Travelling between countries within Europe without valid registration papers can lead to the vehicle being impounded and imagine too, that you are successful in avoiding detection with an unregistered vehicle for the duration of your trip but when you come to sell the vehicle, you have no way of proving ownership of the vehicle – any discrepancy in the paperwork could put you in a very vulnerable position when negotiating your final sale price.
  • Insurance: You will need to insure the vehicle from the moment of collection (a minimum of third party liability insurance is a legal requirement in all European countries). Most Insurance companies now require you have a valid address in the country where the vehicle is registered and many insist that you must have been resident in the country for sometime before offering insurance cover. A few minutes of internet research will show you that it is very hard to buy insurance cover as a visitor to Europe – and indeed, in some countries (including France) it is actually impossible.
  • Many people (and notably some unscrupulous sellers) will tell you that there are ways around Insurance company requirements – the most common way being to use a friend or family members address to obtain insurance. However, whilst this might allow you to get covered, would it stand the thorough investigation which is inevitable by an insurance company in the event of a claim? The onus of responsibility to properly declare all the facts when buying insurance lies with the buyer and any false declarations could render the insurance invalid.
  • Finally, many insurance policies restrict the number of days you may use the vehicle outside of the country where it is registered so this too may be a limiting factor.

Maintenance and repairs: It is beholden to you to maintain the vehicle to a high standard during your ownership if the buy-back agreement is to hold firm and the motorhome is to remain reliable during your trip. As vehicles become older, they require more and more maintenance and the costs can quickly escalate so you have a big exposure to the possibility of major unexpected expense in the form of repairs just to keep the vehicle up to standard and roadworthy. This is particularly the case when it comes to motorhomes since they are often working in hotter climates where everything is more stressed and the domestic systems are subjected to harder everyday use.

Older motorhomes are notoriously difficult to find parts for so an accident or breakdown could lead to a long spell waiting for parts to arrive before you continue your journey. In extreme cases, it may be impossible to find parts outside of the original country of registration and you could face a hefty bill for getting the vehicle home.

On board equipment: If you buy a vehicle unseen before your trip (as is likely to be the case if you are coming from overseas) you only have the word of the seller (and perhaps some photos) to rely upon to judge the condition of the motorhome before you see it for the first time. Likewise, it may be very difficult to gauge how much equipment the motorhome comes with and you may find yourselves spending the first few days (and even more money!) equipping the vehicle for your trip. Any accessories which you add to the motorhome are also unlikely to add any value when you come to sell so may prove to be a waste of money even though you cannot live without them during your trip.

Moving between countries: There is a legal requirement in Europe to register a vehicle in a country once it has been there for 6 months or more. Hence, if you were to buy a motorhome in one country and travel in another for more than 6 months, you may need to address the registration requirements in that country too during your trip. Usually this would involve the same processes as the initial registration but may also entail proving the Purchase Tax status of the vehicle – which could be very time consuming and difficult to achieve.

Buy back price: Although you may have agreed the value at the end of your trip with the person or company who have agreed to buy back the motorhome, in reality there are many factors which could affect the final amount you receive. In particular, damage or even just wear and tear may cause the buyer to rethink their valuation, as could having covered a higher mileage than anticipated during the trip.

Another factor which could have a major effect on your return is Currency fluctuation – which whilst it could swing in your favour, in reality never seems to do so!

To conclude, we hope that whatever route you choose to secure your motorhome for a long term trip, you enjoy the fun and freedom of a great adventure – but please give us the chance to show you why you should rent from us – call or e-mail now for a detailed quotation.