When most people think of vehicle finance, they think of cars. But what about the recreational toys, like caravans, motorhomes, quad bikes, jet skis, camping trailers, and horse boxes? That’s where leisure finance comes in. It’s a specific type of finance offered by many South African banks to help people purchase leisure vehicles and equipment.
If you’re considering buying a leisure item, here’s a simple breakdown of how leisure finance works, what typically qualifies, and what you should know before applying.
What Are Leisure Items?
Leisure items are recreational vehicles or equipment typically used for hobbies, holidays, or outdoor activities. This can include:
- Caravans
- Camping trailers
- Motorhomes
- Quad bikes
- Jet skis
- Off road Bikes
- Tuk-Tuks
- Horse Boxes
Motorcycles (though technically handled slightly differently to other leisure items)
Key Things to Know About Leisure Finance
Leisure finance isn’t quite the same as car finance, here’s what makes it different:
- Age restrictions: Most banks will only finance leisure items that are 10 years old or newer. There’s occasionally some flexibility on motorcycles, depending on the model and applicant’s credit history.
- Valuations are often needed: When applying for finance on a leisure item, a valuation from a recognized agent or specialist is usually required to confirm the market value. Motorcycles typically don’t need a valuation.
- Higher interest rates: Interest rates for leisure finance are generally a bit higher than those for standard vehicle finance. This is because leisure items are seen as higher risk.
- Minimum finance amounts: Most banks set a minimum finance amount of R50,000 for vehicle and leisure finance.
- Deposits often required: In many cases, a 10% deposit is requested by the bank for leisure items to be financed.
Comprehensive insurance is compulsory: As with car finance, you’ll need to have full insurance cover in place before pay out. The bank will want their interest in the vehicle noted on the policy until the finance is settled in full.
Motorcycles: A Special Case
While motorcycles often fall under leisure finance, the process is typically similar to car finance. The interest rates may be slightly higher, but there’s more flexibility with the age of the bike, and no valuation is needed.
Important Considerations Before Applying
If you’re thinking about applying for leisure finance:
- Check the age of the item and make sure it falls within the bank’s accepted range.
- Budget for upfront costs like valuations, registration/facilitation fees, and deposits.
- Make sure you have budgeted for comprehensive insurance for the item as well.
Consider using a finance facilitator or originator, especially if you’re unsure which banks offer finance for the specific leisure item you’re interested in, as not all banks finance every type of recreational vehicle.
Final Thoughts
Leisure finance can be a great way to make those outdoor adventures and weekend getaways possible, but like any financial commitment, it’s worth understanding the process, requirements, and limitations before diving in. Whether you’re after a motorhome for road trips or a quad bike for the farm, doing your homework upfront can save you time, money, and frustration down the line.
Visit our Leisure Finance page or contact us today to find out how we can help you secure the best finance options for your next adventure.