Recreational and lifestyle finance

What sits in this category

Recreational finance covers the assets people buy for their weekends rather than their commute. Mechanically it works much like car finance — a loan secured against the thing you are buying, over a fixed term, at a fixed repayment. The difference is not the paperwork. It is that nobody has to buy a boat.

With a work ute there is a floor under the decision: you need transport, so the question is only which one and on what terms. With a caravan or a jet ski the whole thing is optional, which changes what a sensible loan looks like.

We are a broker, not a lender. We do not lend our own money and we do not make the approval decision. We work out what you are trying to buy, compare it across a panel of more than 60 lenders, and put a recommendation to you with the reasoning attached. Each asset below is assessed differently, so start on the page that matches what you are buying.

Match the term to how long you will actually use it

These assets depreciate, and most lose value faster than a car because the second-hand market for them is thinner and more seasonal. At the same time, a longer term makes the monthly repayment look smaller — which is exactly what makes a long term tempting when you are standing next to something you have wanted for years.

Stretch it far enough and you end up somewhere familiar: still paying for a boat you stopped taking out two summers ago, and owing more on it than you could sell it for. That is not rare. It is simply what happens when the loan outlives the enjoyment.

So the useful question is not “what can I afford per month”. It is: how many seasons am I realistically going to get out of this? A caravan bought for a lap of the country is a different proposition to a jet ski bought for the summers while the kids are still at home. Answer that first and the sensible term picks itself.

A few things follow from it:

• A shorter term costs less overall. You pay interest for fewer years and own the thing outright sooner — which is when you actually have the option to sell it.
• Deposits do more work here than elsewhere. Money in up front keeps you closer to the asset’s real value, which matters when that value is falling.
• Balloon payments deserve extra scrutiny. A lump sum deferred to the end is still owed, and by the time it falls due you may no longer want the asset it is attached to.
• Budget the running costs, not just the repayment. Registration, insurance, storage, servicing, mooring or site fees are often the reason a recreational asset stops getting used.
• Consider your next application. A commitment taken on today shows up in your borrowing capacity tomorrow. Because we handle home loans as well, we can tell you that before you commit rather than after.

None of this is an argument against buying the thing. It is an argument for choosing the term deliberately, rather than taking whichever one makes the monthly number look best.

Still looking for the thing itself?

If you have not found the boat or the van yet, our sister company OnlineShowroom.com.au can help with sourcing. It is a separate service to the finance, and you are under no obligation to use it.