Sorting out your finances is one of the first steps to living on the road (cont'd)

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INVESTMENT TIPS FOR RECREATIONAL VEHICLES
While most workers predict retirement at 64, the actual average is only 59 with fi nancial security and health the biggest reasons why. Super can be accessible from the age of 55, but it may attract tax like regular income. The average lifespan is about 82 – will yours last 23 years of spending?

If the allure of life on the road is too great, you might as well get the most out of it and make your money work while you gallivant about. After six months, it is possible for an RV to be classed as your new primary residence and some expenses such as site fees may be claimable from Centrelink under rental assistance, or if you are working part-time while you travel, planning ahead can see some expenses claimable against tax.

Once a decision to buy has been made, there are still good and bad moves to make. Research your vehicle as much as possible. Establish values of similar models, anticipated depreciation, and the quality level best suited to your needs. Manufacturer reputation, maintenance, layout – all can make a big difference to the resale value of your asset.

Before signing up for any finance, be sure to shop around for the best deal. Consider the provider’s reputation and the details of the contract as well as rates and costs. Consulting your solicitor or financial advisor is always a good idea. If you are unsatisfi ed with your loan contract, voice your concern with the loan provider who must (by law) have a formal complaint procedure. This is then provided to the State Ombudsman, who will assess the fairness of the situation.

Unlike a holiday that lives on only in memory and photographs, a caravan or motorhome is potentially an investment and lifestyle change in one rolling package. Smart use of your resources could see you driving into the sunset before you can say ‘How much is that RV in the window?’

FINANCE TIPS FROM THE EXPERTS
With in excess of 35 years combined experience in the Banking and Finance industry, Fortifi ed Finance have the knowledge and expertise to offer important and accurate financing advice to suit your needs. These are their top tips when it comes to fi nancing your dream van.

1. If financing your RV, consider the best option for your situation. Some people are attracted to adding their RV purchase to their home loan because the interest rate may appear attractive by comparison. By financing on an RV loan, it forces you to pay off your loan over a short term (up to 5 yrs). By putting your van purchase on your home loan, you can become complacent and end up not paying off your loan quickly. This can result in you paying more interest to the bank.

2. Typically as you are approaching retirement, your fi nancial advisor will have investment strategies in place that may involve using your property equity. The more equity you have available for investment, the stronger your retirement nest-egg will be. By financing a depreciating item with property you, this will significantly erode your retirement nest-egg capabilities. The old saying, Never Eat Your Chickens, Only Their Eggs, has merit!

3. When financing your RV, ideally try and do so whilst your still employed, that way when you retire, your RV will be fully paid off and one less thing to worry about when you’re travelling around Oz.

4. Always shop around for the best deal for you. Onsite finance offers are not always the best. Often, they may have fewer finance avenues. Use a reputable independent fi nancial professional, they should typically have multiple finance options and can take advantage of rate specials as they arrive from time to time. Just like major retailers stock more than one product line, so should an independent fi nance professional.

5. Lastly, if you are self-employed, there maybe tax advantages of funding a RV through your business. Naturally you have to have a legitimate case for using it for business purposes, but if you can, there are signifi cant tax advantages worth considering. It also opens up access to further lenders and cheaper rates for some. As always, please check with your Accountant or tax professional and Finance Professional before embarking down this avenue.

METHODS OF FINANCE
• Liquid cash
• Equity-release products
• Managed funds
• Sale of assets (stocks, etc)
• Personal loan
• Line of credit

SPECIAL NOTE:
No one method is ideal for everyone. All decisions should be made in consideration of current circumstances and after discussion with your financial advisor.

Article by Dave Challinor, Fortified Finance & Leasing
as appeared in 4WD Action

ABOUT DAVE: With over 20 years of banking and finance experience, Dave has been exposed to and witnessed every possible change in the financial environment. From bank policy shifts to continually increasing governmental legislation, there is really no form of lending that Dave has dealt with. Being the owner of Fortified Finance & Leasing in Brisbane’s North, Dave stays abreast of any changes in lending requirements that affects any consumer. and personal needs.

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