The Cheapest Way to Pay for a Trailer
The cheapest option isn't always obvious. Here's how the main ways of paying for a trailer compare.
Cash
No interest, no fees and no paperwork. For a small trailer, saving up is often the cheapest option by far. Just don't drain your emergency savings to do it.
Secured trailer loan
For most mid-priced and larger trailers, a loan secured against the trailer gives the lowest rate of the borrowing options, because the lender has the trailer as backup. Compare comparison rates and total repaid.
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Unsecured personal loan
Handy for older, cheaper or homemade trailers, or to cover extras. Expect a higher rate than a secured loan. See secured vs personal loan.
Adding it to your home loan
A home loan rate is often lower, but you could end up paying the trailer off over 20 or 30 years, which can cost more in total interest. If you go this way, make extra repayments to clear the trailer amount quickly. Talk to your lender about how this would work.
Dealer finance
Convenient, and sometimes there are promotional rates on new trailers. Check the comparison rate and fees, and whether a low rate comes with a higher trailer price.
Credit cards and buy now, pay later
Usually the most expensive way to pay for something this size once interest kicks in. Best avoided unless you can clear the balance within any interest-free period.
The bottom line
Pay cash for small trailers if you can. For bigger ones, a secured trailer loan over the shortest term you can comfortably afford is usually the cheapest borrowing option.