Picking your first caravan is a big step, that’s not just about the amount of money involved. On top of learning the basics of caravanning, it’s about choosing the model that matches your touring requirements as well as your budget.
You’ll have many questions as you contemplate the best way to holiday – we answer all the most important ones…
How much do we have to spend?
Where should we look to buy?
How do we pick the best layout?
What fixtures and fittings are essential?
What accessories do I need to buy?
Will my car pull it?
What can I tow with my licence?
How do we find the best deal?
New or used?
Dealer or private?
What’s the best way to finance my caravan purchase?
Where should we look for caravan insurance?
There are lots of ways to pay for a caravan or towcar, and each has its benefits and drawbacks.
Here are the main ones…
If you’ve got it, this is the easiest, quickest and, in the long term, cheapest way to buy a caravan. However, cash sales are no longer the preference for salesmen as they may receive commission payments on any finance deals they arrange, so don’t expect discounts for paying with folding money anymore.
It’s wise to only take a deposit with you on the initial viewing. Sort the rest later.
Benefits: Flexible, speedy and cheap, with no interest charges or fees to pay / Once the caravan’s paid for, it’s all yours / Private sellers love the stuff.
Drawbacks: Cash is no longer king when buying from dealers. You used to get discounts for cash, now salesmen are keen to push finance / You’ll feel strangely vulnerable with five grand in your pocket.
Buying a caravan with dealer finance gives you a lot of bargaining power. Make the most of it. Again, compare the APR % interest rates before committing.
Be sure to check deposit and final payments, too.
Benefits: Flexible / Use it as a bargaining tool on the caravan price / Extend the repayment period for pricier caravans / Use it as another excuse to blag a few extras.
Drawbacks: Default and ‘the boys’ may be round to collect their caravan back / The temptation to impulse buy / If the interest rate’s low, you’re probably paying top-dollar for the caravan or getting a poor part-ex rate.
The media would have you believe that banks aren’t lending right now, but for the right customer (with a good credit and banking history) decent loan rates are available.
Compare what other banks and caravan dealerships are offering before committing, and consider getting your loan agreed before going caravan hunting. That way, you know a realistic price limit once you start viewing tourers to purchase.
Benefits: No deposit needed / Easy to arrange / Flexibility for long-term bank customers / Aggressive caravan repossession for defaulters less likely.
Drawbacks: Interest can be high on sub-£5000 loans / Less bargaining power with dealers.
Be realistic about what you can afford, and work out an affordable budget before you head off to choose your caravan on the forecourt.
If you need a loan, work out how much you can afford to spend each month and stick to it; the joy of caravanning can soon be spoilt by the anxiety of struggling to pay for your caravan.
If part-exchanging, go online or make a few phone calls to see what your current caravan is worth on the market.
Remember, you’ll get charged interest on any loan (unless the interest rate is 0%), so take the time to find out what interest rate you are paying and, again, do some research beforehand to make sure it’s competitive. Work with the APR % rate for any quote, as you’ll know you are comparing like for like.
Terminating a finance agreement early can be expensive, so ensure you are completely happy with all aspects of the deal before you sign. If your financial circumstances are likely to change for the worse in the near future, think hard before signing a finance agreement.
Most finance does include a cooling-off period of 14 days, during which time you can get out of the agreement without incurring penalties.
Pay a deposit, followed by affordable monthly payments, then either hand the towcar back, use it as a deposit on your next PCP or pay a final fee to keep it.
Benefits: Affordable monthly payments can make owning an expensive towcar a reality for
Drawbacks: High interest rates / Big deposit needed / Big final payment to own the car at end of contract / Must be main-dealer serviced / Mileage limit and hefty penalties for exceeding it.
Pay a deposit and a regular monthly payment. You don’t own the car until it’s completely paid off. Offers protection under the Consumer Credit Act.
Benefits: Easy to obtain / Good for those with poor credit histories.
Drawbacks: Interest likely to be high / It’ll cost you to get out of the deal early / The towcar belongs to the dealer until the final payment is made.
Just because your caravan is new doesn’t mean it won’t have suffered any damage. Inspect it carefully before signing for it. If there is any damage, negotiate a discount or make the dealership repair it.
Any company you enter into a finance deal with is likely to carry out a credit check on you. Your acceptability for a loan is based on a scoring system, so if you have ever defaulted on a loan or have never had credit in the past, your application might be refused.
Occasionally, applicants with perfect credit records will be refused. This may be because they have moved house recently, or there is an existing County Court Judgement (CCJ) against the property they live in.
To clarify this situation, there are plenty of companies online that will send you a full print out of your credit history for a small fee, to help you identify the issue.
Admin fees and delivery charges are just some of the costs you may find hidden away in the small print. Make sure you specifically ask the salesman about any extra costs and get confirmation that the spec level you’re viewing is exactly what you’ll receive.
Don't get carried away
A shiny new caravan and a silver-tongued salesman make a potent combination. Don’t get carried away. Know your price limits and stick to them.
Avoid carrying cash
Avoid carrying cash by using electronic bank transfer to pay the seller.
Affording the unaffordable!
If that dream caravan is just out of reach, there are some ways to seal the deal...