Buying a static caravan or holiday home can often be very expensive with a high price tag and not everyone has the ability to buy one outright. However, this doesn’t mean you can’t still enjoy all the benefits of owning a static caravan thanks to the ability to spread the cost of a static caravan with financing options.
In this guide, we will go over the different finance options available and look at both the advantages and disadvantages of financing your static caravan. In addition, we will also discuss VAT.
Can You Get A Static Caravan On Finance?
Yes, there are a range of financing options available to help you buy a static caravan and spread the cost over a period of time. In fact, static caravan finance is a common way to purchase a holiday home. When buying a static caravan simply ask the sales representative about static caravan financing options.
Is It Hard To Get Finance On A Caravan?
A poor credit rating can make static caravan financing harder to get. However, if you take your time and explore the market to find a finance deal that is both available to you and affordable it is likely you will be able to find a solution.
How Much Does A Static Caravan Cost?
Deciding on the size, make & model of static caravan is your first step. To do this, it is important to create a budget that works for you, even with financing. With this budget in mind, you can begin to look at the full range of options available to you in this range. This could allow you to snag a brand new static caravan or a pre-loved holiday home for a cheaper price.
Once you have a good idea of what you have available to you in your budget, you can start to form a better idea of the options available to you. If you find the perfect static caravan that is within your budget you can begin to discuss all your options, including deposits, buying outright and finance options.
What Additional Costs Do You Have When Buying A Static Caravan?
There are additional things to consider when buying a static caravan or holiday home at a holiday park. This includes annual running rates, such as water and electricity, insurance costs, annual site fees and of course the finance costs.
How Does Caravan Finance Work?
Static caravan finance works just like a regular personal loan in that you agree to borrow a lump sum from a lender, which you then pay back over an agreed amount of time. This will normally involve monthly payments that will be based on the amount that you borrow.
Static Caravan Finance Options
There are three ways to get finance to buy a static caravan:
What Is A Hire Purchase Agreement?
A hire purchase agreement is the most common way to finance a static caravan. However, it is not the same as buying a car on finance or setting up a mortgage. The main difference is that once a hire purchase agreement is in place you technically won’t own the caravan until you have paid it off in full. Until you have paid it off, you are only renting or hiring the static caravan.
This can mean that there are specific terms that you need to comply with during this period. In addition, similar to other finance agreements there may be an additional fee due at the end to completely own the caravan. So be prepared to clear one final payment with your financier and park operator before taking full ownership of your caravan.
Hire Purchase Agreements And Your Credit File
As with other purchases made on credit, a hire purchase agreement will rely on your credit score. Your credit score is a record of payments you have made on credit or through borrowing and is used by lenders to estimate whether they can expect you to reliably pay the money back once they have made an agreement with you.
It is important to remember that if your request for finance gets rejected your credit score will suffer. This means you should always make sure you have a healthy credit score before applying for static caravan finance. In addition, your credit score will also suffer if you fail to make payments on time.
Advantages Of Static Caravan Finance
There are several benefits of buying a static caravan on finance, such as;
For many people looking to buy a static caravan, finance is the best option. However, there are a few disadvantages that you will need to consider before making up your mind.
Disadvantages Of Static Caravan Finance
When you buy anything on finance there is a risk, and this is also the case for caravan finance. You should always make sure that it suits your financial situation. Here are a few disadvantages to buying a static caravan on finance.
When it comes to static caravan finance you should always review your options thoroughly and seek out independent financial advice if necessary.
Do You Pay VAT When Buying A Caravan?
Yes, we all pay VAT (Value Added Tax) on many items that we buy in the Uk and static caravans are no different. This will all be included in the price of your static caravan at the park and you will be told the amount you have to pay by the caravan park. VAT will be included separately on your invoice but will be paid as part of the overall purchase fee.
Do You Pay VAT On Pitch Fees?
It is worth noting that pitch fees will also be affected by VAT as well as anything that you need to pay the holiday park as part of business costs.
Your Rights When Buying A Static Caravan
When buying a static caravan with finance you have the same rights under UK law that you would have when buying anything on credit. If you have any issues with your static caravan finance or pitch then get in contact with your financiers, as they will handle all repayment requirements. In addition, all hire purchase agreements are fully regulated and offer additional security to buyers.
Should You Enter Into Static Caravan Finance?
For many people looking to buy a static caravan, finance can make all the difference. Static caravan finance can be a great way to get access to a holiday home sooner rather than later, or at all for many people. However, entering into a finance agreement for a static caravan will put you into a contract for an extended period of time which will require you to make payments when requested and in full or suffer damage to your credit score or even legal action if you don’t.
We suggest that you carefully consider the pros and cons of financing your static caravan and make sure you understand the ramifications and only pursue it if it is right for you. If needed, discuss your options with a financial adviser before deciding.