Caravan FinanceTo Suit You

Rates from 10.9% APR. Representative APR 19.9%

Caravan Finance
CAR FINANCE SOLUTIONS

Caravan Finance.

Dreaming of the open road? Now more than ever before, we are embracing the independence, spontaneity, and freedom of caravanning. The skyrocketing popularity of national festivals, family festivals, glamping, and staycations has resulted in many of us opting to invest in a caravan. Caravan finance enables you to purchase the caravan you need, and spread repayments across three to five years.

This article outlines the key things you need to know about caravan insurance, empowering you to compare caravan finance with confidence. These facts do not replace expert financial advice. Make sure you consult your favourite financial adviser for an expert opinion tailored to your circumstances.

For now, let’s get you on the road to possibly owning your own bespoke hotel away from home.

Caravan Finance 101: Caravan Types.

A touring caravan is a separate dwelling towed behind your vehicle. You cannot drive a touring caravan, it must be towed. Touring caravans are easy to transport which means you can roam the countryside as you wish.

A static caravan, on the other hand, is your home away from home. You cannot tow or drive a static caravan. Transporters move a static caravan for you, to your preferred long-term pitch, usually at a holiday park or caravan site. Static caravans cater for all our creature comforts including the reassurance of visiting the same holiday spot whenever we can get away.

Compare Caravan Finance.

If you’re wondering whether it’s worth your time to compare caravan finance, it is absolutely worth it. It’s a valuable form of risk assessment, helping you make the right decision. Comparing finance options also provides a bird’s eye view of all the deals available.

Ensure you explore the scope of the deal or offer before you. Check all the fine print for extra fees and higher interest rates, bringing the attractive low monthly repayments into sharp focus. Smart shoppers benefit from conducting their own credit rating check before embarking on their caravanning comparison. You save time, money and patience.

The lure of the open road, especially when surrounded by radiant countryside, spectacular coastlines and fascinating historical storylines makes for a compelling experience. Many of us choose caravans because now more than ever we are appreciating the value of what we have at home.

Understanding Caravan Finance: The Cost.

You can pick up a new touring caravan for under £25,000, and a reliable second hand touring caravan for just under £12,000.

Common additional costs include overhauling the interior and its amenities, caravan contents such as soft furnishings and utensils, specialist equipment for towing your touring caravan, anti-theft devices including wheel clamps and coupling hitches. Average set up costs for a touring caravan add approximately £2,900 to your price tag.

Annual running and maintenance costs for a touring caravan include servicing, power, drainage, pitch costs and insurance. The annual operating and maintenance bills total around £2,300.

Owning your own static caravan is dearer, due to its home away from home comforts and fixed location. You can buy an average new static caravan (sometimes called a lodge) for under £45,000. A pre-loved static caravan can be purchased for under £30,000.

Additional fit-out costs feature homewares, electricals and pretty much everything else you want to include in your holiday home. You can achieve a reasonable static caravan fit out for under £1,200. Many people install additional security to protect their static caravan if it is unattended for periods of time. Average security fit out for a static caravan costs around £350.

As you would expect, annual running costs for your static caravan include the ground rent for its fixed abode, plus utilities and insurance costs. Budget around £5,100 in maintenance costs for your static caravan.

Caravan Finance Options Explained.

There is a variety of finance options available to help you purchase your caravan. The three main options are HP finance, PCP finance and PCH finance.

Hire Purchase (HP) finance means you rent the caravan until you have paid it off. Your HP finance contract sets out your monthly repayments and additional interest. The caravan is used to secure the loan. Make sure you do not default on your HP finance agreement or the caravan will be repossessed. You can reduce your monthly repayments by increasing the size of your deposit.

Personal Contract Purchase (PCP) finance features lower monthly repayments because the bulk of the debt is optionally paid off at the end of your contract period. This is called an option to purchase payment. You do not own the caravan with PCP finance, until you have made your optional balloon payment. You can opt out of your balloon payment by returning the caravan and perhaps starting another PCP contract. Bear in mind that PCP finance is calculated on the value of the caravan, not its asking price. There is a cap on your mileage limit and a strict servicing agreement in place to protect the caravan’s MGFV (minimum guaranteed future value).

Personal Contract Hire (PCH) finance is a leasing arrangement. This option is ideal if you have no interest in owning the caravan. PCH functions in a similar way to HP and PCP with a percentage deposit, structured monthly repayments and additional interest. PCH finance features the lowest monthly repayments, and also requires you to maintain the worth of the caravan.

Payment History
35%
Amount You Owe
30%
Length of Credit History
15%
New Credit Opened
10%
Type of Credit
10%

Credit Score Breakdown.

What Factors Affect Your Credit Score?

Financial well-being is strongly influenced by people’s credit scores. Your credit score is a measure of your financial responsibility. The higher your credit score, the better your chances of getting car finance with lower interest rates, and other benefits. Having a low credit score may prevent you from qualifying for a car loan that you may want, or your interest rate for borrowing will be higher than those who have excellent or good credit.

If you seek advice on how to improve your credit score or simply require more information, please visit: Ultimate Guide to Credit Scores

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Rates from 10.9% APR. Representative APR 19.9% Representative Example: Borrow £6,000 with £1,000 deposit over 48 months with a representative APR of 19.9%, the monthly payment would be £182.26, with a total cost of credit of £2,748.61 and a total amount payable of £8,748.61. Car Loans UK is a broker not a lender. This is an example only, all finance subject to status. Lender fees may apply

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Rates from 10.9% APR. Representative APR 19.9%

Frequently Asked Questions.

Why use Bright Motor Finance for motor finance?

At Bright Motor Finance we have many lenders on our panel, so we can make sure you are getting the best motor finance deal for you. Plus, we do all the admin, paperwork and negotiations with the dealer.

What is the difference between HP & PCP?

HP and PCP car finance are fairly similar to one another. However PCP tends to have lower monthly repayments. Although that the full amount that will need to be repaid is generally higher than with hire purchase.

PCP works by having a loan for the difference of the vehicles price when it is brand new, and the anticipated vehicle value when the agreement has been completed. This is because the vehicle will of course, depreciate over time.

HP works by usually paying a deposit of around 10% of the cars initial value, and then this value will be paid off in fixed monthly instalments. Car dealers as well as brokers (such as ourselves) can arrange a hire purchase finance agreement.

Can I change my mileage on PCP contracts?

In a nutshell, the answer is no.

This is because the car’s resale value has already been calculated once you’ve signed your PCP car loan contract. It is crucial to know that exceeding your agreed-upon mileage allowance will result in additional penalties at the end of your PCP contract.

What is a car finance brokerage service?

In essence, a car finance broker acts as a middleman between the customer and the lender. A car loan broker handles all the paperwork and negotiates with lenders on your behalf. By doing this, you can rest assured that the broker is fighting for you to get you the best deal. Our goal is to make your car finance journey as simple as possible. As well as this, car finance brokers such as ourselves have deals that aren’t usually available to the general public. Instead of charging the customer, car finance brokers charge the dealerships.

How does car finance affect my credit score?

Initially, asking for a car loan will typically have a negative impact on your credit score due to the intensive credit checks that lenders will perform. You should be aware, however, that if you make your car finance instalments on schedule. This will almost certainly improve your credit score.

What if I have been refused by other brokers?

There is still hope even if other brokers have rejected you in the past. We offer a number of finance options for those with bad credit scores at Bright Motor Finance. We will conduct a hard credit check when you apply for car finance through us, which may negatively affect your credit score. Especially if they were conducted within a short period of time. As a result, it is recommended that you wait between 3-6 months before applying for car finance again after being declined.

Can I alter my car if I finance it?

You can, but you must first obtain authorisation from the financial firm before making any changes.

What if I’m struggling to make payments?

Having trouble making your car finance payments? You have a number of options available to you. One of the following charities/organizations can provide you with free, independent advice. 

Is there anything to consider?

Yes.

  • You will not own the car until you make the final payment.

  • You are also not permitted to sell or modify the vehicle in any manner without receiving permission first.

  • Third, monthly repayments are typically higher when compared to PCP and other car leasing plans.

  • Finally, it can be expensive if you only need a short-term arrangement

What is APR?

The annual percentage rate (APR) is the total amount charged for the loan. APR, on the other hand, comes in two varieties. Exact APR implies that the rate displayed to you is the rate you will receive. Representative APR, on the other hand, suggests that 51 percent or more of those who apply for financing will receive that rate. This means that customers with weak credit may face a higher APR.

Representative APR is commonly used to advertise a company’s rates. After you have provided the lender with all of the essential information, they will be able to provide you with your specific APR rate.

Assessing my credit record?

You can also see your credit report by contacting a company such as Experian or Equifax before you make an application online. It costs about £2. You can see your credit report online and determine whether it is accurate and correct. If you spot any errors, you can request that a note is added to your report for lenders to see. If you are struggling to obtain even bad credit loans then it makes sense to check your credit report before you make any more applications.

It may be that there is an error that needs to be corrected first. Remember that every credit arrangement you apply for will record a search against your file, and too many of these may put lenders off as it suggests you could be over-extending yourself with finance. So before you apply for your benefits car loan, pause on any other finance applications for a period of time and focus on repaying every other credit arrangement that you have fully on time – including utilities, mobile phones, credit cards and so forth. This will put you in the best possible position for your application.

GAP insurance and do you need it?

What exactly is it?

Gap insurance is an abbreviation for Guaranteed Asset Protection.

Gap insurance is a type of insurance that is meant to cover the difference between the amount your insurance provider pays out in the event that your car is written off or stolen and the price you paid for the vehicle. However, you should be aware that gap insurance supplements, not replaces, your usual car insurance.

So, when do you need gap insurance?

Gap insurance can be beneficial in a variety of ways. First and foremost, if you took out a large loan to purchase your car. As previously said, gap insurance would be advantageous if your automobile was stolen or written off. This is due to the fact that the gap will pay off the existing debt.
Furthermore, gap insurance may be advantageous if you are concerned about the depreciation of your vehicle. In the first year, a brand new car will lose 15-35 percent of its value. As a result, gap insurance might assist you in receiving a larger reimbursement if your automobile is written off after it has already depreciated.

Where can I purchase gap insurance?

Thanks to Bright Compare, comparing gap insurance quotes has never been easier!

Why compare car finance on benefits?

When you compare motor finance on benefits, you can instantly see which lenders are likely to be prepared to lend to you. Use our website to compare motor finance on benefits and it makes the entire process quick and easy. Simply enter your basic information and we will instantly scour the market to see which lenders may be prepared to offer to you and on which terms. When you see the car dealership which is best for you, you can then apply for your loan quickly and without delay, by clicking through to the lender via our website.

What Happens If There Is An Issue With The Vehicle?

If the vehicle is defective upon delivery, you can simply refuse it and return it to the dealership.

0% And Credit Card Caravan Finance

Additional finance options to keep an eye out for when you are comparing caravan finance include 0% finance and credit card finance.

0% finance is, of course, an enticing finance option. Yet it’s a good idea to be prudent about 0% finance. Repayment rates are higher than other finance options and 0% finance offers are rare. You will also need an immaculate credit score because of the high risk nature of the interest free loan for the lender.

Credit card finance enables you to purchase the caravan outright and repay the credit card company each month (plus interest). An immediate advantage of credit card finance is the flexible nature of its monthly repayments but the seller may be charged high fees in accepting a card payment and may pass them on to you.

What affects the cost of my car finance payments?
  1. Your deposit size
  2. How long your car finance agreement will last
  3. The interest rate
  4. What car do you choose?

It can be quite confusing, but there are three elements of the loan to keep in mind when you’re deciding if this is the right type of loan to help you to buy a car.

Because many car dealers who offer you PCP car finance deals will expect you to pay a 10% deposit. Although occasionally there may be incentives from the manufacturer to entice you, such as a deposit contribution. This is sometimes up to £2000 and is only available if you use their finance option. Also, as with any other loan, the bigger your deposit, the less you’ll need to borrow and the less interest you’ll pay and in turn, opening yourself up to better PCP car finance deals.

Then the amount that you will need to borrow will be calculated based upon the depreciation of the car’s value across the length of your loan term. Then the deposit you put down is deducted from this amount. So, you’ll pay off the amount they calculate, minus your deposit but plus interest, in monthly payments for the length of your loan agreement. PCP agreements include the APR, because it takes into account the interest charged on the outstanding balance and any other fees associated with the loan agreement. Furthermore, a loan agreement lasts for 24 to 48 months and the interest added is usually from 4% upwards.

If you decide that you want to own the car outright at the end of the deal, you can make a final balloon payment. This is also called a GFV or Guaranteed Future Value amount. Then this is calculated according to the amount that your car is anticipated to be worth at the end of your loan agreement. Of course, this is entirely optional, but the amount they set is not usually negotiable.

What Information Do Lenders Ask For?

When you apply for your car loan, the lender will ask to see evidence of your benefits income. This could include jobseekers allowance, disability allowance, Universal Credit or another form of benefits income. If you also have another source of income such as a job or pension, the lender will also ask to see this information. They will then carry out a credit check as part of the application process.