Peter BaberSee other Advice articles filed in ‘General caravan advice’ written by Peter Baber
There is a new option for cost-conscious caravanners looking to buy a new tourer. Leisure industry specialist Black Horse Finance – part of the Lloyds Banking Group – is now offering deals under Personal Contract Purchase (PCP).
PCP has been offered in the past for motorhomes by smaller firms, but this is a first for tourers. And the good news is that if you're looking at caravans for sale, Black Horse can boast a significant network of dealers with whom it is already working.
The scheme is similar to hire purchase, except with a significant proportion of credit deferred until the end of the agreement, and PCP already accounts for around 80% of all new car sales in the UK.
Users, not owners
Black Horse is hoping that it will appeal to caravanners who are more interested in ‘usership’ rather than ‘ownership’. This is because under PCP you don’t actually own the vehicle.
You make an initial payment, then regular contributions over an agreed period (usually one to five years). After, that you have three options: return the caravan and walk away, make the final ‘balloon’ payment to own it outright, or part exchange it for another caravan and continue paying under a new PCP deal.
Customers are offered some protection, because under the scheme the participating dealer agrees that the value of the caravan at the end of the agreement is at least as much as the deferred final payment. But there are challenges.
Anyone who can’t meet regular payments risks losing their deposit. Also, the deal applies only to new caravans (car buyers can use PCP to buy new and used models) and customers must take out fully comprehensive insurance – although who they choose to go with is up to them.
For now, Black Horse isn’t offering dealers an incentive to join the scheme. Participating dealers decide what level of deposit to demand from buyers, although Black Horse does say that 0% finance may be available subject to status.
Giving customers what they want
Nagia Thabet, head of joint ventures, leisure and bikes for Black Horse, told us that dealers and customers have been telling the lender for some time that they wanted a PCP product that would lessen the onus of making the large and long-term financial commitment of buying a caravan.
She said: “We believe PCP for leisure will directly address this and provide the flexibility that customers need to make it easier for them to buy the vehicle of their choice.”
Will you be taking advantage of PCP when buying your next new caravan? Let us know!