January is a time to ring in the new year and for many, start making plans for year ahead. But the beginning of a new year is also the time when there are changes to some prices such as tolls, PBS, government allowances and a raft of other items. The start of the year is traditionally a time for change. For buyers that are planning purchasing a new RV this year, they may be wondering if there are or if there will be any changes to caravan loans in coming months.
Buyers may need to plan financially quite some time ahead in regard to the purchase of a new caravan. While some models may be available in the showroom and ready for delivery, the usual practice for most manufacturers is the build the vehicles to order. This offers buyers the opportunity to order their RV to their specifications. Options usually include a variety of floor plans to choose from as well as different quality and styles of interior finishes and fixtures and other features.
While it is great to have this chance for customising the RV, it can mean a period of time between when the caravan is ordered and when delivery is taken. The lead time will depend on the manufacturer’s order book but may also be dependent on supply chain issues and the availability of labour. Both issues which have caused major delays in manufacturers sectors over the past few years.
The relevance of this delivery time to caravan loans is that the loan would not be able to be completely finalised until close to the time that the payment is required. During the time a buyer may take to make their selection and the time it takes to receive the RV, buyers may wonder what changes may happen to caravan loans.
To assist those with their 2023 caravan buying plans, we outline what won’t and what may change in regard to caravan loans in coming months.
Caravan Loan Products
The actual type of caravan loans will not change as a result of the new year. The Secured Caravan Loan is a relatively standard format for a secured loan to an individual. The caravan is accepted as the loan security by the lender and the buyer repays the loan in monthly repayments. Secured loans are the most common type of finance for many goods including cars, boats, motorbikes and of course caravans.
The format is fairly standard across the lending market though some lenders may have their own guidelines around issues such as the total amount of the loan, the type of interest rate (variable or fixed), and some other loan conditions. When comparing loans from different lenders, attention should be made to the details to ensure they do meet the buyer’s requirements.
At Jade, our Secured Loans have fixed terms and a fixed interest rate which result in fixed monthly repayments.
Secured loans are extremely suitable for new caravans and some second-hand vehicles where the lender accepts the vehicle as suitable security. Where the vehicle is not accepted as security, buyers can consider an Unsecured Personal Loan. These can also vary across the market in particular in regard to the interest rate and to the loan conditions. In some instances, the lender may request some form of security by way of other property.
When sourcing caravan loans for our customers, we have access to many banks and lenders to ensure we are securing the cheapest and the most suitable loan for that individual buyer.
Caravan Loans – Interest Rates
Interest rates on caravan loans is where buyers may see changes in coming months. These changes may need to be guesstimated into the caravan finance. Lenders in the caravan loans sector will make their own decisions around what rates they will attach to their RV finance. But these decisions are typically influenced at least by the interest rate decisions of the Reserve Bank of Australia (RBA).
As most will be well aware, the RBA increased the cash rate significantly over 2022. All eyes will be on the RBA February meeting to see what decision the Board makes in regard to the cash rate. The December meeting resulted in another 0.25% (25 basis points) increase to rates. But reading the minutes of that meeting, it can be learned that the Board actually discussed the arguments relating to three options. The option of returning to the much higher 50 basis points increase, the option of no change and the 25 basis points decision.
With all these options on the table, the Board did state that it expected that further rate rises would be required in the period ahead.
Caravan buyers planning ahead can use our Caravan Loans Calculator and input different interest rates to get possible repayment estimates. Repayment estimates may be calculated for higher rates down the line, the current rate being held steady and possibly small incremental increases. This may assist in better planning and more easily selecting a caravan priced to suit repayment expectations.
Of course, buyers are welcome to have a no-obligation discussion with our consultants as to their upcoming requirements for caravan loans.
Pre-Approved Caravan Loans
Where the delivery time is quite short, buyers can consider pre-approved caravan loans. These loans are quoted and processed through to being approved with a firm loan offer and awaiting finalization at the time of settlement. Pre-approved loan offers have a validity timeframe which we can advise you of at the time of enquiry.
So essentially – no change to the actual loan types but changes in interest rates on caravan loans may occur in the coming time period. Time to start make plans and speak with us about your caravan finance.
For cheaper caravan loans, contact Jade Caravan Finance 1300 000 003
DISCLAIMER: THE DETAILS AND INFORMATION IN THIS CONTENT ARE PREPARED AND PRESENTED PURELY FOR INFORMATION AND NOT INTENDED IN ANY WAY AS THE SOLE SOURCE OF FINANCIAL ADVICE FOR CARAVAN PURCHASING. IF ADDITIONAL FINANCIAL ADVICE IS REQUIRED, READERS SHOULD REFER TO A FINANCIAL ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY ERRORS, PRODUCT DESCRIPTION VARIATIONS, OR OTHER MISREPRESENTATIONS OF INFORMATION AS PRESENTED.