Owning your own caravan is highly desirable for many people. But if you only plan to use the caravan for a few weeks and possibly the odd weekend each year, owning one yourself may not be a cost-effective proposition. There is also the current issue of securing a new caravan due to the surge in demand which has seriously diminished supply.
Many people no doubt share that point of view and while hire caravans are available, another option is also available – share caravans. Timeshare holiday apartments have been around for decades and similar boat-share set-ups are also available. So it is not surprising that a caravan share option would also emerge. Jade Caravan Finance outlines the finance options for share caravans and how to secure your loan.
Those looking to share the costs and use of a caravan with other parties have a number of options to consider. A business operation has been set-up which offers a percentage share ownership in a brand new caravan for a certain number of days use during each year. This will no doubt be an attractive option for many seeking to enjoy the caravan lifestyle without taking on the full commitment of full ownership.
Another less formal option is to set-up your own caravan share arrangement or joint ownership with family or friends. Several families, couples or individuals or a group of friends may choose to buy a new caravan together to share both ownership and their time away together. That can make a lot of sense to a lot of people as it means sharing the maintenance and other ongoing costs such as insurance and storage.
But what if you require a loan to fund the purchase of your share of the caravan? What loan options would be available to cover this type of share caravan acquisition? We explain our caravan loan products and provide some insights into aspects to take into consideration. Weighing up the pros and cons of sole versus joint ownership options.
Caravan Loan Types
Our most popular loan for the purchase of all types of caravans, campers and RVs is the Secured Caravan Loan. Following the universal format for secured loans, with this type this of loan the caravan is the security or guarantee against the loan. A simple to follow, straightforward format which is highly versatile and suits most of our customers.
But in the case of joint ownership, a party to the arrangement taking out a loan would not rightfully be in a position to put the entire caravan up as security against the loan when their share of the vehicle is not 100% of the goods. The complication being, if that party defaults on their loan and the caravan is repossessed, all parties face the prospect of losing their share in the asset.
For those considering shared or joint ownership, an Unsecured Personal Loan may suit their requirements. As denoted by its title, this type of loan does not use the goods as security against the loan. Security by way of other property or assets may be requested by the lender and the interest rate is higher than for a Secured Loan. But this may be a very attractive and viable option for those entering a share or joint caravan ownership arrangement.
We refer you to our webpage to read the full product details of Unsecured Personal Loans and invite you to contact us to discuss or request a quote.
Considerations: Sole v Joint Ownership
To make a sole purchase of a caravan our Secured Caravan Loan is suitable for most buyers and for those considering a shared or joint purchase, the Unsecured Personal Loan may suit. But there are other aspects to consider.
We pose a few points for buyers to consider:-
- Some of our lenders do have minimum loan limits so joint buyers would need to be requesting a loan above the threshold.
- Study and review all the details of timeshare companies including the management fees charged by the companies and the exit arrangements. When all the fees and charges are added up, owning a caravan solo could be a more cost-effective option, especially with a cheap interest rate loan.
- If taking on finance for your share, ensure that your loan term is in sync with the selling cycle of the share company. Timeshare companies and possibly the family/friends group may have a timeframe when they regularly upgrade or choose to sell the caravan. If your loan term extends beyond when the caravan is sold, borrowers may be up for break fees for ending a loan early.
- Unsecured loans may require other property of assets as loan security. This would tie up another of your assets for the duration of your loan.
- Interest rates on unsecured loans are higher than for comparable secured loans. With the current cheap interest rate climate and our ongoing commitment to better interest rates, you may discover the repayments on buying your own caravan are more cost-effective than you think. Use our calculator to work up the different options.
- Joint decisions require consensus and with a shared caravan with family/friends that can mean travel and holiday plan decisions. Make sure you select partners that share your interests and are keen to travel to the same places as you.
- If considering partnering with another family with children on a shared arrangement, pay attention to the ages of all your children. As children grow their interests change and within a few years you may discover your holiday and travel preferences are heading down separate routes.
- Buying your own caravan with sole ownership provides you with equity in an asset as you pay down the loan. This asset may be used as part of applications for other forms of finance and loans. Having a shared option may not provide the benefits.
After considering all the pros and cons, if you decided that a shared ownership caravan arrangement is your preferred option, contact us to discuss how we can assist you with the finance. Whatever way you decide to embrace the caravan lifestyle, Jade Caravan Finance may have a finance option to bring your plans to reality.
Contact Jade Caravan Finance on 1300 000 003 for a quote on finance for a shared ownership caravan arrangement
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.