Caravan Finance in the UK: A 2025 Consumer Guide

Why This Guide Matters

Caravan ownership offers the promise of flexible holidays and a home-from-home. Yet, with the average new static caravan costing upwards of £30,000 and touring caravans often not far behind, most buyers turn to finance solutions. The caravan finance market is now more complex than ever, with a variety of products, lenders, brokers, and eligibility rules. Navigating this landscape is vital; the right finance product can save you thousands over the loan term, while the wrong one could prove costly. This guide distils the current market, helping you make confident, informed choices—whether you're eyeing a motorhome, static, or compact camper.

The Basics Explained

Caravan finance broadly mirrors car finance, but with some unique wrinkles. Here’s what you need to know:

• Hire Purchase (HP): You pay a deposit and fixed monthly instalments. At the end, ownership transfers to you—no lump sum left to pay. HP suits buyers wanting certainty and eventual outright ownership.
• Personal Contract Purchase (PCP): Usually for new caravans only, PCP offers lower monthly payments by deferring a large final payment (the 'balloon'). At term end, you can pay this to own the caravan, return it, or part-exchange.
• Personal Loans: Unsecured loans are flexible and require no deposit. You own the caravan from the outset, and can buy from dealers or private sellers. Repayment terms typically run two to seven years.
• Dealer/Manufacturer Finance: Arranged on-site at dealerships or holiday parks, often via a lender like Black Horse, Santander or through a broker. Sometimes includes bundled extras, such as site fees.

Caravan finance covers a range of vehicles: touring and static caravans, motorhomes, campervans, and even lodges. Loan amounts typically range from £1,000 to £250,000, with repayment terms from one to fifteen years. APRs vary widely, starting from as low as 6.5% for good credit, but can be much higher for less robust credit histories.

How It Affects You

Your choice of caravan finance will shape your monthly outgoings, total interest paid, and flexibility over the years. For example, HP agreements usually require a 10% deposit and have higher monthly payments than PCP, but you own the caravan outright at the end with no surprise lump sum. PCP, on the other hand, can seem attractive for its lower monthly cost but comes with a significant final payment if you wish to keep the caravan. Personal loans offer ownership from day one and sometimes no deposit, but rates depend heavily on your credit profile.

Eligibility is key: lenders will check your UK residency, age (typically 18+), income stability, and credit record. Bad credit options exist, but come with higher APRs and careful affordability scrutiny. Applying for multiple products in quick succession can harm your credit score, so comparison tools and soft-search eligibility checks are invaluable. Whatever the product, additional costs—site fees, insurance, maintenance—must be factored into your budget. Early settlement is usually allowed, often with the possibility of a partial interest rebate, but check for any early repayment fees.

Our Approach

At Kandoo, we advocate for transparency, flexibility, and consumer empowerment. Here’s how we support you:
• Wide Choice: We work with a carefully selected panel of lenders and brokers, including those open to less-than-perfect credit, to maximise your options.
• Personalised Quotes: Our online calculator gives instant, tailored quotes without impacting your credit score. This allows you to see realistic monthly payments, rates, and terms before you commit.
• Clear Explanations: We demystify the jargon. Whether it’s the nuances of HP versus PCP, the implications of a balloon payment, or understanding why APRs can vary so widely, we provide straightforward guidance so you can compare like-for-like.
• Flexible Terms: We recognise that not every buyer’s situation fits a standard mould. That’s why we offer finance terms from two to fifteen years, and loan amounts as low as £1,000 or as high as £250,000.
• Bad Credit Considered: While no UK lender can guarantee approval, we work with partners who assess beyond your credit score, focusing on real affordability. If you have a chequered financial past, we’ll still explore what’s possible—always with responsible lending in mind.
• Support Throughout: From pre-check to paperwork, our team guides you. We explain what documents you’ll need (proof of identity, address, income), and walk you through the application process—whether you’re buying from a dealer, holiday park, or private seller.
• No Hidden Fees: We are upfront about any admin or purchase fees (if any) and highlight where early settlement or overpayment is possible without penalty.
• Consumer Protection: As an FCA-authorised broker, your interests come first. We ensure all our lending partners are regulated and adhere to best practice.

Before You Decide

Deciding on caravan finance is about more than headline rates. Here are some vital considerations:
• Total Cost: Calculate the full cost of borrowing, including interest and any fees.
• Deposit: HP and PCP usually require at least 10%. Personal loans may not.
• Ownership: Do you want the caravan outright from the start, or are you happy to wait until the end of an agreement?
• Flexibility: Consider whether you might want to upgrade, settle early, or change your mind. PCP offers more end-of-term flexibility, but can be more expensive overall.
• Usage Restrictions: Many static caravan finance agreements prohibit use as a main residence.
• Additional Costs: Site fees, insurance, and maintenance can add significantly to annual outlay.
• Who You’re Buying From: Buying from a private seller may limit finance options and require extra checks.

Carefully reviewing these factors—and using online calculators to stress-test your budget—can help you avoid costly surprises.

What’s Real, What’s Hype

A few myths persist around caravan finance. No lender offers true "guaranteed approval"—all applications face checks for affordability and creditworthiness. Bad credit options are available, but rates can be much higher and terms stricter. Quick approval is common (often within the hour), but instant decisions don’t mean instant payouts—documentation and vehicle checks still apply.

Headline rates are just that. The APR you’re offered may differ based on your profile, the caravan’s age, and purchase source. Always read the small print, and don’t be swayed by promises that sound too good to be true.

Pros & Cons

Pros	Cons
Wide choice of products and lenders	APRs can vary widely
Flexible terms and loan amounts	Deposit often required (HP/PCP)
Quick, online eligibility checks	Bad credit options have higher rates
Early settlement/overpayments often allowed	Additional costs (site fees, insurance)
Bad credit options available	Ownership may be delayed (HP/PCP)
Can buy from private sellers (with some loans)	Vehicle age restrictions may apply

Other Options to Consider

• Personal Savings: If you have the funds, buying outright avoids any interest and fees.
• Remortgaging: Homeowners sometimes remortgage to fund large purchases, but this means putting your home at risk and can extend your mortgage term.
• Credit Cards: For smaller amounts, a 0% purchase credit card could be an option, but only if you’re sure you can repay before the promotional period ends.
• Leasing/Hire: Some parks and dealers offer long-term hire or lease options, especially for static caravans, avoiding ownership costs but limiting flexibility.
• Letting to Offset Costs: Letting out your caravan (e.g., through Haven’s Let2offset scheme) can defray annual site fees and running costs, but check the park’s rules and the impact on your earnings.

Each alternative has its own risks and rewards. Carefully weigh these against the certainty and predictability of structured finance.

FAQs

Q: How do I apply for caravan finance? A: Most brokers and lenders offer online applications. You’ll need to provide personal, address, and employment details, along with ID. Some lenders offer near-instant decisions, but final approval may require additional documentation.

Q: What’s the minimum deposit? A: Typically 10% for HP/PCP, but many personal loans require no deposit at all.

Q: How much can I borrow? A: Between £1,000 and £250,000—limits depend on lender, your credit profile, and the caravan’s age/type.

Q: Can I buy from a private seller? A: Yes, with many brokers/lenders. Expect additional checks to confirm the caravan’s condition and ownership.

Q: Can I get finance if I have bad credit? A: Yes, though your APR will likely be higher and the lender will look closely at your ability to repay.

Q: What happens at the end of a PCP? A: You can pay the large final payment to own the caravan, hand it back, or part-exchange for a new model.

Q: Are there age restrictions for the caravan? A: Yes, most lenders require the caravan to be under 10–20 years old at the end of the agreement.

Q: Can I settle early? A: Most lenders allow early settlement or overpayments, sometimes with a partial interest rebate.

Q: Are there fees for arranging finance? A: Brokers usually do not charge customers, instead receiving commission from lenders. Check for any admin or purchase fees.

Q: What’s included in static caravan finance? A: Typically only the caravan price; site fees, insurance, and extras are additional.

Q: Can I get finance if I’m self-employed? A: Yes, provided you can show proof of income.

Next Steps / Call to Action

If you’re considering caravan finance, start by using our online calculator to compare your options. Take time to review the total cost, assess your eligibility, and read the agreement carefully. For tailored advice or help with the application process, contact our team. We’ll ensure you get clear, unbiased guidance—so you can enjoy your new caravan with confidence and peace of mind.

---

For further reading, see resources from Black Horse, Pegasus, Novuna, and Haven. Always check the latest terms and consult a qualified adviser if unsure.