PCP for New Caravans
Personal Contract Purchase (PCP) is a hugely popular finance product that has been used in the car market for many years. In fact, the majority of new car purchases made by individuals are financed in this way.
PCP is now available from Black Horse to assist with the purchase of new caravans. But why should you consider it?
How does it work?
PCP is very straightforward. At the time of purchasing the caravan you agree an initial deposit and how long you want the agreement to run for (over 1 to 5 years). With Black Horse providing the financing options, the dealer can calculate the Guaranteed Future Value (GFV) of your caravan and confirm the monthly payment. A significant proportion of the amount of credit is deferred to the final payment at the end of the agreement, reducing the monthly payments.
At the end of the agreement you have three options:
1. Part exchange the caravan for another, settling the agreement as part of this process*
2. Return the caravan and not pay the Final Lump Sum Payment. Provided the caravan is returned in good condition* you will not have any further amount to pay
3. Pay the Final Lump Sum Payment to own the caravan
What are the benefits?
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Flexibility: The big selling point for PCP is that you can keep your options open. At the end of the agreement you can decide what suits you and your circumstances at the time
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Lower Monthly Payments: The other major consideration for many is that the monthly payments are lower than with traditional Hire Purchase (HP), as much of the amount of credit is deferred
Who will PCP suit?
There are many circumstances where PCP may suit you and each customer will have different requirements, so whether this is the best Black Horse product for you needs consideration. However, if you:
1. May wish to part-exchange the caravan at the end of the agreement (so that you keep up with the latest caravan developments or only have a caravan with the benefit of manufacturer’s warranty for example)
2. Wish to keep your options open
3. Like to budget
then PCP is worth considering.
Indicative Examples
We show below two indicative examples of PCP and HP on a new caravan purchase.
Please note the figures for any actual purchase will vary depending on your requirements, so for more details and actual quotations please do Contact Us.
What else do I need to consider?
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You will not own the caravan until the final payment has been made
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It is only available on new caravans
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You do gain some protection against unexpected depreciation as the Guaranteed Future Value is set at the start of the agreement
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You do get protection under the Consumer Credit Act Termination Rights and Protection legislation under the Consumer Rights Act
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You will be required to maintain the caravan in good condition and have fully comprehensive insurance
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Your caravan is at risk of repossession if you do not make the contractual payments
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A significant proportion of the credit is deferred to the end of the agreement and you should prepare for this if you want to own the caravan
Anything else?
Do look at the overall ownership considerations for PCP compared to other payment methods. For example, if you are thinking that at the end of a PCP agreement you might want to part-exchange for another new caravan using the same PCP product then if you chose a three year agreement the following might be worth considering:
1. You will benefit from the caravan manufacturer’s warranty for all of the time you have the caravan
2. You will only need to allow for two annual services in your budget and if prepaid on a Fixed Service Plan can be included within the PCP agreement and monthly costs
3. If the Guaranteed Future Value is lower than the actual part-exchange value of your caravan at the end of the agreement, you will have equity in the caravan to use as a deposit for a new PCP agreement on the next caravan*.
What to do next?
Watch the Black Horse video at the bottom of this page. For more details of PCP and other finance products from Black Horse please visit their website at www.blackhorse.co.uk.
If you wish to discuss any aspect of buying a new caravan, with or without finance from Black Horse, then please do Contact Us.
*Notes:
Please note that all finance is subject to status and is only available to UK residents aged 18 years and over. Finance is provided by Black Horse Limited, St William House, Tresillian Terrace, Cardiff CF10 5BH.
Further information on what is considered good condition can be found at www.blackhorse.co.uk/TouringCaravanGoodConditionGuide (PDF 10Mb).