Latest insights from our experts
Posted 19 April 2013
Hire purchase agreements – a different way of selling?
Funding the purchase of a holiday home through traditional lending from a bank is not as easy as it used to be and many holiday park owners will be looking at different ways to clinch a deal.
Hire purchase agreements for the purchase of caravans as a way of securing a buyer are getting more popular but they bring their own complications and park owners who are considering offering hire purchase should consider carefully the benefits and downsides of doing so. Things to be aware of:
- Hire purchase agreements are unsecured so if the buyer defaults on the agreement you cannot automatically take back the caravan;
- Hire purchase agreements can only be used for chattels and not buildings so those parks with lodges which fall into this category must take care; properly trained staff will be key;
- In order to enter into a hire purchase agreement with individuals, a credit licence will be required, together with an A level in maths to work out the APR!
- Hire purchase agreements are a long term investment for park owners and the buyer. You need to undertake checks to confirm creditworthiness of the borrower together with considering whether the amount you are lending is suitable for the circumstances (particularly the age) of the purchaser.
If you have questions about hire purchase or want advice on selling caravans by hire purchase please call our specialist parks team on 01392 207020 or email firstname.lastname@example.org