We want to buy a caravan but don’t want to use all our savings, can we get a loan to pay for it - and are there tips for buyers?

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I want to buy a caravan that we can use for holidays around the UK and in Europe.

I want to get the best caravan possible but to buy it outright would mean using up all our savings, which we don’t want to do. Can I get a loan to buy one instead?

Are there any tips that can help buyers choose the best caravan? 

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Marc Shoffman, of This is Money, replies: There are three types of caravan. A touring caravan that you tow behind a vehicle, a motorhome that you drive, or a static holiday home.

In this instance you are talking about a touring caravan, a popular choice for holidaymakers, who like to head out on the open road.

The average cost of a new touring caravan is between £15,000 and £20,000, but some top-end models go for far much more than that. Or you could get a used caravan for approximately £10,000.

Costs vary depending on size and make but to purchase any type of caravan you are likely to require a lot of savings.

Many people are unlikely to have this sort of money spare or may not want to dip into their savings.

That makes finance a popular option, as you can spread the cost over time with regular repayments.

In the same way as when you buy a car, it is possible to choose how you do this. There are dealerships and lenders that will arrange finance, such as specialist loans or hire purchase agreements.

Alternatively, a more flexible and potentially cheaper route is to look for a personal loan. Rates on these are at record lows and the moment and you can borrow money that is not secured against anything and have it in your bank account ready to buy your caravan. 

This effectively makes you a cash buyer and the ability to pay immediately can deliver extra negotiating power on a purchase.

Dealers and specialist providers will assess your creditworthiness and the value of your purchase and offer you rates for hire purchase or loans. But limiting yourself to one provider, or the dealer you are buying from can mean missing out on hunting for better deals from the wider market.

Towing:  Touring caravans can range from £15,000 to £20,000

In comparison, personal loan rates have fallen to record lows and you should be able to use one to fund the purchase of a caravan. You can use personal loans for any spending, as they are not secured on an asset.

Buying with a personal loan, rather than finance schemes such as hire purchase, means you actually own the vehicle, rather than just hiring it until the debt is repaid.

This would help you spread the cost of the caravan over time and ultimately you could sell it after a few years to repay the loan, if you no longer use it or want to buy a new one.

A personal loan for a caravan would come under the car loan bracket, but really you can use a loan for any spending.

 You simply need to be able to show you can pay it back, when the lender assesses your application.

It is worth shopping around for the best loan rates and comparing the overall costs such as any set up fees or charges for paying the loan off early, interest payments, and how much you would pay back in total.

Other things to think about when buying a caravan

You should also include the ongoing costs you would face. These include servicing, insurance and possibly storage, as well as pitch fees.

I asked the National Caravan Council to outline what people should look out for when buying a caravan.

The NCC had some useful top tips on buying a touring caravan.

Decide what you want to do in your tourer 

First match the caravan to the car you will use to tow it, using a service such as Towcheck.co.uk

Check out practical things like storage space for sports equipment, especially if you are going to use it mainly in support of a hobby or activity.

How many people, how many berths? 

Even if there are only two of you, you may decide the additional space in a four or five berth caravan suits your needs better. The size of your car may limit the size of caravan you can tow – some people choose a smaller caravan but supplement it with an awning or tent.

Car/caravan matching and loading 

Loading and car-matching are key. Place heavy items over the axle, and try to attain the recommended noseweight for the van.

Seven per cent of the maximum technically permissable laden mass, known as the MTPLM is a good figure. The MTPLM refers to the physical limits of the caravan itself, so how much it can hold.

The bigger your car compared to your caravan, the more confident you will be. Try not to tow a caravan that weighs in excess of 85 per cent of your car's kerbweight.

Compare and contrast 

Caravan shows are great places to see lots of different makes and models and compare and contrast them.

Buy from a reputable source 

Your local NCC Approved Dealer is your best place to buy.

For security make sure the caravan is registered with CRiS. CRiS is the NCC’s caravan registration and identification scheme, like the DVLA for cars.

All caravans manufactured by NCC members have a unique 17 digit ‘VIN’ number. When a caravan is sold, the new owner’s details are sent to CRiS. Since 1997, new touring caravans have been electronically tagged as additional security. So when buying a used caravan make sure to CRiS check it for any suspicious history.

Don’t forget servicing 

Your tourer should be regularly serviced by an NCC Approved Workshop to ensure it is properly roadworthy.

New tourers under warranty require this to be done but for your safety you should always ensure regular servicing.

Decide a budget

 Put a bit aside for extras such as a caravan mover or awning, water carrier or barbeque. Maybe a flat screen TV, DVD player or even folding satellite dish. Remember, these may restrict the weight of personal effects you can place in your tourer when under tow.