Offer finance for a leisure vehicle business

Offer Finance for a Leisure Vehicle Business

The leisure vehicle market is booming, with growing interest in motorhomes, campervans, caravans, and even boats. This surge in demand is partly driven by a trend towards "staycations" and a desire for freedom and flexibility when travelling. For businesses operating in this sector, offering finance options to customers can be a significant advantage. Not only does it make these high-ticket items more accessible, but it also enhances customer satisfaction and drives sales.

In this article, we'll explore the importance of offering finance for leisure vehicles, the various finance options available, and how partnering with a finance broker like Kandoo can streamline the process for your business and your customers.

Why Offer Finance for Leisure Vehicles?

Leisure vehicles are a considerable investment for most people, with prices ranging from £10,000 for a used caravan to well over £100,000 for a luxury motorhome. For many potential buyers, paying upfront for such a purchase can be challenging, if not impossible. Offering finance options allows your customers to spread the cost over time, making the purchase more manageable and less daunting.

Here are a few key reasons why offering finance can benefit your leisure vehicle business:

1. Increase in Sales and Customer Reach

By offering finance, you open up your products to a broader audience. Many potential customers may be interested in buying a leisure vehicle but are put off by the large upfront cost. With finance options, you can attract buyers who may not have considered purchasing otherwise. This can lead to a significant increase in sales, especially for high-value vehicles.

2. Improve Customer Experience

Providing finance options demonstrates that you understand your customers' financial constraints and are willing to offer flexible solutions. This can greatly enhance customer satisfaction and loyalty. A happy customer is more likely to recommend your business to others, and positive word-of-mouth can be invaluable in growing your brand.

3. Boost Cash Flow

Offering finance does not necessarily mean that your business has to wait for the full payment. Many finance agreements allow you to receive the full payment upfront from the finance provider, which helps to maintain your cash flow. This allows you to reinvest in your business, purchase more stock, or cover operational expenses without delay.

4. Stay Competitive

In today's market, offering finance is no longer an option but a necessity for businesses in high-value sectors. Many of your competitors are likely offering finance options, and failing to do so could leave you at a disadvantage. Providing attractive finance solutions ensures that you stay competitive and continue to appeal to a wide range of customers.

Types of Finance Available for Leisure Vehicles

There are various types of finance solutions available for leisure vehicle purchases. Each option has its own advantages and disadvantages, and the best choice will depend on your customers' financial situation and preferences. Below are some of the most common finance options that you could offer through your business.

1. Hire Purchase (HP)

Hire Purchase is one of the most straightforward and popular finance options for purchasing leisure vehicles. With HP, the customer pays an initial deposit (usually around 10% of the vehicle's price) and then makes fixed monthly payments over an agreed term, typically between 2 to 5 years. The key feature of HP is that ownership of the vehicle transfers to the customer only after the final payment is made.

Advantages:

• Fixed monthly payments make budgeting easier for the customer.
• Ownership is transferred at the end of the term.
• The customer can use the vehicle during the repayment period.

Disadvantages:

• The customer does not own the vehicle until the final payment is made.
• Early repayment may incur penalties.

2. Personal Contract Purchase (PCP)

Personal Contract Purchase (PCP) is another popular option, particularly for higher-value vehicles. With PCP, the customer pays an initial deposit and makes monthly payments for a set period, similar to HP. However, at the end of the term, the customer has three options: pay a final "balloon" payment to own the vehicle, return the vehicle, or trade it in for a new one.

Advantages:

• Lower monthly payments compared to HP, as the balloon payment defers part of the cost.
• Flexibility at the end of the term: the customer can choose whether to keep, return, or trade in the vehicle.
• The customer can upgrade to a new vehicle after the term if desired.

Disadvantages:

• The customer does not own the vehicle unless they make the final balloon payment.
• Balloon payment can be a significant sum, which some customers may find difficult to manage.

3. Personal Loans

Some customers may prefer to take out a personal loan to finance their leisure vehicle. With this option, the customer borrows the full amount from a bank or other lender and repays it over a fixed period. Unlike HP or PCP, the customer owns the vehicle outright from the start.

Advantages:

• The customer owns the vehicle immediately.
• No restrictions on mileage or condition, as may be the case with PCP.
• The loan can be repaid over a flexible term.

Disadvantages:

• The customer needs to qualify for a personal loan, which may involve a more stringent credit check.
• Interest rates can vary depending on the customer's credit score.

4. Leasing

Leasing is another option for customers who want to enjoy the use of a leisure vehicle without the commitment of ownership. With a leasing agreement, the customer pays a monthly fee to use the vehicle for a set period, after which they return it. Leasing is a good option for customers who like to change vehicles frequently.

Advantages:

• Lower monthly payments compared to purchasing options.
• The customer can upgrade to a new vehicle at the end of the lease.
• No long-term commitment to owning the vehicle.

Disadvantages:

• The customer never owns the vehicle.
• There may be restrictions on mileage and condition.

Partnering with a Finance Broker

While offering finance options can greatly benefit your leisure vehicle business, setting up finance agreements and managing the paperwork can be complex and time-consuming. This is where partnering with a finance broker, like Kandoo, can make a huge difference.

Who is Kandoo?

Kandoo is a UK-based retail finance broker that specialises in helping businesses offer finance solutions to their customers. They work with a wide range of lenders to provide flexible and competitive finance options tailored to the needs of your customers. By partnering with Kandoo, you can offer finance to your customers without having to manage the process yourself.

How Kandoo Can Help Your Business

Kandoo simplifies the process of offering finance by acting as an intermediary between your business, your customers, and lenders. Here are some key benefits of partnering with Kandoo:

1. Access to Multiple Lenders: Kandoo works with a network of lenders, which means your customers can choose from a range of finance options. This ensures that they can find a solution that suits their financial situation.

2. Streamlined Application Process: Kandoo provides an easy-to-use online application process that your customers can complete in minutes. The process is fast and straightforward, allowing your customers to receive a decision quickly.

3. Compliance and Regulation: Kandoo is regulated by the Financial Conduct Authority (FCA), ensuring that all finance options offered are compliant with UK regulations. This gives both you and your customers peace of mind.

4. Dedicated Support: Kandoo provides dedicated support to both your business and your customers throughout the finance process. This means you don’t have to worry about handling customer queries or managing the administrative side of finance agreements.

5. No Upfront Costs: Kandoo operates on a commission-based model, meaning you don’t have to pay any upfront fees to offer finance to your customers. You only pay a commission when a finance agreement is successfully completed.

Why Choose Kandoo?

Partnering with Kandoo allows you to offer a seamless finance experience to your customers without the hassle of managing the process yourself. By providing flexible finance options, you can attract more customers, increase sales, and improve customer satisfaction. Moreover, Kandoo’s expertise in the finance sector ensures that your business remains compliant with all relevant regulations.

How to Implement Finance in Your Leisure Vehicle Business

Now that we’ve discussed the benefits of offering finance and the various options available, let’s explore how you can implement finance solutions in your leisure vehicle business.

1. Partner with a Broker

The first step is to partner with a reputable finance broker like Kandoo. They will handle the administrative and regulatory aspects of offering finance, allowing you to focus on running your business.

2. Train Your Sales Team

Your sales team should be knowledgeable about the finance options available to your customers. Provide them with training on the different types of finance, how they work, and the benefits they offer. This will allow your team to confidently explain finance solutions to customers and help them choose the best option.

3. Promote Finance Options

Make sure that your customers are aware of the finance options available. Promote finance on your website, in-store, and through your marketing materials. Highlight the benefits of spreading the cost of a leisure vehicle purchase, and make it clear that finance is available to help them manage their budget.

4. Offer Flexible Terms

Flexibility is key when offering finance. Work with your broker to provide a range of finance terms and repayment options to suit different customer needs. This will make your finance offering more attractive and accessible.

Conclusion

Offering finance for leisure vehicles is an essential strategy for businesses looking to grow and remain competitive in today’s market. By providing flexible finance options, you can attract a wider range of customers, increase sales, and enhance customer satisfaction. Partnering with a finance broker like Kandoo makes the process simple and hassle-free, allowing you to focus on delivering the best possible experience to your customers.

Whether your customers are looking to purchase a caravan, motorhome, or boat, offering finance ensures that they can make their dream a reality without breaking the bank. By making leisure vehicle ownership more accessible, you can drive your business forward and capitalise on the growing demand in this thriving market.