Caravanning in a brand new caravan is one of life’s many simple joys. You can relax and be at one with nature while enjoying the comfortable luxury of your caravan. But, it can be difficult to know exactly how to go about purchasing a caravan or other leisure vehicle.
You should send in an application for leisure finance before caravan or boat shopping to ensure you have your finance pre-approved. The application requires certain documents in order to be approved, as well as good credit history. You will also need to look for insurance for your new caravan, as leisure finance requires all vehicles to be insured. Read on below for some top tips on applying for leisure finance.
Get your documents ready
The most important first step in applying for leisure vehicle finance is to have the right documents ready for your lender. These documents are as follows:
- A valid copy of your South African Identity book or card
- A valid and updated driver’s licence or skipper’s licence for those buying a boat or a jet-ski
- Proof of income such as a recent payslip
- Proof of residence such as a three-month-old utility bill
- Details of your insurance
When you go to the dealer or if you are looking at buying from a private seller, you will have to take along the following documents:
- A signed marital status certificate if buying a leisure vehicle with your spouse
- The original versions of the above documents, as well as copies for the dealer
- Proof of loan approval with a valid stamp and signature from your lender
Check your credit history
As with any type of finance, leisure finance requires a credit history check. It is important that you know your own credit history and rating before you apply so that you can query any discrepancies that you might notice on the report.
Once you have checked your rating, you can also take steps toward improving it before you apply for finance. Be sure to clarify any mistakes you see on the report with the relevant bureaus. For example, you can pay more than the set amount on your credit card or your accounts. This will show your lender that you are working towards lowering your risk status, which will make it more likely that your finance application will be approved.
Know your budget and affordability
It might be fun to look at the most luxurious models of a caravan or boat, but if you cannot afford these, you will be left disappointed. You will need to set a strict budget for yourself, as well as being aware of how much you can repay each month.
You can calculate your affordability using an online calculator or by drawing up an expenses spreadsheet and adding your monthly expenses into it. By knowing your affordability, you can decide on how much finance to take out. If you are not sure how to calculate your affordability, you can take your payslips to a financial adviser and ask them to help you draw up a budget that will fit your needs and pocket.
Shop around for the vehicle
Once you know how much you can afford, you can start looking for the perfect caravan or boat to suit your needs. Your lender will likely have a list of dealers who they approve of, but it is important to look at more than one in order to find something you can afford and that you like.
Be sure to get quotes from more than one dealer when deciding on what vehicle to choose, as this will allow you to compare prices and find one that is more affordable. Look at what each dealer is offering and also ask your family and friends for advice on which offer seems to best fit your budget and your needs. Once you have found the perfect leisure vehicle for you and your family to enjoy, you can send the quote to your dealer and see if they approve of your choice.