A Dummies Guide To The World Of Holiday Homes
There has been a huge industry built up in the United Kingdom around selling the prospect of a Holiday Home sat on the land of others. The homes are known as “Static Caravans” or “Lodges”and the land owned by others is know as a “Holiday Park”. This article is to make uninformed buyers aware of the financial dangers of entering the waters around a Holiday Park as there are sharks in those waters ready to take a financial chunk out of any unsuspecting buyer.
To begin your education, with respect to park homes, be aware that companies that operate parks have a theme which is sell you a lifestyle of leisure on the park which, unknown to the buyer, will be financially very heavy . So a word of warning, any string of words which includes “park” and ” leisure” should be avoided unless you can afford to be the park owner. There is one fact, for sure, and that is the scales of power are heavily weighted in favour of the Holiday Park sharks and once you are in the water it is very difficult to get out without losing an arm and a leg to the sharks. So, before you think of entering the waters be aware that you are buying into a very expensive “lifestyle” and once you have bought into the “lifestyle” there is no way you can recoup the money that you have laid out. However, on a winters evening, whilst reading through glossy brochures of Holiday Parks, it is so easy to be bowled along and, as spring approaches, to visit a Holiday Park or even book a week at a park to “test the waters”. Soon, you are on the start of a new journey, a new beginning for you and the kids. You may have arranged to have a holiday at a park and be greeted on your arrival by a beaming representative of the park. You and your family, most probably, will be swept around the Holiday Park on a golf buggy passing by all the amenities whilst accompanied by waves of the representatives hand as he points out the wonderful lake, the pristine setting, the golf course, the Club House, the indoor swimming pool, the sauna and steam room, the beauty parlour, the tennis courts and the magnificent backdrop of the mountains and sea. You and your family are breathless when he takes you to the string of show caravans and shows you inside.
A Dummies Guide To The World Of Holiday Homes : How To Lose Your Money
Your guiding salesman, then, makes you an offer that should you be able to place a small amount of money with him, that day, he will secure you a big discount on the yearly site fees. Of course , this holiday was a dream for you and the kids and, maybe, you can stretch your budget to cover the cost of buying a caravan for next year. At this point, it should be understood that the caravan industry is a “closed shop” and it is made extremely difficult to buy a caravan except through the sales people at the Parks.
In fact, the final price that you will pay can be broken down as follow:
a) The cost price of the caravan to the makers
b) The profit to be made by the makers on top of the cost of making. This is called the ex-works price
c) The ex-works price then has a further increase placed on it as a handling charge by the Holiday Park
d) The caravan has to be transported from the makers works to the Holiday Park. You pay for the truck and any other handling costs such as a crane
e) Then you pay a charge for entering onto the Holiday Park with YOUR caravan. This is a significant charge .
f) Then you have to pay insurance.
g) There is then the site fee for the year to be paid.
It is typical for a ex-work price of £26, 000 to be driven up by the other costs to £49,000 and the only element that you can have a return on is the ex-works price. Accordingly, the difference between the ex-works price and the final price, in this illustration, is £23,000. Here comes the “rub”, the £23,000 is in the hands of the Holiday Park and is out of the caravan owners control
You will be shocked to learn that the caravan ex-works price will have a mark up of up to 120%. Think of it as buying two normal price caravans straight out of the workshops for the price you are paying to the Park Home owners for one, and it still has not left the makers. Further , when requiring to sell your caravan the sales people will offer no help to you but will , legally, apply a 15% plus VAT charge against the money that is paid by a buyer of your second hand caravan
So let us start with where the caravan is made and work away from there. There are a number of well known and reputable caravan manufactures in the UK and they will make a caravan to order. Of course, they need to keep there caravan design evolving with the buyers changing tastes but they cannot change their designs daily as that would cost to much. Accordingly, the caravan industry has a general understanding that a Model Design change will happen on the 1st September of one year and that model will be the current model until the 31st August of the following year. Now this raises a problem as to the “year” of the model as two designs may be produced in the same year. Therefore, the practice is to start the building of, say, a 2017 model on the 1st September 2016 and this same design and model year will be produced until the 31st August 2017 after which on the 1st Sept 2017 the model year will be a 2018.
This may lead to some confusion when a buyer is discussing the purchase of a caravan. For example, a sales person may have, say, a caravan model year 2016 available built in August 2016, Should a buyer be making a purchase of a NEW DESIGN van in September 2016 they may well find that they will be sold the caravan built in the August 2016. For all intents and purposes it is a new van. However, it is an “unused” caravan as a “new” caravan would be to the new design specification which commenced construction on the 1st September and designated a 2017 model. This fact matters as, in effect, should the caravan be required to be sold, the year shown to the World and considered by the Park Owner and the trade would be 2016 not a 2017. Also, as the life of a caravan is considered as 10 years the purchaser of the caravan has effectively, lost a year of its life with respect to documentation. So new buyer, take a step back and ensure the documentation is showing the correct MODEL year , not calendar year that you believe you are buying.
Very soon you will need to pay your hard earned money over to buy the caravan. So what are you paying for. It has been mentioned that the caravan, very probably, will be built by a reputable company who will want a price for their caravan as it is handed over at the gate of their construction premises. This price is understood as the “Price ex works” . The caravan will need to be loaded onto a transporter truck and transported to the Holiday Park of choice There it will be offloaded from the transporter, hauled around to actual designated plot of choice and lifted onto the pad. Then the maintenance men of the Holiday park will connect all the services ( Water, gas, electric, and drainage) and tie the caravan down to the pad. So there is a bill to be paid with respect to the ex-works price ( heavily marked up), the transportation, the cranes to lift the caravan, and the man hours to site the caravan. Added to this is the mark up added to all the individual bills, made by the site Owner, for “handling of documentation”. Accordingly, the build price of a caravan ex works could be in the order of £2o,000 but the final bill to the new owner will be in the order of £50,000. Then you pay the annual site fee which can be in the order of £6000. But you have made it, you have a holiday home to be proud of and that will give you many happy hours of joy.
A Dummies Guide To The World Of Holiday Homes : To Sell and How To Lose More of Your Money
Some years later, a change of job location or a change in financial well being brings you to have to consider selling the caravan. You will have by that time become quite close to the parks staff and it seems the selling of a caravan should be not to difficult. You may or may not have checked the Park Web site to find that they do not show second hand caravans being sold by owners. A visit to the sales people is made and you are told that it is YOUR caravan and you need to sell it. The park sales people describe the ways it may be sold. Basically, one of three ways as follows:-
A) On Park. This method shows your caravan in its best surroundings and with all the amenities it should sell quite quickly. However, the contract you signed all those years ago stipulates that you will pay to the Park owners 15% +VAT of the Price that it may be sold at to any new owner. When the question is raised “what service do I get for the 15% /” the answer in “nothing” although the words used to describe “nothing” may lead you to believe different.
At this time, it has to be realised that the Park Owner has also a first refusal to buy the caravan at any subsequent stage as your price is lowered to gain interest. Accordingly, the Park Owner is sitting on the fence, like a buzzard watching death, as the price of asking for your caravan is forced downwards. It has to be understood that as you cannot be there 24/7 to sell the caravan the Park Owners are there 24/7 to deter its sale as they have a conflict of interest with caravan owners when it comes to the sale of second hand caravans
B) Off Park. This method will entail the caravan owner either selling it before it is removed from the site or having a suitable location to place it whilst finding a new owner. Without the Park facilities and surroundings the selling price must be expected to be much lower
C) To the Trade. This method is to sell it to a third party, whose business is within the caravan industry but not associated with the Park upon which the caravan is currently located. If the monies to be released, by the sale of a caravan, are urgently required then selling to the Trade is the quickest method but also the least attractive from a financial point of view. However, it the price has been forced to its lowest value, by the buzzard sitting on the fence, the park owner will step in and buy it at this lowest price before it can be sold to the trade. The bottom line is that you will buy a caravan at £50,00 and it is very difficult to sell it except as a trade-in for something in the order of £12000.
There is, between arriving on a Holiday Park and buying your first caravan and, then, selling your caravan and leaving the Holiday Park, the possibility that you will take advantage of the Holiday Park caravan upgrade opportunities. Here, the Holiday park sales people will “do you a deal” in which for a fee you can move to a caravan with a higher specification. It looks good but it is more outlay of money that you are bound to lose in the long term.
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