After months or sometimes even years of saving, you are ready to buy your first leisure vehicle. It is like a dream come true, but one question that bothers almost every newcomer is do caravans lose money?.
YES; all types of caravans and motorhomes depreciate just like most cars do.
But isn’t this something we are all used to? For all of our lives, we have bought cars that depreciate. Similar to cars, depreciation of the caravans depends upon the manufacturer, model, and condition.
To overcome the thought of depreciation, we suggest you look at this as a lifestyle investment. Caravanning is the best among the recreational activities. It helps you connect with the people you care about and enhances productivity.
Moreover, when you go out on an adventure, you feel a boost in your mental health.
In this article, we will try to answer as many questions as possible regarding the value of caravans.
How Much Value Do Caravans Lose Per Year?
This question is asked by the people who constantly buy the latest models of vehicles every year. Like your daily use vehicle, whether it is a sedan or an SUV, caravans also depreciate over time.
Generally, the depreciation rate is similar to the speed of depreciation of the cars, i.e., around 15% per year. To be honest, there’s no rule of thumb to determine the exact rate of depreciation.
In the end, it all depends upon the manufacturer, condition, and model of the caravan.
Price Difference Between A New And Old Caravan
Just like cars, newer caravans lose more in terms of depreciation as compared to the older models. For your knowledge, newer models will lose around 40% of their value in the first two years of their purchase.
On the other hand, older models have been seen to retain value after the first few years. After some years, the depreciation rate drops to around 10% or even less.
How Can I Stop Losing Value On My Caravan?
You can’t because it is inevitable. Depreciation is a truth that we all have to accept. No matter which manufacturer you choose or which model you get, the caravan’s value will depreciate.
You can’t hide from the old uncle depreciation, but you can do one thing. You can prevent the curve of depreciation from being very steep. How? By simply taking care of your caravan – solid maintenance and regular servicing. Anything well-kept speaks for itself, and caravans are no exception.
Suppose you have to choose between two caravans. One caravan is only two years old but is covered in dirt and scratches. The other one is seven years old but shiny as it just came out of the showroom. Both caravans have the same price tag; which one will you choose? I’m pretty sure you’ll be buying the well maintained caravan.
I hope you got my point!
So, Should I Buy A Used Caravan?
Caravans are purchased to make memories of life. They help us strengthen our relationships, get closer to nature, and most importantly, they provide us with endless relaxing experiences.
We understand that no one likes losing money, but the memories you get in return are priceless. Still, if resale is a huge concern for you, then Yes, buying a used caravan could be a good option for you.
Buy a Used Caravan If:
1. You don’t want to lose around 40% of your caravan’s value in the first two years of purchase.
2. You don’t mind having some miles on the clock of your caravan.
3. You have a tight budget.
4. You will only use it rarely.
5. Scratches and little wear and tear don’t bother you.
6. You are ready to deal with the issues that come with the aging of the caravans.
Buy a New Caravan If:
1. You are a seasoned caravanner and want the latest specs in your upcoming caravan.
2. You don’t plan to sell the caravan in the near future.
3. You don’t want to compromise on reliability.
4. You plan to go caravanning a lot.
5. You don’t care about the depreciation.
6. If you love the smell of a new vehicle.
Caravans As An Investment Opportunity
If losing money is your biggest concern, you can turn your caravan into a passive income source. The growth of caravanning trends around the UK and Europe have created this opportunity for caravan owners.
There are a lot of tourists and people who can’t afford to buy one wish to rent a caravan. If you feel comfortable, you can list your caravan on various sites and generate passive income.
Before renting out, make sure the person who is borrowing your caravan has the appropriate license to drive.
Summary
For many people, buying a caravan is a lifetime investment. Caravans cost several thousand pounds, and that’s a considerable amount for many people. The question “Do Caravans Lose Value?” strike the minds of almost every person who decides to buy a caravan.
Well, the answer to this question is undoubtedly a big YES. Although you can’t cheat the mighty depreciation, you can control it up to some extent.
Caravans lose depreciation at the rate of around 15% per year for the first few years. After some time, the rate of depreciation decreases to 10% or even less. Choosing the right manufacturer, the right model, and taking care of the caravan can reasonably control the depreciation.
The factor often confuses new buyers between buying a used or new caravan. We suggest that newcomers go for used caravans at first and then switch to new ones later. People who plan to keep their caravans in their ownerships for years should go for new ones instead.
In the end, the most important thing should be the matchless time you will spend in the caravan.
