Following on from the above discussion on the Jeremy Vine  Show BBC Radio we ask;

 

"So why does a caravan/lodge lose so much money, the instant you have bought it when pitched on a holiday park?"

 

To understand this people need to recognise that the majority of the extra costs added to the manufacturer's Recommended Retail Price are as a result of the caravan/lodge coming with a licence agreement for a certain number of years.

 

In essence you could buy a van for 30k direct from the manufacturer and place it on your own piece of land.

 

If you bought that same van on a park, in todays mad market, it could cost you up to as much as 90k, the majority of the added costs being the value of the licence to pitch the caravan for a number of years on the holiday park.

 

Now if you were to sell your 30k van, which is on your own land a week after buying it, to a trader then you would get the ‘book price’, that is the price as shown in the Glassy’s trade guide.

 

This is the same type of guide as used for the second hand car market. For argument's sake let us say the book price is shown as 25K. So in a week you would have lost 5K.

 

Now if you were to sell your van, which you paid 90k for on a holiday park to a trader then you would still only get the book value which is 25k, so you would have lost 65k.

 

From this it is very clear to see that the licence therefore has an equitable value which you should be able to realise if you were to sell your van on its pitch on the holiday park.

 

One of today's commentators did compare the price devaluation as similar to that in the  second hand car market, but the only common factors between the two sectors is the use of a Glassy’s book guide and the fact that you cannot trust a second hand caravan dealer just as much (if not more) than a second hand car dealer.

 

But, as Im am sure 99% of owners will tell you, there are very few owners who manage to sell their vans on the pitch with the benefit and value of the licence.

 

Why is this?

 

Quite simply the industry has for decades operated in bad faith towards its customers. There are endemic abuses of power, which sees companies blocking and frustrating private sales so that the van owner is forced to sell their vans back to the park at the book price.

 

The park then sells the van again for another 90k with the benefit of a licence agreement.

 

With the average expected ownership period lasting only 7 years, this cycle can repeat 3 or 4 times per caravan.

 

Yes the profits and figures are mind blowing per usable life term of every caravan, and this is exactly why the Industry operates in such an underhand way. Easy money.

 

If the industry operated in an equitable manner then you would see many more private sales with owners being able to recover the true value of their purchases.

 

If this does not sound bad enough, then consider the price paid for the 90K caravan had the owner taken finance out? We are talking over 130K, which after a week could see its value set at £25k.

 

The Banks appear complicit in the way the industry operates. As it is likely they will benefit from numerous consumers taking out finance agreements against the same van over its usable life cycle.

 

When you examine numerous Financial Ombudsman cases it is clear that the banks recognise the licences have a value, yet they use finance agreements that are drafted for use in the purchase of motor vehicles.

 

It must be the case that the Banks know the true value of the caravans is not reflected in the Glassy’s book price and therefore there is a significant risk to the consumer in the event that they are forced to sell or their circumstances change.

 

The Banks are lending money irresponsibly as they must know that the finance is buying a caravan and a licence agreement, as the Glassy’s book price  has no bearing on the price paid when finance is taken out.

 

We all know about the image of the second hand car market, but that is positively saintly when compared to this industry and the question we will be asking the FCA is,  are the Banks, and the Park operators as their  brokers, complying with their Consumer Duty?

 

Quite simply when purchasing one of these caravans or lodges, the documentation should make it very clear that you are purchasing a caravan for ex amount of pounds and in addition a licence for however many years at a separate cost of ex amount of pounds.

 

We heard prepared statements from the BH&HPA and the NCC trade associations, and yes I did spot a significantly different approach between them. One simply regurgitating the same old promotional blurb that we have come accustomed to hearing, whilst the other advising to carry out thorough research. However the truth of the matter is, as you heard from other contributors to the show, no amount of research or advance reading of licence agreements can prepare you for the shocking dishonest practices that follow your purchase.

 

The reality is the trade associations must be well aware of these practices, as the 2 smaller company park owners clearly appear to accept there were issues, with one previous staff member confirming all the ruthless practices, yet nothing seems to change.

 

It was also reassuring to hear one park owner clearly state he supported our efforts. There must be many decent honest independent park operators who are affected by the toxic reputation now attached to the industry.

 

We say to them, create your own trade association, draft your own common balanced licence agreements and create a CTSI recognised Code Of Conduct and we will support and recommend your members. Don’t carry on doing the same thing, do something different if you want to clean up your industry.

 

It would be easy for the trade associations to draft terms into the standard model licence agreement that separate out the value of the caravan/lodge and the licence agreement, so that owners can recover the true value of their purchase when they sell privately or back to the parks, why have they not done so?

 

If you think this part of the industry stinks then wait until you smell what happens to your license agreement when your park is taken over. One word, ‘putrification’.

 

Thank you to all at BBC Radio 2 for allowing us to talk about the issues owners face across the industry. I’m sure we will be talking about other areas of practice in the future.

​

​

​

​