T5 /T6 campervan Hire business New Forest

[Neilvw]

Hi I'm new here !!!

I live in fordingbridge in the new forest and Im looking at buying a campervan vwT5 or T6 model and renting it out for weeks / weekends and mon- fri hire. I've been researching lots lately and I'm now looking at how I can finance the purchase of the vehicle. I have some cash around 10k and will be looking to buy something 1-2 yrs old so will need to borrow 15-20 k. I've always been able to purchase my vehicles with cash in the past but as this will be a business venture with the intention to build up the amount of vehicles over he coming yrs I'm wondering if anybody has any advice on the best way to finance the 1st van and then further vans going forward.
Any help would be much appreciated

 

[RedEvo]

Bank loans are cheap just now. £20k over three years would be about £600/m (I think). That not work for you?

d

 

[Neilvw]

Hi thanks for your reply and yes a bank loan would work - guess I'm just checking whether there are any other sources ie start up loans or new business loans out there that I may be eligible for. I would need to add more vehicles once I built up a large enough customer base and wonder how I'd further finance the purchases ?

 

[Deleted member 226268]

Obtaining comprehensive insurance for this venture might be a very expensive nightmare.

What will you tell the insurance company ?
I am going to rent out my £ 20,000 VW Van every week / weekend to any Tom, DIck and Harry, dogs and Kids.

Before thinking about buying a van, you should really go to see insurance companies first.

You will probably also need Public Liability Insurance on top of this.
In case little Jimmy breaks his neck falling out of the back of the camper-van.

Then there are the hidden dangers of the camping Gas equipment,
or rather, the people trying to use one for the first time.


The rental costs that you would need to charge per day to cover insurance and van damage,
may be just too much for anyone to consider renting out your van.

You are not allowed to park overnight just about anywhere you like in the New Forest, as you should already know,
because of the fire risks, Health and Safety hazards, Animal Rights, frightening Deer and Squirrels, etc.

https://www.forestry.gov.uk/forestry/infd-97rhwg

You have to park up overnight on one of the approved camping sites, which will be an extra £30 a night.

The risks are just too great, how much competition have you seen for your idea ?

.

 

[Neilvw]

Hi I know what you mean about letting tom dick / harry and kids loosein it but guess that's what u have to do to get a return on your investment.I have found out about insurance which can be purchased for 6 8 or 12 month periods or at the beginning when bookings are lower can be insured daily. There are currently 3 other camper hire businesses in and around the new forest area which are a mixture of old classic vw and newer vw conversions so their appears to be a market just need to understand it more and work out how I can add value to the market and grow steadily ... just need a few more questions answered 1st

 

[Alan]

There certainly is decent demand for campervan hire. Vans are expensive and so hiring makes sense rather than buying for the occasional user. They also make sense for visitors, say from Aus.

But because you are in the New Forest doesn't mean that is where your vans will be used, people who use campervans travel hundreds of miles per day, every day. They will hire them to do a round trip of the UK, or a trip including Europe ( consider left hookers )

 

[Mitch3473]

To repay 20k back per vehicle you're going to need decent utilisation figures, can you be sure of that in what is a seasonal venture.The last thing you want is your vans parked up for 5 / 6 months earning you nothing but costing you plenty. The minor upside will be your resale value if the vehicles are looked after and maintained.

 

[Alan]

Campervans depreciate quite slowly compared to cars and vans.

The original question was how to finance - I think the only suggestion was bank loan.

What about crowd funding, camper, especially VW appeal to younger hipper people. Crowd funding sites give away deals, a weeks in season hire of aVW is typically £900. You could give week hire offseason for £500 , weekend hire package £250, £200 off hire for £150 etc sort of thing on your crowd funding page.

Double wammy, gets you 'pre sales', and also gets you publicity / contact lists.

edit

In fact its such a good idea, I'm going to get my spreadsheet out and do some calcs, I have a yard at the end of my garden big enough for 3 vans.

 

[JEREMY HAWKE]

I think it is profitable when you have a few vans or a lot of vans to rent out . I don't think it is viable with one van .

 

[Mitch3473]

I think it is profitable when you have a few vans or a lot of vans to rent out . I don't think it is viable with one van .

Agree. It's a fine balancing act. You cannot have just one van and get good utilisation, it's too risky with back to back booking but you need more vans to accommodate that and with that comes expense hence the high turnround rate needed.

 

[Neilvw]

Thanks for all your input it's much appreciated - I have another question that maybe somebody knows the answer too...
Q I am now looking at the possibility of buying a campervan business that has been established for 3 yrs and without going into too much detail I've been offered to purchase the business with a website to include booking page a Facebook page and future bookings which I currently don't have a value for but would estimate to be 5-7k during aug /Sep if I were to sort out the purchase and legal paperwork before 1st August. Is a value for this a fair price at 15k and if anybody knows what would be my next step to get a valuation for the business ?

 

[MikeJ]

We've no idea of the asset value, debts, outgoings or liabilities.

Without wishing to appear rude, if you're asking such a question you're really not ready to start running a business.

 

[Neilvw]

There are no assets except the website and future bookings - no debt-or liabilities

 

[Mitch3473]

So basically you're looking at paying 15k for just a website and some names and addresses.
What about a vehicle..?
Have you seen any certified accounts ?

 

[Mark T Jones]

Interesting how many people have invented their own questions to answer

To answer the question that was actually asked:

Banks are relatively unlikely to lend - but it's worth asking.

Start Up loans would be well worth trying - they will require a thought-through business plan, but will allocate a mentor to help with this.

Alternatively, there are hire purchase / leasing alternatives.

 

[Neilvw]

Mark T yes the 15k would be for the current website - the rest of this years bookings (5-7k estimate) - it was originally being sold for 40k with a vehicle so I'm assuming the vehicle would have been valued at 25k - my next step is to get the 3 yrs accounts from them to assess whether their 15k valuation is correct. I will also be getting a business plan together to try for a start up loan or get a bank loan to purchase a vehicle - thanks for all your input sorry the details have been vague

 

[Alan]

Mark T yes the 15k would be for the current website - the rest of this years bookings (5-7k estimate)

If the website has a great domain name & great SEO credentials, it might be worth something, otherwise, it is only worth what it would cost to build. I can't estimate that ( but PM me the domain and I will ).

The future orders are worth the the profit on the future orders, reduced by the probability of cancelling / not paying. So based on £5-7k orders that might be £2-3k?

So that leaves some £13k for the website, which might be OK if it is fantastic & ranks well, otherwise, sounds steep.

p.s. the fact that they have disposed of ( or removed them from the deal ) the van(s) should be an indication that they couldn't make this business worthwhile to them. Something to sit back and think about.