What happens to your loan if the caravan company goes bust before delivery?
If the caravan company you ordered from collapses before your van is delivered, your loan does not disappear with it. In the worst case, and it has happened to real Victorians, you keep making repayments on a caravan that was never built. Whether you have any legal recourse against the lender depends on a single question: how was your finance arranged?
What actually happens to your loan when a caravan manufacturer collapses?
A loan is a contract between you and a lender. The manufacturer is not a party to that contract. When the manufacturer enters liquidation, the lender's position doesn't change: they are still owed the money they advanced.
This is not a technicality. After Tango Caravans collapsed in mid-2024, at least one Victorian family was left making repayments on a five-year loan for a caravan they never received, according to Yahoo News Australia. Zone RV's collapse later that year left approximately 140 customers owed more than $10 million in unpaid progress payments, according to administrator reports. Since 2024, at least five Australian caravan manufacturers have entered liquidation: Zone RV, Tango Caravans, Highline Caravans, Titanium Caravans, and others.
As a customer who paid a deposit or full balance, you are typically classified as an unsecured creditor in a liquidation. Secured creditors (the banks who lent money to the company itself) are paid first. Employees are next. Unsecured creditors, which includes most customers, are last. In most liquidations, the realistic recovery rate for unsecured creditors is very low.
Does it matter how your finance was arranged?
Yes, significantly. Australian Consumer Law distinguishes between two types of financing arrangements:
Dealer-arranged (linked credit): If the dealership arranged your finance through a lender they have a formal relationship with, that lender is a linked credit provider. Under Section 279 of the Australian Consumer Law, a linked credit provider can be held liable when the supplier fails to deliver what was contracted. This gives you a potential legal claim against the lender, not just the collapsed company.
Broker-arranged (independent credit): If your finance was arranged through an independent broker, unconnected to the manufacturer, there is no linked credit relationship. Your claim is against the collapsed company as an unsecured creditor. The lender has no liability under Section 279 ACL.
This legal distinction is almost never explained to buyers at the point of signing. If you're financing a custom build or a large purchase, it's worth understanding which type of arrangement you're entering. Speaking to an independent broker who is not affiliated with the manufacturer gives you a different risk profile entirely and typically access to better rates as well.
Linked credit vs independent broker finance
| Topic | Dealer-arranged (linked credit) | Independently arranged (broker) |
|---|---|---|
| Typical setup | Finance introduced or arranged through the manufacturer or dealer; the lender has a formal relationship with that supplier | Finance sourced through a broker who is not acting for the manufacturer |
| Section 279 ACL | May apply — the lender can be a linked credit provider, with liability if the supplier fails to supply or deliver as agreed | Usually no linked credit with the builder — you generally cannot rely on Section 279 against the lender for the manufacturer’s non-delivery |
| Lender liability if the van never arrives | You may have a path to claim against the financier (as well as pursuing the company in liquidation), depending on the facts and documentation | The loan with the lender typically continues; your claim for the lost build/deposit is mainly against the manufacturer (often as an unsecured creditor in liquidation) |
| Who to contact first | AFCA (free) for complaints about an Australian financial firm; gather contracts showing how finance was arranged | AFCA if the dispute is with your lender; the manufacturer’s external administrator or liquidator for deposits and unpaid builds |
How can you protect yourself before you sign the contract?
1. Check ASIC Connect before you commit. Any Australian company's registration status and any insolvency notices are publicly searchable at connectonline.asic.gov.au. Voluntary administration notices, an early-stage warning before liquidation, are listed publicly. This is a free, two-minute check worth running before you sign anything.
2. Pay your deposit by credit card where possible. Credit card charge-backs are available when goods paid for are never delivered. If the company enters liquidation, contact your card provider immediately: time limits vary by card scheme and have been reduced in recent years, so do not delay.
3. For custom builds: tie payments to milestones, not dates. A contract that releases funds on specific dates regardless of build progress exposes you to significant loss if the company collapses mid-build. Negotiate for payment milestones tied to verified physical progress: frame completed, fit-out completed, pre-delivery inspection passed. Any manufacturer that resists milestone payment terms should be treated as a red flag.
4. Keep the final payment until you have physically inspected the finished van. Industry guidance from RAC and the Caravan Industry Association is clear on this: the full balance should not be paid until you have personally seen and inspected the completed caravan. A request for full payment before handover, particularly for a custom build, is a warning sign.
5. Ask whether your finance is linked to the dealer. Before signing any finance document, ask your broker or lender: "Is this a linked credit arrangement with this manufacturer or dealer?" A good broker will answer this clearly.
If you're already in a position where a manufacturer has entered administration, contact AFCA, the Australian Financial Complaints Authority, which provides free, independent dispute resolution for financial complaints including linked credit disputes. You can also estimate the total loan cost to understand your exposure if repayments continue.
Frequently Asked Questions
Do I still have to repay my loan if the company went bust before delivery? In most cases, yes. Your loan is between you and the lender: it doesn't end because the manufacturer collapsed. Whether you have recourse against the lender depends on whether your finance was linked to the dealer.
What is a linked credit provider and why does it matter? A linked credit provider is a lender with a formal arrangement with a specific dealer. Under Section 279 of the Australian Consumer Law, they can be held liable if the supplier fails to deliver, giving you a legal claim against the lender, not just the collapsed company.
Can I get my deposit back if I paid by credit card? Possibly. Credit card charge-backs are available when goods paid for were never delivered. Contact your card provider as soon as the company enters liquidation: time limits vary by card scheme, so act quickly.
What is my priority as a customer in a liquidation? As an unsecured creditor, you are behind secured creditors (banks) and employees in any distribution. Recovery rates for unsecured creditors in Australian insolvencies are typically low.
How can I check if a company is in financial trouble before signing? Search the company on ASIC Connect for insolvency notices. Also check for voluntary administration notices, which are an early warning before liquidation.
This article is general information only and does not constitute financial advice. For advice specific to your situation, speak to a licensed finance professional with one of our listed brokers or visit ASIC's MoneySmart website.