Swim spas are a large purchase for consumers. How are they paying for them? Are they seeking financing from banks, in-house with spa retailers or using cash?
Jim Pollard, sales and retail manager for Precision Pool Construction in Amesbury, Massachusetts, says the price point is the main driver of how consumers will finance a swim spas purchase. In-house financing often occurs with inexpensive swim spas. Customers mainly finance for models around $20,000 or less, Pollard says: “Offering financing for swim spas at this price point is crucial to sales,” he adds. “It allows those who wouldn’t normally have an extra $20,000 in the bank to purchase a swim spa and enjoy all the benefits of aquatic therapy.”
Pollard says swim spa sales at Precision Pool Construction is increasing. “Besides recreation, they allow the user all the benefits of hydrotherapy and can be easily moved if they sell the house,” Pollard says.
Precision Pool Construction does its financing through Wells Fargo Outdoor Solutions and has a kiosk on the showroom floor that enables immediate credit decisions. Pollard says swim spas are often purchased in conjunction with larger projects, usually through financing with lending institutions, which is in-line with what other industry experts say.
Jacob Beninati, owner of Beninati Pool and Spa in Utica, Michigan, sees swim spa purchases often included in larger backyard projects similar to in-ground swimming pools where a customer is also putting in concrete, decking and landscaping. “Our experience shows that most swim spa buyers are higher-end customers,” he says. “Many pay cash or take advantage of their equity and use their own financing.”
Beninati says Beninati Pool and Spa’s in-house financing company, Greensky, has financed 30 to 40% of its customers over the last two years. “We typically offer a low payment option” — 144 months [at] 9.99% — “along with 12 months no-interest for our financing customers,” Beninati says. “This keeps the cost down for us and allows us to get immediate approvals.”
Once approved, Beninati says customers often shop around on rates, which he and his sales force do not mind. “This saves us fees, so my staff allows [and even] encourages customers to seek alternative financing and use ours as a fallback option,” he says. Beninati and Pollard both suggest that there are few hurdles in financing approval, likely due to swim spa buyers being financially stable. Cash purchases can be attributed to this as well.
For Al Eckert, regional manager for Litehouse Pools and Spas in Cleveland, cash purchases make up the majority of the company’s swim spa purchases. “We offer percentage discounts for customers who pay with cash, check or charge,” Eckert says. “On such a large purchase, the savings are significant.”
Litehouse Pools and Spas also offers in-house financing of 60 months, 0% interest with equal payments through Wells Fargo, and requires a minimum down payment of 10% plus tax, “but we do encourage customers to put more down to help reduce their monthly payment,” he adds.
Regarding hurdles for customers seeking financing, Eckert says they do occasionally see banks approving limits that wind up being less than the purchase price of the spa. “If we cannot get a credit limit increase for the customer, we have to collect a larger down payment to make up the difference,” Eckert says.
Even though a luxury purchase like a swim spa boasts benefits like hydrotherapy and increased fitness, it is not an investment most would take lightly. For this reason, cash purchases do happen, especially when incentivized. The consensus of the industry experts mentioned above is that swim spas are typically part of larger renovations or landscaping projects. So, consumers are able to use lending options such as home equity loans to finance the purchases. For smaller projects, in-store financing is common.