Thinking About a Shed on Finance? Read This First
Paying monthly for a shed — even with poor credit or no deposit — can seem like an easy option. But terms, hidden fees, and what you actually get can vary widely. Knowing how shed financing works helps you avoid surprises and make a decision that fits your situation.
How shed financing really works
Shed financing typically operates through hire purchase agreements, personal loans, or rent-to-own schemes. With hire purchase, you pay monthly instalments but don’t own the shed until the final payment. Personal loans give you immediate ownership but require credit checks. Rent-to-own arrangements often accept poor credit but charge significantly higher total costs. Most shed retailers partner with finance companies to offer on-the-spot approval, sometimes within minutes. The finance company pays the retailer upfront, then you repay over an agreed period, usually 12 to 60 months. Interest rates vary dramatically based on your credit score and the financing method chosen.
Hidden costs of buying a shed on payments
Beyond the advertised monthly payment, several additional costs can substantially increase your total expenditure. Arrangement fees typically range from £50 to £200, while early settlement charges may apply if you pay off the balance ahead of schedule. Insurance requirements often add £10 to £30 monthly to protect the finance company’s asset. Delivery and installation costs frequently aren’t included in financing deals, potentially adding £200 to £800 depending on shed size and site preparation requirements. Some agreements include maintenance packages or extended warranties that inflate monthly payments. Default charges for missed payments can reach £25 per occurrence, plus interest continues accumulating on outstanding balances.
What to check before financing a shed
Examine the Annual Percentage Rate (APR) rather than just monthly payments, as this reveals the true borrowing cost. Verify whether the quoted price includes VAT, delivery, and installation, or if these represent additional expenses. Check the minimum contract period and any penalties for early termination. Confirm who owns the shed during the payment period and what happens if you move house or can no longer make payments. Read terms regarding maintenance responsibilities, insurance requirements, and what constitutes default. Compare the total amount payable against purchasing outright or saving up, as the difference often exceeds 50% of the cash price.
Shed financing with bad credit — know the risks
Poor credit financing typically involves higher interest rates, often 20% to 40% APR compared to 5% to 15% for good credit customers. Rent-to-own schemes accepting bad credit frequently charge double or triple the cash price over the contract term. Missing payments can trigger immediate repossession without refund of previous payments made. These agreements rarely help improve your credit score, unlike traditional loans that report positive payment history. The convenience of guaranteed approval often masks extremely unfavorable terms that can worsen financial difficulties. Alternative options like credit union loans or saving for a smaller cash purchase usually provide better long-term outcomes.
Monthly shed payments: smart or costly decisions
In the UK, shed financing has become increasingly popular as garden improvements surged during recent years. Many retailers now offer zero-deposit deals to attract customers, but Financial Conduct Authority regulations require clear disclosure of total costs. Consumer groups frequently warn about the high cost of shed financing, with some agreements costing three times the cash price. Interestingly, shed financing defaults have remained relatively low compared to other consumer credit, partly because the asset remains on the customer’s property and retains some value. However, Citizens Advice reports increasing cases of people struggling with multiple home improvement finance agreements simultaneously.
Real-world shed financing costs and providers
Several major UK shed retailers offer financing options with varying terms and total costs. These arrangements demonstrate how monthly payments can significantly exceed cash purchase prices over time.
| Provider | Shed Price | Monthly Payment | Total Cost | APR |
|---|---|---|---|---|
| Garden Buildings Direct | £2,000 | £89/36 months | £3,204 | 29.9% |
| Tiger Sheds | £1,500 | £67/30 months | £2,010 | 22.8% |
| Ace Sheds | £2,500 | £95/48 months | £4,560 | 35.4% |
| Dunster House | £3,000 | £125/36 months | £4,500 | 28.9% |
Prices, rates, or cost estimates mentioned in this article are based on the latest available information but may change over time. Independent research is advised before making financial decisions.
Making the right choice for your situation
Consider whether you genuinely need the shed immediately or could wait while saving the cash price. Calculate how much you’d save by avoiding financing costs and whether that money could be better used elsewhere. If financing seems necessary, compare personal loans from banks or credit unions against retailer finance deals, as these often offer lower rates. Remember that sheds depreciate quickly, so you might owe more than the shed’s worth for most of the contract period. For many people, buying a smaller shed for cash proves more financially sensible than financing a larger one that strains monthly budgets and costs significantly more overall.
