How should I finance a boat?

[alansauce]

My family isn't the most wealthy family, but we rented a boat a few years back, and thoroughly enjoyed the family time. Having teenagers, they don't always want to be surrounded by their family, but when you're on a boat, in the water, there isn't anywhere you can go. The family time and bonding experience was phenomenal. So ever since then, I've been interested in buying a boat.

I went to the boat shows over the past few years, and the dealers have told me, that since I am a beginner, I should buy a used boat.

Now, I am not sure how to go about doing this?
Is it possible to take out a loan for a boat, or is it difficult?
Should I finance it, if so, how long should I choose?
If you have any tips on purchasing a boat, it would be very appreciated.

Thanks

 

[Sikiguya]

Re: How should I finance a boat?

You probably need to provide some more information. This forum is full of people with great advice. Where are you going to boat? In a lake, river, large body of water? What are you wanting to do? Wakeboard, waterskiing, tubing, or just crusing? How many people will be in the boat? Once you narrow down the type of boat, then you need to figure out how much you are wanting to spend. You mentioned that you are not the most wealthy family...you need to decide what year boat you like. I know that I prefer the modern boats...but looking at some of these vintage boats on the board, you might decide differently. Give more info and there will be plenty of help! Good luck!

 

[rjlipscomb]

Re: How should I finance a boat?

Agreed, need more of your thoughts on where, when and how you want to go boating. IMO, stick with a newer boat. Older boats are nice projects that take time away from the family. You want more family time, and your kids will probably borrow the boat as well, you need something reliable with minimal maintenance. Buy new, typically lower rates and longer terms. Buy used, someone else paid for the biggest part of the depreciation.

 

[tashasdaddy]

Re: How should I finance a boat?

the best place to finance a boat is your local bank, or credit union. buying a used boat is the best bet, because the original owner ate the showroom depreciation. boat typically depreciate 20 % when they leave the dealer. then an additional 10 % for the next 3 years.

do not get into an upside down loan on a boat. there are many boats on the market currently, that have upside down loans.

count your boating expenses, as entertainment $, not an investment.

you do not give the # of children or ages, this is a big determing factor in choice of boat, do they want to do water sports?

1st you need to decide what you want to use it for, fishing, cruising, or water sports.

2nd how many people adults, children you want on board of the average outing.

3rd outboard, inboard-outboard, or inboard power plant.

4th Budget, what you want to pay, and what you are willing to pay, when you find
Exactly what you want.

You can hire a marine surveyor, to inspect the boat, or you can do it yourself.

You are mainly looking for soft spots in the deck, transom, cracks, all signs of a rotten, under frame. You walk all over the deck, that a mallot, or hammer with wooden handle, using handle, tap all over the transom, a shape rap is good solid base, a thud, is questionable base.

The motor should be clean, no spots where the paint is discolored, or pealing from heat, having run hot. (This part for outboard motors Compression should be atleast 100psi, and within 10% of each other,)
Spark on all cylinders, good pee stream, check lower unit for water in oil.

The overall condition of the boat will tell you a lot, as to how it has been maintained.
boat motor combo, A 30 year old may be in better condition, than a 3 year old

 

[BWR1953]

Re: How should I finance a boat?

If you have to borrow money to get a boat, then you don't belong in boating.

 

[skargo]

Re: How should I finance a boat?

If you have to borrow money to get a boat, then you don't belong in boating.

My thoughts exactly, if I can't pay cash for a hobby/lifestyle, I put it off until I can SAVE for it. Novel concept I know, but it worked for my parents and previous generations.

And you can find great deals on older boats, not everyone neglects them or leaves them uncovered in a field. Mine is 31 years old and was turn key! I got it for a song, and have seen many others good, quality, older boats for little money out there.

 

[windsors03cobra]

Re: How should I finance a boat?

So does one need to pay cash lump sums to get into housing as well ? Big $$$ cats over hear I guess.

Finance wherever you get the best rate.
I am also a big fan of paying cash for a boat but have bought many a car on a loan, I bought a performance car on a loan and so do many others.
With that said you can really get a lot for a little with a ten year old boat and with a careful inspection and a few piece parts have as reliable a boat as a new one. IMO, for 25% of new boat money.

 

[BWR1953]

Re: How should I finance a boat?

So does one need to pay cash lump sums to get into housing as well ? Big $$$ cats over hear I guess.

Finance wherever you get the best rate.
I am also a big fan of paying cash for a boat but have bought many a car on a loan, I bought a performance car on a loan and so do many others.
With that said you can really get a lot for a little with a ten year old boat and with a careful inspection and a few piece parts have as reliable a boat as a new one. IMO, for 25% of new boat money.

Comparing a boat to real estate is specious at best, if not outright ludicrous.

 

[skargo]

Re: How should I finance a boat?

Comparing a boat to real estate is specious at best, if not outright ludicrous.

Right on, apples to oranges.

Some feel they have to keep up with the jones I see.

 

[tx1961whaler]

Re: How should I finance a boat?

So does one need to pay cash lump sums to get into housing as well ? Big $$$ cats over hear I guess.

That's the kind of thinking that got in in the big mess we're in right now. Used to have to have a 20% down payment to get a home loan.

 

[witenite0560]

Re: How should I finance a boat?

I would recommend finding a good older, used boat and paying cash. You can find some really nice boats for around $1000 and if you don't have it, it won't take long to save up. Tell the kids your plans and make it a family goal. I bet you'll be surprised how much they'll help.
Then, when you get a boat, make a few improvements. Include the kids with those too. Then, if you want, you can sell it for a bit of profit and upgrade a bit. Teaches the kids a good lesson in the process and keeps you out of debt.
In my opinion, the whole credit system is a scam. The only thing I'll borrow money on is a home.

 

[redone4x4]

Re: How should I finance a boat?

for some larger boats, i could see financing it. Right now, I would be surprised to find a lender for a boat/RV vehicle at all. Alot of us paid $1000-2000 for our boats, but I guess we need to know what kind of boat it is you are looking at. simple bowrider?$3000-$4000 gets a really nice one these days, cash. a 30 ft cuddy cabin less than 10 years old? financing might be the way to go.

 

[lowkee]

Re: How should I finance a boat?

If you have to borrow money to get a boat, then you don't belong in boating.

This is the exact rule all boaters should live by. Boating is expensive not only on the cost of the boat, but fuel and maint costs as well. It isn't a car where the big expense is getting it. If you can't pay cash for a boat, you certainly can't afford to own that boat. Either save your pennies and get a boat you want or buy a boat (likely one way smaller, less HP than you are dreaming of) you can afford.

I know plenty of people with sweet looking 27' cabin cruisers which never, ever move, since they can't afford the loan, the gas and certainly not the maint costs. A boat in the water is priceless, a boat sitting in your yard, no matter how nice, is worthless.

 

[H8tank]

Re: How should I finance a boat?

If you can afford a few hundred a month, I would look for something 2-4 years old with low hours and well maintained. Finance for as short a term as you can.

With teenagers, I would suggest an 18'-21' open bow/deck boat, nothing smaller than a 4.3 V6. will have plenty of room and be good for water sports.

Compare rates at your bank or credit union, if you can't afford the boat with anything longer than a 5 yr note then I would suggest lowering your expectations.

I wouldn't wait, life is short, enjoy it now.

Also, don't get suckered into a 10+ year old boat, your first one should be as low maintenance as possible.

An example of a boat in that range would be $15,000, 10% down financing $13,500 for 5 years is $268/month. Figure $500/year for insurance. Can you afford that?

 

[C&E1]

Re: How should I finance a boat?

So does one need to pay cash lump sums to get into housing as well ? Big $$$ cats over hear I guess.

Finance wherever you get the best rate.
I am also a big fan of paying cash for a boat but have bought many a car on a loan, I bought a performance car on a loan and so do many others.
With that said you can really get a lot for a little with a ten year old boat and with a careful inspection and a few piece parts have as reliable a boat as a new one. IMO, for 25% of new boat money.

Yup! I did get into my second house with cash in one lump sum payment to the bank when the lender wanted too much points and loan fees to borrow $150k for an investment property. As for cars, I never pay cash for a new car since I factor the monthly payments as my cost of transportation. To me no matter how people want to enjoy their life, they should do it within their means, be it cash or payments.

 

[109jb]

Re: How should I finance a boat?

It doesn't necessarily cost a lot to get into boating. I bought my first boat for $1200. Coincidentally I just sold it for that same price. I used that boat for 8 or nine year and my family had aa blast in it. It wasn't pretty, but had a good outboard (1976 Johnson 70 hp) that ran like a top for as long as I owned it. The boat was a Starcraft supersport 16'.

As for financing, I do not finance toys. Heck, I haven't even financed a car in the last 10 years. A boat does not provide shelter from the elements, transportation for work, school, etc., and is therefore NOT a necessity and can't be compared to financing a house in any way shape or form. I have a good job and am sure i could go out and finance a brand new $40,000 boat if I wanted to, but to me that is not a good decision. I choose buy boats that I can afford to pay cash for. My current boat I have about $3000 into. It is in rebuild, but will have no more that $3500 in it and it will do everything that a new $25,000 will do.

I would suggest shopping around for a while on the used market, learing about boats, deciding what you really want a boat for, etc. There are many things you need to decide, like I/O or outboard, Aluminum or fiberglass, bowrider or not, pleasure or fishing or both, inland laakes and rivers or big water capable, how much boat can your current car/truck haul or will you slip it, etc.

There are a lot of used boats out there that can be had for not much money. As an example, just around the corner from me there is a late 80's Rinker bowrider (18 foot or so) that is in fair shape, solid floors, useable but worn interior, galvanized roller trailer, 130 hp I/O for $2500 asking price. Could probably drive away with it for $2K. I'm an outboard sort of guy, so I didn't look any further at it.

 

[Reg312]

Re: How should I finance a boat?

Boats depreciate faster than cars and harder to sell if you run into money problems. If you can't pay cash, don't buy. New you get may get reliability, but if you beach it at 30 mph like I did mine, can you afford to rebuild the lower unit? Warranty won't cover it.

I've owned 2 1970's tri hulls. Look around and you can get some real nice clean units for $1000 to $3000. Only regular maintenance required except where operator damage has been done.

 

[H8tank]

Re: How should I finance a boat?

Not everyone wants to own a 30 year old $1500 boat, or spend boating time repairing it.

 

[Reg312]

Re: How should I finance a boat?

What you want and what you can afford are 2 different things. My choice is to not go in debt. Buy used, pay cash and save and move up from there. But debt scares me. Especially now.

 

[BWR1953]

Re: How should I finance a boat?

Not everyone wants to own a 30 year old $1500 boat, or spend boating time repairing it.

Who put those price or age limitations into place? Didn't see that anywhere.