How should I finance a boat?

[cwhite6]

Re: How should I finance a boat?

I agree with the people saying save up the money and buy a boat. If you dont have the money up front for something, then you cant really afford it. I paid for my boat in cash. Didnt have to finance a dime and im not rich but i am debt free so i can do that. If you like to use the banks money to buy things, remember its never really yours till you pay it off. As long as you can stay debt free, you can afford to buy things outright. If you finance everything and have credit card debt, you will always be in the hole wondering when it will end. Its a never ending cycle, dont get used to it. Now financing a house is a different thing altogether. Boats are pleasure not needs. I WOULD NOT finance pleasure.

I disagree with this first statement. I cannot afford to drop $25k on a brand new car at the moment, but I can afford the payments easily and I have enough equity to take care of it if something happens. I have a very good job and I make dang good money. However, I for one do not enjoy working on things when I could be enjoying them. I will take the new or slightly used with the warranty anytime. Yes, I could save up the $25k for that new car or boat and pay cash for it, but I have lost the couple of years that would take. That is time I could be enjoying the boat with my kids and wife. When I buy my bow rider I am wanting, I will get a newer one. Some of you like to save and save and pay cash and that is fine. But, I use credit wisely and only for what it is meant for. I do not have credit cards. I have a house payment and a car payment. I am fine with that. It may not be intended, but some of the comments on here sound pretty high and mighty.

 

[jkust]

Re: How should I finance a boat?

Sounds like you got a lot of very conservative advice so far. I am likely the most fiscally conservative person you would ever meet. That said having lived far below my means for a long time lets my family lead a relatively lavish lifestyle these days but there were lots of lean years of saving, education and hard work. Like many that have responded so far, cash is king for me. If the cash isn't available, we don't buy it. That said you don't care about our situations and want to get into boating. The fact is I don't blame you. Some of the best times of my childhood revolved around boating and frankly even if I didn't have money, I might break my no financing rule for a boat.
I can tell you my sister just purchased a used boat from a dealer. She got ripped off on the purchase price and would not take advice but she got a great rate going through the dealer...much better than her credit union or local banks considering how poor her credit is. I don't condone dealers for used boats but I never thought I would buy an suv from a dealer and I just did. Sometimes there are deals to be had at dealers. Of course here in MN only at dealers do you pay sales tax on boats...private party sales are exempt from sales tax except for the value of the trailer. As for the depreciation of boats, I look at it as the cost of having fun. Sure I paid more for my boat last year than I would have this year considering the state of the market but the fun my family and I had is worth any amount of depreciation. As I get nearer to 40, I realize life is for living and you only have so much time here. Worst case scenario, you can have just as much fun on an old boat as a newer rig.

 

[boostnm3]

Re: How should I finance a boat?

So you don't own your house or car right?

Financing is a great option for those of us that can responsibiliy use it. It offers somewhat of a "pay as you go" option so you can keep your liquidity tied up in more profitable vehicles. I plan on financing about half of my first boat, just because I want something I'm going to keep and use for a few years.

Personally, Id rather finance the big toys (boats, cars, houses) and pay cash for everything else (vacations, televisions, home stuff etc). I don't want $20k of my cash tied up in a car or boat that could take a while to move, id rather pay a few points in interest for the "privilege" of using someone elses money, if you have good credit its really hard to turn down financing.

i dont own my house, i have a mortgage (only debt i have), but i own all 3 of my cars outright. didnt borrow money to buy them. just something i learned growing up. you can make it easy on yourself or make it hard, you make that decision.

also i have excellent credit enough to get me 4.5 percent fixed on my house,

to me its easy to turn down financing because i dont want payments

oh and i dont want to sound high and mighty, its just something i believe in. i would rather be debt free if possible and not have to worry about making payments if something were to happen

 

[Bilgamesh]

Re: How should I finance a boat?

Alansauce, if you are still listening, in summary:

Quality Family Time = Priceless

Boating = A Fun Luxury

Debt Free = High and Mighty

Saving Up to Buy = Feeling High and Mighty because you are enjoying Priceless Luxury Fun without Debt.

Ah, the clarity is positively blinding at times...

 

[jmarty10]

Re: How should I finance a boat?

Wow what a great thread and one I can relate to. I bought a real piece of boat junk two years ago. Couldnt really freely enjoy it becasue I was worried about breakdowns every time I went out and ultimately dissapointing kids. With that being said, I learned to boat with my first boat. Go it out about 35 times and family had a great time but it broke down twice in two years (not fun). I knew I wanted to keep an 18' foot size but would need a bigger engine. I got tired of the worry so I purchased new boat in December and financed it from the credit union. Put a down payment on it, got a little for the trade and bought a 2008 model in 2009. Beat the dealer up pretty good and I pay $175 per month. I've been out 15 times this year without any headaches. It starts right up. I have no regrets. I have an amortization schedule that shows the balance on my loan. I will put extra principal towards the loan so I can be fairly confident the loan will not be under water. I have no intentions of getting rid of it. I will always know the history of the boat and will not have to worry about the next to breakdown due to lack of maintenenace. I also have the larson 5 to life warranty. headache free as long as i dont beach it at 30 mph! The $175 per month buys me hours of enjoyment on river and with my wife and 3 young kids. there only young once! BTW - my nine year old got up on the wakeboard Sunday morning for the first time! Boating!!!!!

 

[boostnm3]

Re: How should I finance a boat?

well i guess thats 1 difference in people. i can work on my own boat so if something happens, i can fix it. i bought used but made sure i checked the boat out before buying it and testing it. havent had a problem yet. ive seen tons of junk boats out there though. basically people wanting to just throw there problems to someone else. if you dont know much about boats, it is well worth paying a certified mechanic $65 to check it out for you. will save you tons of headaches and breakdowns

 

[krebs883]

Re: How should I finance a boat?

If you can get a loan on a boat, go with a credit union or the bank you are established with. Boating is entertainment and if you can afford it know that there are expenses and some times a used boat ends up costing more than a new one. Based on your ability to obtain a loan or pay cash that is a question you must ask yourself. I have made a boat payment (yes loan) for the past 10 years on 5 different boats. Is it worth it? To me, heck yes. I too have a teenager in the house and it has made the family unit closer. They are your captive audience. For the person who said "if you have to Finance it you shouldn't get it".... that's your opinion. Having cash in hand at this time is a smart thing to keep. So if you can get into a style of boat you want at a price you can afford cash or monthly payment. Do it. I have and haven't looked back. We have two boats. One for the teenager that is paid for. The other is an investment in a hobby that provides stress relief, togetherness and at times headaches. But well worth it if you are secure with your finances and feel you can handle it with what ever the next economic crisis would entail.

The week after a good weekend of boating makes summers worth it and always gives you something to look forward to. Plus the larger boat is considered our second home. It's a nice tax deduction.

 

[BWR1953]

Re: How should I finance a boat?

... For the person who said "if you have to Finance it you shouldn't get it".... that's your opinion...

Dunno if you meant my reply in post #5 or not, but I'll respond anyway.

My reply was a gentle "dig" at some of the elitists on this board who say that if one has to consider fuel, maintenance, storage, insurance or other boating related costs, that such people really don't belong in boating. You can do a search and find that comment a lot.

Apparently, their viewpoint is that if someone isn't exactly like them, that "those people" don't deserve to own a boat and should stay off their water!

They crack me up!! LOL!!

 

[MudSkunk]

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.

housing is a necessity. boating is not. i saved money till i could afford one straight up. i figured out what the payments would be for the boat i wanted then started making payments to a savings account each month. put in more when i could and less when it was harder times. one of the huge problems that folks have is spending outside their means (taking loans) for things they do not really need. housing is a necessity and should be purchased with a loan within your means.

things like sportscars heavy duty offroad vehicles four wheelers snow mobiles jetskis big screen TV etc. all are not necessity and should never be paid for by loans. save money till you have enough to buy it. become your own banker and money lender. there is too much of a mentalityof gotta have it now in this country. i am sure you know plenty of loons that buy hugely expensive cars each year just to have the new model the new car and so on.

i bought my boat brand new paid in cash after saving up for a few years. the money was there for me if i had an emergency and my boat is mine without being threatened by looming payments or repossesion. bought my truck the same way off the lot free and clear.

 

[jkust]

Re: How should I finance a boat?

I have to say I am impressed by how many of you all pay cash for things. It is hard to be a conservative these days. I have been called lots of names over the years for it. What gets me about boating is how much new runabouts cost. When you get past the first level of Bayliners and a few others, $40,000 is like the starting price. Even if you make a good middle class living, that is a lot of money. Whenever I read the new issue of Boating life and they test the small to medium sized bowriders, I am astounded by the prices. You can even get a pontoon close to $100,000.

 

[BWR1953]

Re: How should I finance a boat?

I have to say I am impressed by how many of you all pay cash for things. It is hard to be a conservative these days. I have been called lots of names over the years for it. What gets me about boating is how much new runabouts cost. When you get past the first level of Bayliners and a few others, $40,000 is like the starting price. Even if you make a good middle class living, that is a lot of money. Whenever I read the new issue of Boating life and they test the small to medium sized bowriders, I am astounded by the prices. You can even get a pontoon close to $100,000.

Yep, prices are nuts and depreciation is even worse. Which is why lotsa folks save up and buy a used boat, not a new one.

 

[lowkee]

Re: How should I finance a boat?

I have to say I am impressed by how many of you all pay cash for things. It is hard to be a conservative these days. I have been called lots of names over the years for it. What gets me about boating is how much new runabouts cost. When you get past the first level of Bayliners and a few others, $40,000 is like the starting price. Even if you make a good middle class living, that is a lot of money. Whenever I read the new issue of Boating life and they test the small to medium sized bowriders, I am astounded by the prices. You can even get a pontoon close to $100,000.

On the 'all cash' comment, apparently more of us simply need to step up and back those who take the stand against the tide of 'debt is a good thing'. More than anything, I have noticed the most wise spenders tend to run away when discussions like this happen, just to 'keep the peace'. Well, evil triumphs when good men do nothing. Make sure you step up next time someone is arguing for bailouts, welfare and debt.

For the boat prices, yes, $40K does seem expensive if you buy it on an impulse, but over 3 years of saving, an average $80K household can save up over 3-4 years ($14K/yr is easy) and have a boat which will last them 30 years. Family fun for just over $1K/yr isn't that bad when you get down to it. Granted, they still make $16K Tahoes which look just dandy to me and lower that yearly number to the $500 range.

 

[H8tank]

Re: How should I finance a boat?

On the 'all cash' comment, apparently more of us simply need to step up and back those who take the stand against the tide of 'debt is a good thing'. More than anything, I have noticed the most wise spenders tend to run away when discussions like this happen, just to 'keep the peace'. Well, evil triumphs when good men do nothing. Make sure you step up next time someone is arguing for bailouts, welfare and debt.

I assume you paid cash for your boat?

Are you taking your family to the lake on it tomorrow?

Cause I am, and I did not pay cash. I financed the whole darn thing.

My 52" Toshiba LCD TV? 36 months same as cash baybee!!!!

My 1999 Z71 with 160K miles? Shoot, I financed that thing twice!

 

[skargo]

Re: How should I finance a boat?

I assume you paid cash for your boat?

Are you taking your family to the lake on it tomorrow?

Cause I am, and I did not pay cash. I financed the whole darn thing.

My 52" Toshiba LCD TV? 36 months same as cash baybee!!!!

My 1999 Z71 with 160K miles? Shoot, I financed that thing twice!

Hmmm, I paid cash for my boat, and have been out 16 times this year, how about you. I paid cash for my Cummins powered truck 7 years ago, it's 11 years old but runs awesome.
I paid cash for my new house I built in 06', it's on 4 acres and I made the money by living within my means, if I couldn't afford it, I didn't buy it. We own 3 rentals too, all paid for.

Not bad for a kid who didn't make it through the 10th grade and who had a few brushes with the law.

We own a consignment shop, and I buy my clothes here. I help my wife bargain shop. I don't drink or smoke anymore, so that helps.

No high and mighty here, just proud of what I have accomplished.

Why do the people who finance everything get butthurt whenever this conversation comes up???

 

[H8tank]

Re: How should I finance a boat?

Why do the people who finance everything get butthurt whenever this conversation comes up???

Edit Unnecessary - QC

 

[Bilgamesh]

Re: How should I finance a boat?

There is nothing fun, funny, cool or commendable about debt. The OP asked for advice about whether he should finance. Everybody has an opinion, but I can't honestly believe anyone would recommend debt. If you are in debt, yes, you enjoy your boat, but if you are honest, you hate the payment and the reality that everything you own, you don't own, because the bank does.

 

[skargo]

Re: How should I finance a boat?

Edit: Unnecessary - QC

 

[WTR4FUN]

Re: How should I finance a boat?

I think almost all the advice here has been good, whether it was for financing or paying cash. If I had the means, I would alway's choose to pay cash and stay debt free. I think I was in the same situation as the OP, when I made th e decision to get into boating. To me, it reads that he has already considered the cost of being in debt, compared to the joy of spending time with his TEENAGE kids, and bonding with them. Being teenagers, he does not have a lot of years left, before they go out on their own. I would split the difference and finance a very good deal on a used boat. If you buy it right, you can always sell it, if the experience does not turn out the way you expect it to. Sometimes, time is not always on your side. Go get a good deal, and enjoy spending time with your family. Just my .02

 

[boostnm3]

Re: How should I finance a boat?

its people that finance everything, that end up losing there homes. they probably financed a home larger than they could really afford. but they had to keep up with the jones. finance a big screen tv! come on people, is it a need. you financed your truck twice. how much negative equity do you have in it?

 

[lowkee]

Re: How should I finance a boat?

I suppose a less wordy way of putting the 'debt is cool' mantra is this:

In 2002, per the US Census, more than 17% of Americans over 18 were worth less than nothing.

I'll let that sink in for a while.