longer term financing

[Boats-A-lots]

Re: longer term financing

This is where we failed. We loved the RV too much and didn't see a floor plan we liked as much. Now, 9yrs later we are upside and kind of bites seeing 1, 2 yr newer RV's on lots, cheaper than we owe on ours.

Bottom line, if you plan on keeping the boat for 3-5 years, go long term. Anything less than that, you run the risk of being upside down on the pay off when you sell it.

 

[jkust]

Re: longer term financing

I'm not sure that anything we say will really matter. I can't stand financing anything or more aptly can't stand owing anybody money. I might want to buy the boat but wouldn't finance it for any term. One reason I don't need to utilize financing for anything...because I never financed stuff.

 

[Slip Away]

Re: longer term financing

This is where we failed. We loved the RV too much and didn't see a floor plan we liked as much. Now, 9yrs later we are upside and kind of bites seeing 1, 2 yr newer RV's on lots, cheaper than we owe on ours.

We just financed a new RV in October, long term. We plan on keeping it for quite some time. The price was too good to pass up, and it should stay ahead of the depreciation curve for the
length of time we own it. Financing is not for everyone, but in 22 years of marriage, we have financed all of our boats, cars, snowmobiles, etc. And have bought them right, and have not ever
been up side down on any of them when it's time to trade in or sell.

By the way, love the avatar pic of your Westie . We have a Westie (our 2nd) also.

 

[lakegeorge]

Re: longer term financing

If changing the term of a loan because the payment difference is $50 and that actually matters if you think you can afford a boat or not, then you probably can't afford a boat.

The loan on my boat is 0% since I don't have a loan on my boat.

The 0% car loans are there to suck new car buyers in that should have bought used. 2 years later when the car is worth 50% of its new value, the 0% loan didn't do you any favors if you just lost 25% average each year does it?

If a person can't afford new then they should buy used. We are very fortunate that we can afford to buy new, and we have all our lives.
Having retired from GM as an Engineer with my corporate discounts it just is foolish for me to buy used.
There is no way you will lose 25% if you have a 0% loan, maybe if you have ever bought new with a 0% loan and kept the cae a few years you could figure that out... until then!

 

[BRICH1260]

Re: longer term financing

If you do find yourself financing a new boat for the 10 years. Please find one within a budget of being able to pay additional each month towards the principle only. It will keep you ahead or equal with depreciation, lessen your interest costs and shorten the term of the loan.

 

[jbetzelb]

Re: longer term financing

It is simple, are you OK with paying the finance charges or not ok with it? Do you fear being upside down on the loan for a few years because you might be between about year 4 and 8.

 

[bruceb58]

Re: longer term financing

Having retired from GM as an Engineer with my corporate discounts it just is foolish for me to buy used.

I get the GM employee discount as well. I used to be able to buy a new truck and sell it a year later and make money. They changed the discount so much that you can make deals with dealers and do better. Better to buy used now.

 

[jkust]

Re: longer term financing

I wonder...how many have uncommitted cash just lying around for a large purchase like a boat? Money that isn't your 12 month/6 month cushion of expenses or similar.

 

[jkust]

Re: longer term financing

Well I figured that you did.

 

[dingbat]

Re: longer term financing

I wonder...how many have uncommitted cash just lying around for a large purchase like a boat? Money that isn't your 12 month/6 month cushion of expenses or similar.

how big of a boat do you want?......lol

 

[agallant80]

Re: longer term financing

Has anyone regretted financing a boat for 10 years or so? After looking for a used boat for a while, I'm considering new. Finding used is possible, but far off and mostly brokered boats that won't take trades. Not looking to sell mine myself, rather trade. Not interested about the paying cash only thing, has been discussed many times before. Can buy new for almost same note, but longer terms. Buying new has it's pros and cons, just curious if anyone has regretted doing this.

Depends on your comfort level. I had a boat when I was married and the only way out of it was to pay a tone of cash and sell it to a dealer or trade it on a new one. I traded it in and put some cash down on a new one.

I ended up celebrating my divorce with a nice new $70k boat at 5% for 15 years. Me and my new wife love it! I pay it down a little extra month. I'm on track to have it paid off in 6.5 more years. It's nice knowing I can make just the payment and no extra if I have a bad month but no way will I pay on it for the entire term.

 

[bruceb58]

Re: longer term financing

$70K boat at 5% cost $100K after 15 years. It's good that you are going to pay it off in 6.5 years. Of course to pay it off in 6.5 years requires a $1000 monthly payment.

That's more than the mortgage payment on my Lake Tahoe House!

 

[john john]

Re: longer term financing

Financing is not the concern. Been doing it for business for 30yrs. Found used boat that was too far away. But dealer offer $28000 for trade in. They had 2010 model for $70000. Local dealer offered $36000 trade for new boat at $90000. That's when he recommend 10 yr deal since it is more than I anticipated to spend. Right deal on used would still be preferred option but I don't see that happening. Another year and spread could be more. Even though I can pay off early, I just think the 10 yr might be a good option. That's why the question was asked about the longer term.

 

[bruceb58]

Re: longer term financing

Financing is not the concern. Been doing it for business for 30yrs. Found used boat that was too far away. But dealer offer $28000 for trade in. They had 2010 model for $70000. Local dealer offered $36000 trade for new boat at $90000. That's when he recommend 10 yr deal since it is more than I anticipated to spend. Right deal on used would still be preferred option but I don't see that happening. Another year and spread could be more. Even though I can pay off early, I just think the 10 yr might be a good option. That's why the question was asked about the longer term.

Why are you messing with trades? Just sell your boat and bargain on the price without the trade? 99% of the time you are always better off selling the boat/car/truck yourself rather than trading it in.

How much equity is there in your boat at fair market value, or better question, what's the principal loan amount on the present boat?

 

[smokeonthewater]

Re: longer term financing

The SIMPLE answer is:



NOBODY here can answer this for you.... You have the full range from "you are stupid to finance anything" to "you are stupid not to finance as long as possible". You also have the full range from "pay off early" to "stretch the payments out to the end to keep your money in high yield investments"


You will have to choose what is best for you and all we can do is argue about it.

 

[john john]

Re: longer term financing

Don't like the hassle of selling. Take the chance of holding too long etc. My boat is very good with no problems, but anything can happen anytime, it is used. Don't want anyone coming back asking to fix something. If put through dealer then you have commission. With no trade the full amount of next boat will be taxed. Tried selling other things before and could never get more than trade in value. Boat is paid for. Don't have to have another one, like I said current boat is good. Just would like different style and couple different options.

 

[agallant80]

Re: longer term financing

At the end of the day you are the only one who knows your financial situation, tolerance for risk, and willingness to take on debt. I have friends who have paid cash for their under 10K boats, I financed my 70'sK boat and there are people like my aunt and uncle who financed their $350,000 boat.

So to answer your question, yes many people do it. Try asking the sales guy the next time you see him how many people pay cash for a new boat, and by that I mean real cash, not cash from a loan they got at their bank.

 

[jkust]

Re: longer term financing

how big of a boat do you want?......lol

No...I just read that 44% of us have less than $5887 of cash. That's shocking to me...I saved 40k in January and still paid 200k for 4th quarter taxes the same month. That schism to me all things considered.

 

[agallant80]

Re: longer term financing

.I saved 40k in January and still paid 200k for 4th quarter taxes the same month. That schism to me all things considered.

If I could save 40k in one month I would be riding around in something a bit newer than an 11 year old boat.

 

[john john]

Re: longer term financing

Yea, and with 10 yr financing should get something real nice.