longer term financing

[john john]

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.

 

[SigSaurP229]

Re: longer term financing

I have considered it several times, can't bring myself to finance a new boat.

Financing for 10 years even with great credit still doubles what you pay for the boat, I am not a financial advisor nor do I claim to be one, but I refuse to finance toys if I can't pay for them I don't want them.

 

[Bamaman1]

Re: longer term financing

Sig is right about financing a boat, car or anything on extra long terms. The interest charges go up so fast after 48 months that payments can total to a ridiculous amount. It's just like when you go 30 years on a mortgage instead of paying a little higher payment and paying it off in 15 years.

I read of $70K bass boats being bought on 10 or 12 year notes. Unfortunately, the engines don't have that long a life span. And what do you do when you have to replace a Mercury 250 Pro XS after 8 years? You still owe twice what the boat's worth--and another engine's $16K-$17K. That's when you've dug yourself a hole and let the boat be repossessed, or you pay 4-5 years on the boat while looking at it under a tarp in the back yard because you cannot afford to repower it.

Toys are not something to finance longer than 60 months. If you cannot afford a boat on 60 months, you just cannot afford the boat in the first place.

 

[dingbat]

Re: longer term financing

Financing for 10 years even with great credit still doubles what you pay for the boat,

A $25K, 10 year loan @ 5% will cost $6,800 over the course of 120 months. People spend more a month on cell phone service.

 

[Boats-A-lots]

Re: longer term financing

We financed our RV for 15 yrs.. That was 9 yrs ago. We loved the lower payments, but today we owe about $7,000 more than it's worth. It kind of hurts to see the same year or newer RV on lots, selling for less than we owe on ours. And we did get a great deal on it when we bought it. Problem is, about 95% of the payments for the first 10 yrs goes towards the interest.

 

[matt167]

Re: longer term financing

Took me 3 years to convince myself that I needed to finance a vehicle rather than keep repairing what I had or buying another cheap vehicle..

I think I could finance a $10k boat for 36 months if I was in a position that I knew I could afford it, but I'd probably never go farther than that. Figuring the $10k boat should last 10 years+ repair and maint

 

[pckeen]

Re: longer term financing

This is a personal choice - if this is something you know you are going to use week in week out, it might make sense. A better approach may be to save for a year or so, sell your existing boat, then put all the money from that into a downpayment, so that you can finance over a much shorter term. The problem with a 10 year loan is, five years from now, when your boat starts to need repairs, you will still have those monthly payments....

 

[SigSaurP229]

Re: longer term financing

A $25K, 10 year loan @ 5% will cost $6,800 over the course of 120 months. People spend more a month on cell phone service.

Depends on wether its a simple intrest loan like most credit unions or financing on a revolving account like through bass pro or something.

Its just not worth it, I can't stand making a car payment beyond 48 months (and that is REALLY stretching it) Let alone making a boat commitment for 10 years.

 

[Boats-A-lots]

Re: longer term financing

As stated above, we loved the low payment over the last few yrs, and use our RV monthly going to the coast for week ends. The memories are priceless, and we do still love our RV. The down side is, if we wanted to trade it in today for a new one.. we would be upside down, and would have to come up with about $7,000 extra.

I would do it again, it just sucks seeing the same RV as ours, or even newer selling for less than what we still owe on ours.

 

[bruceb58]

Re: longer term financing

As long as you are putting 15% in your retirement, have zero credit card loans, I might consider it...on second thought NO! Actually...that's Hell No!

OP, I noticed you just bought a 24' boat 2 years ago. Why are you buying again? You have equity in the other boat?

$50K loan at 5% interest has a total cost of over $63K over 10 years.

Assuming you are buying a new boat, at the half way point, the interest paid will be $10K and the principal balance will be $28.5K. So after 5 years and $32K worth of payments, there is a good chance that $50K new boat will not be worth the principal after those 5 years even after spending that $32K. So...have to ask yourself, is it worth $6k/year for a boat with no equity after 5 years?

 

[Boats-A-lots]

Re: longer term financing

But in the end... You can't take it with you...

 

[dingbat]

Re: longer term financing

....

 

[southkogs]

Re: longer term financing

Assuming you are buying a new boat, at the half way point, the interest paid will be $10K and the principal balance will be $28.5K. So after 5 years and $32K worth of payments, there is a good chance that $50K new boat will not be worth the principal after those 5 years even after spending that $32K. So...have to ask yourself, is it worth $6k/year for a boat with no equity after 5 years?

^^^^ This.

 

[dingbat]

Re: longer term financing

Depends on wether its a simple intrest loan like most credit unions or financing on a revolving account like through bass pro or something.

If your credit is so bad your buying on revolving credit, you shouldn't be looking at boats, or anything else for that matter.

But in the end... You can't take it with you...

My wife went with me to fill out the paperwork when I bought the Grady. She complained about the cost the entire time. About a half hour into it, the salesman asked her if she has seen a Brinks truck in a funeral procession. She thought for a moment then replied, no....His reply, I rest my case. :laugh:

 

[SigSaurP229]

Re: longer term financing

If your credit is so bad your buying on revolving credit, you shouldn't be looking at boats, or anything else for that matter.


My wife went with me to fill out the paperwork when I bought the Grady. She complained about the cost the entire time. About a half hour into it, the salesman asked her if she has seen a Brinks truck in a funeral procession. She thought for a moment then replied, no....His reply, I rest my case. :laugh:

I fully agree with this statement, I just see the signs on the boats at bass pro and laugh.

 

[bruceb58]

Re: longer term financing

Pretty hard to advise someone who asks this question since we have zero idea about his finances. Maybe the OP has a million dollar net worth but the assets are tied up in real estate and other investments. Assuming he has that and a good stable salary, buying a boat with a 10 year loan may not be that big of a deal. On the other hand at the other end of the spectrum, if one has 4 kids, has little or no equity in a house or rents, hasn't started saving for college for the kids and/or retirement, student loan debt, credit card debt...may not be such a great idea.

 

[worntired]

Re: longer term financing

I'm looking at getting a 10 year loan for used pontoon boat right now. The reason? The interest rate is 4.49 for the 10 compare to 6.49 for anything less than 10. I do however, fully intend on getting it paid off early. That being said, if you aren't financing anything else and can't bring yourself to plop down 20k at one time, why not finance it and pay it off early?

 

[redneck joe]

Re: longer term financing

I've financed two of my boats, 4 and 7 years respectively and paid both off pretty early. Its a personal choice based on your situation but if you do, pay off early don't carry to full term. If the payment is $300/mt - pay $400 or $450 or whatever. In boating dollars $100/mth isn't much.

Kind of like my home loan - I have financed for 30 years but am paying enough extra to be done in 12 or less - BUT if all goes to hell in a hand-basket financially I like to know I can work a couple minimum wage jobs and still cover the payment.

 

[redneck joe]

Re: longer term financing

oh and to the OP - yes please buy the new boat so we can buy used. We couldn't do it without you folks...

 

[Starcraft5834]

Re: longer term financing

Living in the northeast.. I would not even consider ever buying a new boat with a 10 year term,, if you expect to take your wife/family or gf out that narrows the season down to about a two month window.. kind of like buying and installing a swimming pool, (2) months of use... if I lived south?? that's a different ballgame