| T O P I C R E V I E W |
| TIMEOUT90 |
Posted - Jan 21 2007 : 22:45:07
I just returned from the boat show, and many vessels had "show special" pricing, with 20 year loans. Is this typical for a new, or even used boat loan? What is your financing term? Cast your vote... |
| 50 L A T E S T R E P L I E S (Newest First) |
| jmeirhofer |
Posted - Jan 12 2012 : 21:51:41
I didn't miss the point. I didn't take the loan for the interest deduction. I took a boat loan because I wanted a not I could not pay cash for. I could have paid a lot more than the 30% down I did but wanted to have money in the bank for what ifs. Such as the motor I replaced this summer.
Listen, understand some people take more than they can handle but the majority do not. As David pointed out, imagine where we would be if people did not take out loans for things like this. |
| GeeBee |
Posted - Jan 12 2012 : 13:13:51
I think you miss the point here John. Taking out a loan because the interest is deductable is foolish. You are spending a buck to get back 25 cents. There are a lot of tax write offs that have a lot more leverage and provide a stronger asset base if taxes are the issue. Second, taking out a loan of such term and duration that upon signature you are upside down is equally foolish. There are a lot of people that need a little boost here and there and that is what loans are for. However, scaling up your purchase simply because you can afford the payments a is beyond comprehension when you think about it. Equally so is taking out loans of near double digit or beyond duration because the asset will depreciate beyond the amoritzation schedule.
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| KiDa |
Posted - Jan 12 2012 : 10:33:40
Howzabout this. Forgetting how much money one makes, or doesn't. How smart one thinks they are, or aren't. Whether ones boat loan interest is deductable, or not.....
If there were no boat loans, there would be no boating industry. If you think Bush 41 destroyed the boating industry with his 1990 "no new taxes" budget, just take the credit industry out of the equation. |
| jmeirhofer |
Posted - Jan 12 2012 : 10:16:19
Well I do think calling folks that have a boat loan foolish, is a bit foolish, and arrogant. I have a loan for mine. And I have a loan for a house in Iowa that I have never lived in. Of course those are my only loans. No car payments, credit cards or other crap. 30% of my income going to retirement accounts. Foolish me. I should just sell the boat so I don't have that frivolous toy loan. And sell the house too since I don't live there. Pretty moronic blanket statement if you ssk me. |
| CurrentSea |
Posted - Jan 12 2012 : 08:48:47
Well either way, I own my boat and I am proud to say it.
I have a short term goal to get out of all debts by end of this year.
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| GeeBee |
Posted - Jan 12 2012 : 08:44:50
"The compelling reason to have a loan on a boat is to have a bank in your back pocket.
If something happens to the boat and it is totalled, you want someone other than you fighting the insurance company."
Don't work that way sport. You are on the hook until the loss payable endorsement is satisfied. If it is not, you keep making the payments and risk action for your failure to pay. I've seen enough lost airplanes in Mexico to know that one.
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| CurrentSea |
Posted - Jan 12 2012 : 08:39:47
The compelling reason to have a loan on a boat is to have a bank in your back pocket.
If something happens to the boat and it is totalled, you want someone other than you fighting the insurance company.
With that said, though, I found out that if there is a partial payment made, it goes to the bank first and you second.
So they may be fighting for you, but for their money, not yours!
I paid off my boat after deciding I was tired of the 5% loan and getting 2% on my money in the bank!
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| GeeBee |
Posted - Jan 12 2012 : 07:53:54
If you do not own it outright, or it is not neccesary for your existence (i.e. you work on two coasts), yes.
Look, I'm in the market for an airplane right now. I'm looking at two different machines. One is 70K the other 145K. Now the difference to me is not the monthly payment, but what I'm going to withdraw from savings. When you place the differential in what your savings account looks like afterwards, it makes things a little more "real".
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| KiDa |
Posted - Jan 12 2012 : 07:44:04
Greg,
Does that make a second home frivolous? |
| GeeBee |
Posted - Jan 12 2012 : 07:20:34
I like some people here, pay cash for my vices. Certainly a home mortgage is Ok when the home is within reason. However, a boat, even when the interest is deductable is a losing proposition. In fact, the whole mortgage interest deduction is a looser. Why would you give someone a dollar to get .25 back?
The other day I was watching "Margin Call" and the meat of the whole movie, in which an investment bank was sinking under mortgage backed securities was what this guy said. (I have edited the language)
"If you really want to do this with your life you have to believe that you’re necessary. And you are. People want to live like this in their cars and their big f***ing houses that they can’t even pay for? Then you’re necessary. The only reason they all get to continue living like kings is because we’ve got our fingers on the scales in their favor. I take my hand off and the whole world gets really f***ing fair really f***ing quickly and nobody actually wants that. They say they do but they don’t. They want what we have to give them, but they also want to play innocent and pretend they have no idea where it came from. That’s more hypocrisy than I’m willing to swallow. F them. F normal people."
IMHO, if you are doing long term financing of something as frivolous as a boat, you are playing the game he described and when the music stops, things get "fair" really, quick.
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| mariner36 |
Posted - Jan 12 2012 : 06:29:52
quote:
Originally posted by missnmountains
Everyone... Why would you spend 100,000 to save 30,000. Debt is bad no matter which way you look at it. The evil in the world is the Mortage (loan) company. Not the IRS. Why would I pay the Mortgage Company 1,000 per month to save 300 or 400 on taxes. This is completely illogical. Obviously if you do not have the cash to buy, loans help, but do not think the IRS deduction is good. Besides, if a certain political party is elected, you will most likely loose the mortgage deduction along with property taxes and charity.
Haven't heard anyone answer this one.
Holding onto cash while carrying an amortized debt is a suckers bet.
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| rnbenton |
Posted - Jan 11 2012 : 15:53:25
Wow, this thread dates all the way back to 2007. Economically and financially it was a different world back then!
Bob
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| klcunningham |
Posted - Jan 11 2012 : 14:20:31
I wish I had some pinbball machines to sell |
| Beechwood297 |
Posted - Jul 08 2008 : 14:13:24
Paid cash, and really couldn't afford it. But either buy the boat so the kids could experience it as kids or pay off bills and get a boat when the kids were out of the house.
We chose to give our kids the "boating experience" now. I am just glad my collection of pinball machines was worth enough to sell off to pay for the boat. (but I did keep two )
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| terrycoxusa |
Posted - Jul 08 2008 : 11:12:53
If you are thinking about getting a loan, add up all the finance and interest charges to the cost of the boat, that is what you are really paying for the boat. After interest charges, many borrowers are paying at least double what the selling price of the boat is. My decision was to go with a smaller, used boat and pay cash. |
| TIC |
Posted - Jul 05 2008 : 20:35:59
We REALLY wanted a larger cruiser but could only afford to pay CASH for a pocket cruiser so that's what we got..We're not at all disappointed with the boat and not overly jealous of larger cruisers (yet). We are both in our early 50's and if either one of us lost our jobs a boat loan would sink us .. pun intended.. Still, a new pocket cruiser and truck to tow it was north of 100,000 so we'll have to work a few extra years to replace that cash.. Oh well, we really look forward to our outings on the boat and it's a good feeling knowing it's paid for. The rest, relaxation and happiness being on the water gives us will probably add a few years to our lives. |
| seaU |
Posted - Jul 05 2008 : 10:24:56
Most say "The man with the most toys at his death wins"
I say that the man who bounces the check to his funeral home wins!!!! LOL |
| psalzer |
Posted - Jul 05 2008 : 09:04:01
Those who "Wait for their ship to come in" will probably be at the airport when it arrives. Best thing is to buy the boat you can afford. |
| MsChrissyNorthLI |
Posted - Jul 05 2008 : 08:20:01
I'd rather have a loan and a life, than to have to sit on the shore waiting for my "ship" to come in. |
| rduhon |
Posted - Feb 22 2008 : 07:21:26
I had a 7 year loan on my other boat. It was 12 years old and insured when Hurricane Rita damaged it. I took the insurance money and sold the boat "as is", and bought the boat we have now with the money. No loan. |
| Dave K |
Posted - Feb 22 2008 : 06:22:30
quote:
Originally posted by JoeBTB
I'll tell you one thing: with the interest on my boat loan beging a tax deductable 6.25%, and the Dow up 15% this year, I'm sure glad I had my money in the stock market this year instead of paying cash for the boat.
Hey so you're the one who jinxed the market. Just Joshin ya. Do need to be careful about those short term observations  |
| Captain Buddha |
Posted - Feb 21 2008 : 14:33:00
Bottom line: your money, your choice.
I personally would not want to tie *any* debt (other than my original home loan) to my home...only have a few years left on that (YahoooOOO!!!). Reason? A bad circumstance happens - I am not about to lose my house because of something totally unrelated to it!
Run all the numbers, buy your boat right (as in smart, not using emotion, look at the deal, be prepared to walk away) and decide how you wan to do it. I went the loan route on a 6 year old well-maintained cruiser, the initial depreciation hit is over, sure it's still going to depreciate, but at a very low rate compared to new, I bought it "right" (meaning the price, condition of the boat, loan terms, etc.) - wrote the sales tax off on the initial purchase - and every year I write off the interest on the loan - that essentially pays for dockage. |
| Tommy Allen |
Posted - Feb 20 2008 : 21:28:59
I think you can get 10 year financing with little or nothing down on a new 16' Bayliner. |
| Dave K |
Posted - Feb 20 2008 : 06:00:48
No boat loan, no mortgage, no car loans, no debt, 2 college educations set aside, no docking fees (ICW connected pier in back of a modest cottage), 8/10ths retired at 49. Always been a cheapie-entreprenuer-investor type (very much a Po'boy compared to the VC's and fellow hi-tech founders I interacted with)
Got nothing at all against taking out loans (been there done that) and working till ya drop, just enjoying my graduation from the grind way more than chasing after bigger-newer toys and homes right at the moment. Maybe in a year or ten I'll get a bit more restless
I once started a thread on this forum asking people what percentage of their investable assets they would be willing to divert to a boat. I got beat up pretty bad for asking. |
| Capt. Art |
Posted - Feb 18 2008 : 17:54:17
If you have good credit with today's low interest 5 - 6% rates and adding to that the 50% you can deduct on your taxes on the interest it's a no brainer. Money placed in Tax Free Bonds will pay you more back untaxed then you'll pay on the deductable interest. Loans are a better way to go then cash if it makes sense for you to own a boat to begin with? |
| pdecat |
Posted - Feb 18 2008 : 17:18:12
Take a longer term but get the best rate and make sure it has no prepayment limits or complications. Then make extra principal payments as you can. It could be paid off early or if something changes you have theoption to revert to standard terms. That way you are in charge. |
| bcs4x4s |
Posted - Feb 18 2008 : 16:06:14
I just paid cash but then again it's not like i was spending 2 or 300 grand, and couldn't find reasonable rates on a 22 year old boat. on the flipside if i fall off a building (yep i'm a construction worker) my bride doesn't have to worry about the boat note |
| Billylll |
Posted - Dec 26 2007 : 21:22:59
quote:
Originally posted by yzer
quote:
Originally posted by KiDa
The object is to die with absolutely $0.00 in the bank and have the last check bounce.
If you don't have kids, that's great.
Well I have a unique situation both my parents are elderly my mother has dementia/ Alzheimer's disease and my father is in a rehab from pneumonia and congestive heart failure they own a house are on Medicare but came to my house to recover, now I am having to foot numerous bills for them because they have little in the way of liquid cash assets only the house in Florida. Everyone here should consider purchasing elder care insurance, it's no joke. A little off topic but my world has been turned upside down because it takes time to sell a house and exhaust the other assets in the mean time I start the paperwork for Medicaid for my mother. Her care is costing me $250.00 a day ($7k a month) in a home and dads is $120.00 a day after his 21st day which he is on day 45. At this rate I won't be doing much boating this summer and someone will get a great deal on a totally refurbed/restored 40' Mainship Sedan Bridge I worked so hard to restore and improve. I'll say it the kids really can get stuck if you don't plan for your care when you get elderly. I guess I'll say this, Merry Christmas and Happy New Year. I guess I'm glad I don't owe much on the boat. Regards Bill |
| missnmountains |
Posted - Dec 26 2007 : 21:20:57
Everyone... Why would you spend 100,000 to save 30,000. Debt is bad no matter which way you look at it. The evil in the world is the Mortage (loan) company. Not the IRS. Why would I pay the Mortgage Company 1,000 per month to save 300 or 400 on taxes. This is completely illogical. Obviously if you do not have the cash to buy, loans help, but do not think the IRS deduction is good. Besides, if a certain political party is elected, you will most likely loose the mortgage deduction along with property taxes and charity. |
| Kastlercreative |
Posted - Dec 26 2007 : 20:09:02
quote:
Originally posted by Ernesto
Geeeeez! Get off your high horses guys! Some of us want to enjoy life w/o being preached about whether its "ok" or "not" to finance a "toy". You deal with your decision, we deal with ours. I have no issues having financed our boat, since we didn't have $100,000 in cash just lying around (edit: and if we had them, we wouldn't have spent it on a boat LOL). And we're making the payments just fine too, including additional monthly principal to offset depreciation. We also adjust our lifestyle (make some "sacrifices") to support our boating. That's our decision. And yes, we're putting money away for retirement, which MAY or MAY NOT come someday (you never know how much longer you have). So go and enjoy life and stop worrying about everyone else's finances!
Amen! Sure, we could wait for another 15 to 20 years, who knows if I'll/We'll be here, let alone be able, or want to boat. We're having our retirement now, while we can enjoy it with our children... |
| walterv |
Posted - Dec 26 2007 : 19:47:55
quote:
[i]
just my 2 cents, I know I will be roundly abused for this, but borrowing for 20 years to buy a boat? come on. Of course, I'm coming from the perspective of never having even borrowed to buy a car. I hate debt.
Cheers,
Orcbait
Old school thought, and may have been good in the old days, but not today.
Cash is king, and those who easily depart with it are fools, In other words, never use you cash to buy anything unless you have too.
Those of us that are in the higher tax brackets, need these loans and write offs, in my case I borrorowed 175k for a 238k boat includes sales tax in 2004, rb2rb2@gr5tgr5t 3.9% intrest. With my write off that is a 1.9% vig I am paying for a loan, why would I use cash that can earn me 5%?
I also have all assets in my wifes name, and all liabilities in my name, so if I was to die, or my business went south, I could tell all the creditors to pound salt, "Im done".
Now some of you, including my laywer don't agree with me having all assets under my wifes name, and I understand. But I trust my wife, and if push came to shove she can have it all.
When you have what I have had, the hunt was the game , not the kill, totaly sucks to not want a wish list, totaly sucks to not want something you can get tommorow, no more fun.
I don't want this post to sound like I am rich, I am not, but do I buy anything I want, I do.
I built my own company, I came from a poor backround, I need nothing, but to say that borrowing money is wrong, is crazy.....
Just my 2c
Walter |
| TrawlerCrawler |
Posted - Dec 26 2007 : 19:30:18
Lots of interesting perspectives here. I understand the point of view that you don't want to put yourself deep into debt over a depreciating asset. I think that the subprime/easy credit fiaso notwithstanding, we all have our own tolerance for debt and have to live with whatever amount we can handle.
Lets call a spade a spade here. Its the rare owner like the previous poster that actually sees appreciation in a boat. Financially, buying a boat is one of the worst things you can do to yourself. You'd probably be better putting the money under a mattress. However, I think you have to look past the financials to the intangible enjoyment you get in owning a boat. For me, the truth lies somewhere between "leaving enough money on the table for your funeral" and "never finance anythng." After 3 good-sized but older/cheaper boats, I want to move up to something that I'll only be able to afford if I finance part of it. I'm not getting any younger and therefore I've rationalized the debt. As long as I don't blow up my financial future to do it, why the heck not? |
| CW |
Posted - Dec 23 2007 : 08:24:28
When someone ask me about the cost of my boat I simply tell them that it was and is the best investment I ever made. I bought and old boat for a fair price and then spent the same amount to upgrade it. I also bought a nice lot on the bay and built a dock for my boat. The boat is still worth about what I paid for it including upgrades (seven years ago) and the lot has appreciated 10 fold. I did not finance the boat but did do a home equity loan on the lot. My only regret is that I did not buy two lots. The boat is a houseboat so I have a water front vacation home every weekend plus many fond memories. |
| Robski97 |
Posted - Dec 22 2007 : 10:14:06
IF people borrow themselves into bankruptcy its there own fault.... why is anyone else responsible???
Same with the banks ... lower ur lending practices... Get hosed over... go bankrupt!!! ... Why sould anyone get a helping hand when they made there own bed?? There is no system in place to help the little guy that runs his biussiness into the ground so why are the rules different for the big boys? All jobs are just asa important. But to bail them out... hell no..... PEople that got loans that they knew they couldnt afford but did it any .... see yea!!!! what is there for the person that said I cant afford this and walked away ??? U dont reward stupid people....
Rob |
| MikeeH |
Posted - Dec 22 2007 : 08:34:26
Jeesh... why resurrect this 1 year old topic??? |
| Capt. Art |
Posted - Dec 22 2007 : 08:29:02
Orcbait, our gov't is upside down on so many financial issues... As an example,
The worst thing to do is have the money in a child's name since it will be demanded by school before he is eligible for collage assistance loans or grants. The correct procedure (in the old days) was to encourage parents & children to open savings accounts to show kids to save as a habbit every week. Now it's upside down? Loan interest is tax deductable why? Do you get a deduction by paying cash? Mostly no. If you have a mortgage you can deduct interest & at the same time have non taxable bonds give you tax free income? Why tax savings at all? This money should be tax free just tax consumption. Most loans if deductable are better not to pay off? This isn't upside down? |
| psalzer |
Posted - Dec 22 2007 : 06:35:51
Boat (S) are paid for .... house is paid for ... all automobiles but 1 are paid for ... retired at 60 ... with no debt I do not need a lot of retirement money. If you are comfortable carrying a huge bunch of payments for boats, cars, huge houses .. be my guest. |
| GeeBee |
Posted - Dec 22 2007 : 01:29:16
I'm with you on Orcbait. |
| Orcbait |
Posted - Dec 21 2007 : 23:19:02
now if you were the US gov't, and you were looking at the fact that consumers overspend rampantly with cheap money and create unsustainable debt levels that imperil the overall economy at this point, you might ask yourself whether, once the current crisis passes, it really makes sense to encourage this kind of behaviour or whether you should remove that tax deductibility and encourage people not to spend money that they don't have, on wildly depreciating assets...
just my 2 cents, I know I will be roundly abused for this, but borrowing for 20 years to buy a boat? come on. Of course, I'm coming from the perspective of never having even borrowed to buy a car. I hate debt.
Cheers,
Orcbait |
| GeeBee |
Posted - Dec 21 2007 : 22:46:45
Captain Art, that will eventually be disallowed under the "hobby loss" provisions. They closed that one a long time ago.
I find it interesting that people are telling us it is none of anybody's business about how boats are financed. I wonder if they feel the same about houses...after Dubai just bought 7% of CitiBank, the Chinese just took 5 billion from the Chinese, the EC and FED are pumping money into wobbly banks. People are now complaining THEIR borrowing costs are going up because of sub prime mortgage lending, yet we are not supposed to comment on boat lending? Sub prime...it is not just houses. Just ask Ford Motor Credit. Maybe if your neighbors house is on fire, speaking up just might be the right thing to do. |
| sugilbert |
Posted - Dec 20 2007 : 21:59:30
[/quote]
If you don't have kids, that's great.
[/quote]
HA! Just leave enough to bury yourself; you wouldn't want to be a burden. |
| yzer |
Posted - Dec 20 2007 : 20:56:16
quote:
Originally posted by KiDa
The object is to die with absolutely $0.00 in the bank and have the last check bounce.
If you don't have kids, that's great. |
| KiDa |
Posted - Dec 20 2007 : 20:27:53
The object is to die with absolutely $0.00 in the bank and have the last check bounce. |
| Capt. Art |
Posted - Dec 20 2007 : 20:17:23
quote:
Originally posted by sugilbert
quote:
Originally posted by Capt. Art
If you're close to 60 get a 30 year loan & make sure you check out before it's paid. Better yet, get a 30 year balloon payment & take all the deprecation now. Better yet, form a company to be a dealer/broker by/sell & charter boats. As a dealer no tax, deduct all expenses as a business cost. Take out clients in the hope of getting new charter business. If all goes badly (you hope) you lost a ton on a bad business. What's better or more profitable then abig loss at the end of the year? I guess you'll hope to do better or maybe trade in on a bigger boat? Another bad business decision but keep trying...
"Go directly to Jail; Do not pass Go"
Of course, but first collect your $200.00 |
| yzer |
Posted - Dec 20 2007 : 20:04:05
I carry as little debt as possible. House is paid for and new cars get bought through a credit union paid off ASAP or by cash. I bought and refurbished the boat for cash, but since it was purchased at scrap value that's a different kind of deal. |
| sugilbert |
Posted - Dec 20 2007 : 19:16:43
quote:
Originally posted by Capt. Art
If you're close to 60 get a 30 year loan & make sure you check out before it's paid. Better yet, get a 30 year balloon payment & take all the deprecation now. Better yet, form a company to be a dealer/broker by/sell & charter boats. As a dealer no tax, deduct all expenses as a business cost. Take out clients in the hope of getting new charter business. If all goes badly (you hope) you lost a ton on a bad business. What's better or more profitable then abig loss at the end of the year? I guess you'll hope to do better or maybe trade in on a bigger boat? Another bad business decision but keep trying...
"Go directly to Jail; Do not pass Go" |
| Capt. Art |
Posted - Dec 20 2007 : 18:58:32
If you're close to 60 get a 30 year loan & make sure you check out before it's paid. Better yet, get a 30 year balloon payment & take all the deprecation now. Better yet, form a company to be a dealer/broker by/sell & charter boats. As a dealer no tax, deduct all expenses as a business cost. Take out clients in the hope of getting new charter business. If all goes badly (you hope) you lost a ton on a bad business. What's better or more profitable then abig loss at the end of the year? I guess you'll hope to do better or maybe trade in on a bigger boat? Another bad business decision but keep trying... |
| Charlie |
Posted - Dec 20 2007 : 17:05:32
PJS!!! 18% return?????? Annually?
Wow, send me some tips. |
| rommer |
Posted - Dec 20 2007 : 16:50:17
Spam alert!
|
| ReelyNauti |
Posted - Jan 24 2007 : 12:12:46
Very well Said Ernesto! |
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