Boat loan term

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TIMEOUT90

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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...
 
Depends on the price of the boat. Paid cash for all but one and paid it off within 2 years.
 
Cap'n,

Yes, it does depend on price. I was looking at cruisers, aprox 30' and up.
 
last boat show I went to the dealers were talking about 30 year loans...
thats nuts
 
Most loan terms are not available for used boats. I am sure you can find one, but most lenders will not give you a 20 year loan on a used boat.
If you only pay 20% down on a 20 year loan you are most likely upside down and with a depreciable asset unlikely to ever catch up. Imagine a 30 year loan, after a few years the boat is unsellable for the owner who may have to pay more then his original down payment just to satisfy the difference between loan outstanding and actual sales price of the boat achieved.
 
I chose 10 because it was closest. My credit union game me a lower rate for anything over 12 years, so I went 145 months. 20-year-old boat. I'll probably pay it faster than that though.
 
I could never accept the huge losses and inevitable upside down loan predictament anticipated with new boats - due to most owners not keeping boats for very long. Because of this common knowledge, I have always bought pre-owned and have never been upside down with financing. I paid cash for four boats I've owned and financed my last two.

Four years ago, we put 20% down for 15 years on this (now) 18 year-old boat and negotiated the listed price down 30% lower than the appraised value. It's a well maintained, very high quality boat, which has leveled off to minimal depreciation.

Most likely we'll sell before paying off the loan - the balance of which is gradually dropping faster than the boat's market value. Shouldn't have any problems selling - due to the high demand for Nauticats of any age. Currently, I estimate roughly $40k - $45k in equity.

Steve
 
My Daddy said to always pay cash for your vices. Boats qualify as a vice ( addiction ).
 
quote:
Most loan terms are not available for used boats. I am sure you can find one, but most lenders will not give you a 20 year loan on a used boat.
If you only pay 20% down on a 20 year loan you are most likely upside down and with a depreciable asset unlikely to ever catch up. Imagine a 30 year loan, after a few years the boat is unsellable for the owner who may have to pay more then his original down payment just to satisfy the difference between loan outstanding and actual sales price of the boat achieved.

Click to expand...


Huh, seems like our Financial institutions here on the west coast have not heard this yet.
I see these type loans offered all the time on used boats during show times or not.
Some used boats depending on size can cost hundreds of thousand dollars.
 
quote:
Originally posted by Radioactive

My Daddy said to always pay cash for your vices. Boats qualify as a vice ( addiction ).

Click to expand...
Either your Daddy only bought small, inexpensive boats, or he was very wealthy. :)
quote:
Originally posted by navman
Some used boats depending on size can cost hundreds of thousand dollars.
Click to expand...
That, indeed is a fact.

Steve
 
Big Bliss, we have a rather tidy sized loan on our 1980 as well. No problem financing, we checked a number of lenders and they were all good with it.

I think your reasoning seems to apply more to the newer boats. The depreciation on new boats is truly amazing. That's why I don't buy them and opt for used.

bp
 
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.
 
Fortunately my boat is still in car-price-range, so hopefully I can pay it off in five years.

...hopefully.
 
Someone once posted here "If you can't buy it cash, you can't afford it".
When you think about all the costs of owning a boat (marina, repair, gas etc), adding a loan payment to those costs may not be a good idea after all.
My opinion is to stay within the limit of something you can pay in 5 years tops.
 
Nautically Challenged
Can you imagine the boat sales slump we would see then. I agree with you, but most of us do not do this. I don't anyways.
My house comes first, put it on a 15 year loan around 5 years ago.
Then my retirement savings for the future.
Cars next .
Then Boat, if I can afford a big azz boat on payment- I'm there.
 
I have choices on cash or finance but because I can write off the interest on the note I will choose to go bigger than I need and do a 15 or 20 note.

No Matter what the term or buying cash owning a boat is a complete waste of money BUT it’s a great lifestyle.

Happy Boating,

Mark
 
I bought mine last fall, five year note, the seller had to bring his checkbook to the closing. Used boat values do go upside down.
 
It doesn't matter if you are upside down on the boat, if you make up the difference investing your money elsewhere. If you stretch out your loan for 20 years, and then blow the difference on other toys, well that's a different story. Stocks were very depressed for several years and recently (as well as historically) have been a much better investment than putting your money into a boat just to avoid interest.

But this is an argument that goes on and on forever. Different people view it differently, and everyone gets to manage their own money how they see fit.
 
I find it surprising how many folks borrow money to buy toys, but I guess it's the American way. The old argument of investing your boat money and financing the boat is poor financial planning. You should pay cash for your boat from the good investments you've made. If you absolutely must finance one, use a home equity loan, cheaper and you won't have to insure it. But get rid of the debt asap. I could see an absolute steel comes up now and then, I suppose one could justify borrowing to make the deal.

Finance investments, things that MAKE money. Pay cash for toys, cars, boats, planes, etc.
 
I'm so far unable to bring myself to go into significant debt for a toy. Consequently I only buy toys which I can pay for out of savings. I kind of make payments for a few years BEFORE the purchase rather than after.
 
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