Boat Financing
 

I will be financing a boat soon and was wondering what the standard time/term that most people tend to finance their boat loans. I understand you can set it to what you want, but curious what most people do. The longer I finance the the lower the note and the better boat I can get to fit my budget. Interest rates are low so not too worried about that. Any suggestions?

If u buy a new boat you can finance it however long. But I'm not sure about used boat. I financed both mine for 4 years that way I had it paid off and if I wanted to sell and upgrade I didn't owe. It's a good thing too because after I paid it off I had to buy a new motor lol. But I think it's personal preference really. Low note and pay long or high note and get it over with. You can also finance a long time with low comfortable note and double up if you want to pay off early.

If you r going with a new boat I wouldn't finance past the warranty on the motor. If your going with a used I would only go three years that is what I did on mine got it over with quick.

My thoughts exactly. Pay more when you can, but if you get in a bind just pay the regular note.

That is what I did

Yep. But you will have to check with banks/credit union on used boats. I think some don't like to finance used boats long term. I could be wrong though.

I would not go longer than 5-7years on a boat,,, some will finance u 10years

Rule of thumb is to finance the amount or time that you have on your warranty


I have a 5year on my mercury so I financed my boat for 5 years and do not but extended warranty because if your boat is paid for you don't need it. And most insurance will cover and major blow to s motor.

I went thought State Farm Bank for my boat as they had the best rates at the time.

I am debating financing a boat now or piling cash until Feb-March and picking up something then. I am pretty sure I will end up with a frontier 210 or 2104 which can be had right at 30k lightly rigged, 40k rigged out. If I pay cash I can get it bare bones and add the extras that I really need after getting to know the boat.

For sure check with a credit union if you a member and what ever insurance carrier you have for the lowest inrterest rates.

CSE had 1.9% a few months ago so watch for that to come back or if you buy before then refinance it when you find a better rate...... that was a used boat, car or toy note

When I bought mine in 2009, the banks wanted anywhere between 8% to 13%. The dealership rate was over 13%.
Credit Union I belong to gave me a much lower rate.
If you don't belong to a credit union, find one and join. They are worth it when you need a loan. Their rates are always lower than regular bank rates.
I put $50/month into a savings account at the C.U. just to keep an account open for this reason. When the account gets up pretty good, that's what
I use for a down payment or to pay off a loan early. I got a 5 year loan on my boat and paid it off in 3 years with the money in the savings account.

Same for truck note. Ford Motor Credit was cheaper than the banks I use, but when I went to the Credit Union I belong to, they beat Ford.
I guess Ford wanted the business cause they dropped their rate to beat the C.U.
They were going to screw me with a higher rate, till I found a lower one. Then they dropped theirs.

I do what's best for Ray, not what's best for any lending organizations.

I do all my loan needs through the credit union. Only way to go. Although I did recently refinance my vehicle through my insurance company to get a better rate.

My credit union wants 9% for boats! They are usually pretty competative, when I talked to the agent they said they got burnt pretty bad by a bunch of repo boats a few years ago and they haven't had good rates since. Car Refi's are under 3%.

That's not Ford Motor Credit. That's your ford dealer trying to make a penny.

Last thing I'd want is to be upside down on a boat. Especially after warranty is up on motor. Thin if u owed 60% of purchase price 8 yrs from now and boat is only worth 45-50% of that and your motor goes kaput! Plus if u decide later to upgrade etc u will have to come out of pocket Just my 2 cents.
Good luck on your purchase and post pics

if you go over 30k loan most will do a 10 year note. there are 2 diffrent schools of though on this. my school of thought is SAVE SAVE SAVE so you can put a good down payment and lower your term(lenght of note) . i hate paying intrest especially on a RECRATIONAL toy . the boat catches fish not the intrest no point in paying more than you need. i dont consider a boat an investment but i consider making the leap to buying a boat i use the same guidelines as investing ....most say have at least 3 months of living expense saved up, i say have 1 year of living expense saved up prior to major investments/ purchaces in case crap hit the fan . rate on a new boat will be lower than on a used boat but you will make out better if you shop smart and buy a good used boat ( let the other guy take the depreation hit) . best advice i can give is you know what you can handle financially , dont bite off more than you can chew(, have something put up for a rainy day , look into all the costs ( gas, insurance, maintence, ect) ......

I got 5.99 rate for 5 years from State Farm Bank (new boat loan)

They were the best .....

Almost any boat u buy u will be upside down unless you put a lot of cash down....

I owe 2 years left on my boat and I can now make money on it if I sold today

Just saying....
finance it for 10-12 and your upside down 6-8 of it. With min down. Seen to many friends get burned down the line cussing themselves later.
Enough down or out ahead with short finance period is best. Bought mine in '10 and will be paid off in 8 months. Not an expensive purchase but never had to sweat it. Blow a head and it's a zuk 4 stroke on it.

I got a 3.5% rate on a 4 year loan for my Nautic Star thru advancial credit union. I bought it used too. Check them out. They always have good rates.

I have to agree with what has been said by several people get started with a credit union. We have one with my place of employment and they have beat my bank every time. Got my boat 2nd hand for three years at 1.7%. The bank wanted 4.5%. My two new trucks were done for 4 years at that good ole 1.0%. The more time you have with them the better they treat you.

Sound financial advise is pay for it in full the day you bring it home. If one does not have the funds on hand to pay it in full, then one can not afford the item.

I think it's pretty interesting that you're the only one on this thread that doesn't think getting a loan for a boat is a good idea. I wonder why more don't think like that?

Saving up and buying a boat cash without a loan? Common sense. But realisticly I would rather not wait a couple years to have a boat.

If u can get a low interest rate....6% or less then financing is a good option as long as u put 10-20% down.
Go long on the term and pay more when u can. Knock that note down ASAP! Boats don't hold value;except yellowfin;). U don't want to buy a boat and finance 100%.
Give Urself some breathing room when u figure the note.
Add in insurance, gas, cost of owning a boat etc.
For example
You can set aside 600$ for a hobby; fishing.
300-350$ for ur boat note
All the rest will get eaten up by gas in boat & truck, boat insurance & incidentals.
Also U need an emergency fund to cover things that break and aren't covered by warranty or to meet ur insurance deductible.
A boat is fun , but brings a lot of costs that few people include when figuring how much they can afford for a boat. It's not just the boat note; consider all the associated costs.
Hope this helps.

Great point PureBay

Soooo your giving boat buying advice??? Is that kind of like a burger king worker giving advice to a lawyer on which BMW he should buy???

So what happens when you buy a boat under powered and then buy a bigger motor and go 10,000 in the hole and have a boat worth 35k but owes 45k...I know a guy who did that
What would you tell him or what advice ???

Simple mathematics wise one. You lose money.

Yes I know that...just wondering why that person is giving financing advice when they had a 30k boat and owed 50k on it??

I'm speaking from experience.
Lessons learned.

As usual ur statements about me are incorrect.

I learned a lot on my purchase; when I repowered I didn't not add any debt to my loan. Used the money from sale of original engine plus cash to buy new engine.
So I wasn't in the hole after repowering.
I didn't put nearly enough down; and when I sold my boat it was hard to find the right buyer at the right price.
But it was a lesson learned and I'm trying to prevent someone else from making the same mistake.
If that's makes me a bad person ; Owell.

Sound advice purebay.

Keep in mind, your heckler thinks that having paid in equity in a boat considers that making a profit...

Thanks Corey; and yea I know his thought process.... Lol
I just wanted to clear the story and state facts.

It wasn't too long ago I would have took a loan out no matter the cost. Now I'm trying to pay stuff off, hopefully I never have to take out a loan again.

Whatever you do ,DO NOT FINANCE W/ Bank of America.
I listened to what i was told and did not read ALL the fine print.
Financed for a long term w/ low notes figuring on paying an extra 5 -6 notes a year.
No such luck . In the fine print it said that any extra payment went towards intrest on loan So to pay out early i would have to pay full amount of loan for term.
But good thing is when i get ready to sell it someone is going to get a heck of a deal on boat and motor w/ less than 55 hrs.

Scott as you and purebay have stated, 'each of you have learned a lesson about finances' and now each of you are looking at finances in a different way.

Borrowing from a financial institution for 'things' other than a home loan is well stupid. If a person is fortunate enough to have cash on hand to pay for a home, then that person is ahead of most. When a person borrows money, that person is now debted to the loan originator. Every dime a person pay's towards a loan note is a dime that is not saved or invested. Hince no saving for the next 'thing' a person wishes to aquire which leads to another loan note for most. See the pattern and understand the debt and misery that follows. One of the biggest self hurdles we as humans face is personal patience. We as a society see something and want it NOW.

When a person experiences the satisfaction of purchasing 'things' on a paid for basis. The freedom of not oweing some institution every month is gratifying.

T

I will have to disagree with u ,, I have had many loans in my life time with out much debt piled up. I rate my finances A+ as we live off one income and have plenty of luxuries due to planning

#1 all debt is not bad debt
#2 if I was a multi milliare I would still finance stuff like house, vehicle and other small things

Why would you want to say use your cash money when you can use the banks at low rate ?

Take my Truck now....I could of paid cash for it but why when I'm paying a 1.99% rate using the bank and my money is making 15-25% returns in investments ?

I would pay 6% interest to a bank before I would pull cash that's making 15-25% returns?

Also if you have no debt you have no credit ...Credit is a good thing as I have built up over 800 credit score over my life time and I can benefit off cheap rates and equity in products I own?


So I will never use my cash when I can use the bank at low rates when my cash makes more interest than I pay

I actually agree with W.
He states the truth.
Things have changed in the financial world.
Some folks have realized this..... Others still think the opposite of reality.

2ndamend...let's look @ your theory

You have your car burn up tomorrow and you have to buy a new one. You find a used or new but let's say you found a car for 20K

You have 100k cash in investments
Are you going to pay for the vehicle cash 20k or use the banks money at 2%

And let's say your money is making 20%.YTD on returns
You will remove 20k and lose 18% profit off 100k to pay off a vehicle for 20k@2%?

So if you use 20k cash your now at 80k invested so your losing 18%gains on 20K

So your cash only don't look like a smart move in my books

Thats a very good point W

I agree with ya'll both, I am all about having things paid for but I also want to enjoy some of my money now along with putting some up. Like "W" said, I am 31 and everything I have is paid for except my house and I have around 840 credit score and the bank will pay me more interest to let my money sit then I pay on money I finance, I hate notes but why spend my money when I can let them pay me to use theirs.

Ill take the Banks money for 5years at 2% than lose mine @ 20%

All day,,,, Anybody with cash in investments would never pull out a great amount of cash and lose out ..... I can see pulling out 1k -3k to buy something but more than that ... I would use banks money for cheap rate

W I will not engage in what would be a lopp sided discussion regarding your financial situation. Based on some of your other musings a sound fundamental discussion maybe impossible.

Below are some thoughts to ponder along with a few biblical quotes.

Myth: Debt is a tool and should be used to help create prosperity.

Truth: Debt isn't used by wealthy people nearly as much as we are led to believe.

Debt brings on enough risk to offset any advantage that could be gained through leverage of debt. Given time—a lifetime—risk will destroy the perceived returns purported by the myth-sayers.

Sure, buying things on credit at 0% sounds like a good deal, but what happens if someone loses a job or gets sick and can't work? 0% credit usually doesn't stay at 0% forever. If you miss a payment, wait until you see the fees that they will charge you. You're better off paying for it out of pocket so that you don't have the stress of making a payment each month. It's called peace of mind.


You see, seven out of 10 families in America are living from paycheck to paycheck. That means that if they missed one paycheck, bills would literally go unpaid. They may look like they’ve got it all together, but realistically—and statistically—it’s just not the case.

They were building a house of cards that wouldn’t even stand up to a light breeze, let alone a rainy day!


Proverbs 22:7, "The rich rule over the poor, and the borrower is slave of the lender"

Proverbs 22:26–27
Do not be one who shakes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you.

Just curious but if you have $20,000 in an account or investment making you money are you saying you would not borrow the money at 0% and leave your money to grow knowing you could if needed pay the truck off at any time? I am all about being dept free but I am also all about letting my money make me money and using a banks lower interest to finance some things. I have never paid much attention to Ramsy and his talks but a guy at work says Ramsy claims you dept free if you only owe on your home but in my book dept is dept.

In this scenario it looks like you are either taking the hit at one time or over a period of time. You are taking 20k out and paying 20k for a vehicle or paying 20k plus 2% over however many months. When you pay cash for the vehicle instead of paying the bank 20k plus 2% interest you put the money back into your investment account each payday where it gains 20% ytd. If you go the loan route each payday you pay money to the bank that has interest instead of putting it into the account that gains 20% ytd.

Please correct me if I'm wrong in my thinking, because my past has proven that I'm a long way from a financial expert.

Borrow borrow borrow!! Borrow some much that u are so good rich you can't even fill it up with gas!! Yeah baby it looks do good just sittin in the driveway!! Lmao

W, if you are making 20% on your investments every year, then why are you working offshore? You should be balling on Wall Street.

Google Average return on mutual funds

Save ya money for a year and pay cash fir a used boat. Wait till the off season to get a better price. Look in TX or FL. They will have the best prices.