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Thread: Boat Financing

  1. #1
    Member patrickL's Avatar
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    Default Boat Financing

    So I realize this is a bit of a vague question so below are some details of my sitaution. My question is about financing a boat. I have bought several trucks over the last few years and never financed anything longer than 5 years. I was suprised to see how long some of the financing for boats goes so I was curious how long people finance their boats. Is 10 years a common finance term for boats. Also, where do most people get the financing for their boats.

    My situation: I am hoping to buy an ocean going boat here in the next few months. I am looking at getting something in aluminum with a hardtop in the 22-24ft length. It would also be great to get it big enough to sleep a couple folks and possibly a marine head. I have looked at everything from the Hewes Sea Runner, Ocean Pro, Alaskan to the Weldcraft Ocean King, as well as some other similar models. How long would you look to finance a boat such as this and where are the best places to look for the financing.

  2. #2
    Member spoiled one's Avatar
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    Default

    I financed my old 24 AK searunner through CU one and currently have my GC financed with them. They were by far the best thing going at the time of each purchase. If you are a member, you gain points that you can use to "buy down" you interest rates. We did this on our GC and will save thousands over the course of the loan. This is off their website:
    Boats
    Finance up to 85% of the purchase price on the surveyed value of the boat or vessel. Financing up to 240 months available depending on loan amount.


    Spending my kids' inheritance with them, one adventure at a time.

  3. #3
    Member Soundfisher's Avatar
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    Default CU1

    I bought a 2005 Sea Sport Pilothouse diesel last week. After going through Alaska USA's (which I have been with for 26 years) hassels of telling me I had to Document the boat so they could charge me premium mortgage insurance, not calling me back,and not appreciating all of the numerous previous loans that were repaid there,I went to CU1 and had an approval in 20 minutes. The rate was only 5.75%. Substantially lower than AKUSA. After they had the survey, I had the papers signed and the check was ready in about an hour. Then the check was FedExed by them to the seller. I had a great expierence with them as a new customer. I am like you and try to pay things off in short order. But as far as terms go, you can get 15 years or more. (YIKES)

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    Smile I'LL 2nd that - CU1 is the best

    Credit Union 1 will provide the best rates - and on top of that the best service. And if you ask nice they might even give you a cool looking key chain to go with it - subject to availability.

  5. #5
    Member patrickL's Avatar
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    Default

    Wow now that's a concensus if I've ever seen one. I don't think any question on this site has ever gotten a unanimous response. I guess I should look into CU.

    Now for the other question. Am I missing something or is financing a boat for longer term the norm. I would never finance a car for 10 years...what a way to end up way over your head. What about boats. Is this normal to finance for 10 years or more. I have never financed a boat before. The last boat I had I just bought outright. I would be interested to see what you guys that have financed boats before think is a reasonable length of time.

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    Member spoiled one's Avatar
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    Default

    Quote Originally Posted by patrickL View Post
    Now for the other question. Am I missing something or is financing a boat for longer term the norm. I would never finance a car for 10 years...what a way to end up way over your head. What about boats. Is this normal to finance for 10 years or more. I have never financed a boat before. The last boat I had I just bought outright. I would be interested to see what you guys that have financed boats before think is a reasonable length of time.
    The fiscally reponsible thing to do would be to pay cash for it, but most of us are not in that position. I would rather spend my son 's and daughter's inheritance creating memories, anyways. If you set your loan up for ten years, there is no penalty if you pay it off early.
    Spending my kids' inheritance with them, one adventure at a time.

  7. #7
    Member Kay9Cop's Avatar
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    Boats tend to hold their value well, if taken care of. The one I just bought was appraised in 2005 and again this year and it appreciated in value. I think that is one of the reasons why boat loans are typically longer because you are less likely to end up upside down.
    "Beware the man with only one gun; he may know how to use it."

  8. #8
    Member patrickL's Avatar
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    Default

    Both good points. Thanks for the info.

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    Member CaptNemo's Avatar
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    Default Another thing

    to watch out for is that most of the long term loans (10-12 yrs) have a balloon payment attached to the last payment. My final payment on a 2006 TJ w/ a 12 year note was to be 11K. Making triple payments it will be paid for next Christmas without the balloon. I have thought of a thousand reasons (each month) not to make the payment as the next due date is Jan 2014 but I know in the long run it will be worth it. CN

  10. #10
    Member DEH's Avatar
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    Default

    My boat loan is through CU 1 and they get an A+. They are so easy to deal with I found myself thinking there had to be a catch. So far no catch and I just used them for a loan on a new vehicle as well.

    Good luck

    D
    2007 220 OP ET HT
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    Member TWB's Avatar
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    You guys keep teasin me. I would LOVE to see a new inboard shallow water runner in the yard. I think I can convince the ole lady after we get married. =D
    We do not go to the green woods and crystal waters to rough it, we go to smooth it. We get it rough enough at home; in towns and cities; in shops, offices, stores, banks anywhere that we may be placed

  12. #12

    Default Things to keep in mind...

    While some boats do appreciate in value, the vast majority won't. Especially when you consider the engine work and replacement costs.

    Depending on the boat you get, I would think long and hard before financing it more than 7 or 10 years. You want to amortize the debt quickly in case you decide to sell the boat.

    I've seen some banks around here offering 20 year financing on boats, which sounds crazy because they do depreciate, especially if they're not taken care of!

    My advice is that if you can't buy it with cash, finance it over a short period of time, or at least make extra payments when you can.

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    Default

    You can also consider a home equity loan for a fixed apr. The interest is then ded. from your federal income tax.
    Tennessee

  14. #14

    Default

    Also, if your boat has a head, bed, and stove, fresh water, and you stay in it for 14 days out of the year, you can deduct the inerest as a second home.

    IRS Publication 936
    Quote from IRS PUB 936

    "For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities."

    http://www.irs.gov/publications/p936/ar02.html#d0e565

    Search for the word boat.

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    Member breausaw's Avatar
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    With mortgage rates headed toward 4% a refinance with cash out to cover a boat is another option, if you’re in the right situation.
    Jay
    07 C-Dory 25 Cruiser
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    Quote Originally Posted by mhpilot View Post
    Also, if your boat has a head, bed, and stove, fresh water, and you stay in it for 14 days out of the year, you can deduct the inerest as a second home.

    IRS Publication 936
    Quote from IRS PUB 936

    "For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities."

    http://www.irs.gov/publications/p936/ar02.html#d0e565

    Search for the word boat.
    This is true. However if you are already deducting the interest on a second home such as a cabin or RV you can not deduct another "second home".
    Tennessee

  17. #17

    Default

    What if the boat has a plumbed standup head and bed but no stove or water tanks. Could you add a coleman 2 burner type stove hooked up to a LP tank and a H2O drum or container. Would it qualify as a second home? How strict are they on the requirements for tax deductions? Has anyone had any experience with this?

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    Default After Married

    TWB, I know what you mean. I was married on July 25 some years ago, and on August 2nd or 3rd, I called my new wife to meet me at the bank to sign papers on our new baby. She never flinched. A keeper in my book.

  19. #19

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    I'm always amazed when I go to a boat show and see on the price tag how many months they will finance you for. I think they state the number of months instead of the years because if it said how many year it was then more people would walk away.
    I was fortunate to be able to pay cash for my boat, but it was only $18K. Of course in order to be able to pay cash I had to first sell my Toyota truck (paid off) and then take some extra money out of the bank to add to that. And then I had to buy a diesel truck to pull the boat and had to finance the truck. And of course the boat trailer and truck had to have new tires right away. So in a round-about way, I guess maybe I did finance the boat after all
    I can't imagine financing a boat for maybe more than 10 years. I would imagine that aluminum boats would hold their value better than glass if for no other reason than it's harder to damage an aluminum boat and the value of aluminum seems to keep increasing.
    SoundFisher - congrats on the Sea Sport purchase. That boat would be near or at the top of my wish list for boats.

  20. #20
    Member TWB's Avatar
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    Quote Originally Posted by jtm9 View Post
    TWB, I know what you mean. I was married on July 25 some years ago, and on August 2nd or 3rd, I called my new wife to meet me at the bank to sign papers on our new baby. She never flinched. A keeper in my book.
    Not to get off topic but my future will have great outdoor adventures if I seal the deal. The woman said if we get hitched this summer to go ahead and book a 5-7 day guided hunt for the honeymoon. I'm thinkin POW island bear/deer.
    We do not go to the green woods and crystal waters to rough it, we go to smooth it. We get it rough enough at home; in towns and cities; in shops, offices, stores, banks anywhere that we may be placed

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