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Thread: Financial Pointers on buying a boat

  1. #1

    Default Financial Pointers on buying a boat

    Seems to me this topic is way overlooked, so here are my questions. 1. When you select a New Boat, do you haggle the price, or do you work them to install extra items? 2. If you buy a used boat, the bank wants an appraisal done. Who do you get to do that? does the seller or buyer pay for it, or you work that out?
    Who are the better banks to work with on boat loans in Anchorage? Now here is something I was wondering. If you buy a new boat the bank normally wants 10 percent down. That tells me there is a 10 percent mark up for profit and the Bank isn't going to pay that and thus leave you to pick up the tab. This is my theory and I would like input on this because I am in the market for a boat. thanks for your help.

  2. #2

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    I bought a new boat last year and used Alaska USA. They were real easy to work with. If the boat is new they did not require an apprasil only a sales agrement. They did require 10% down but that is not because the boat was worth less they want you to have a vested interest in it as well. Also all the paper work was done threw the mail as I live in Valdez. It was a very simple process and only took about 3 days for everything.

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    Member patrickL's Avatar
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    CU1 is also a common place to go for boat loans. They are normally one of the cheapest at 6% right now. They are also pretty easy to work with.

    As for the appraisal, I paid for mine when we bought this last boat. Madar Marine I think. He is excellant and not expensive.

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    Member akjeff's Avatar
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    Don't forget, interest rates are also negotiable. If your credit is good (cash is better), everything is negotiable. The sales price, extras, down payment, interest rate etc. I negotiated the interest rate with AK USA on my last boat purchase.

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    Member chico99645's Avatar
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    PM Sent with Particulars but bottom line is if your got good credit, you have to remind them who is doing who the favor of borrowing money.

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    Member bhollis's Avatar
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    Quote Originally Posted by JEFFSTER View Post
    Now here is something I was wondering. If you buy a new boat the bank normally wants 10 percent down. That tells me there is a 10 percent mark up for profit and the Bank isn't going to pay that and thus leave you to pick up the tab. This is my theory and I would like input on this because I am in the market for a boat. thanks for your help.
    Well, certainly there's some profit involved in the purchase price of a new boat. After all, the builder and dealer have to make a living. But the reason the bank wants you to put 10% down is that a new boat loses a big chunk of its value the minute you drive off the lot with it. In other words, once a new boat becomes a used boat (even very slightly used), it depreciates in value pretty signifcantly. The reason is simple--folks won't pay as much for a used boat as a new one. The rate of depreciation is highest in the first few years (average for a power boat is around 10% the first year), and decreases as time goes by. After a few years, a good quality boat in good condition may stop depreciating and hold its value.

    So, if you didn't put 10% down and the bank had to reposses the boat after a few months, there's no way the bank would get its money back.

    By the way, the hefty up front depreciation on a new boat is one of the reasons I've never bought one. Always bought good quality 2-3 year old used boats in very good condition, and let the original owner take the brunt of the depreciation. Of course, buying used has its own set of problems . . .

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    Member chico99645's Avatar
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    Quote Originally Posted by bhollis View Post
    Well, certainly there's some profit involved in the purchase price of a new boat. After all, the builder and dealer have to make a living. But the reason the bank wants you to put 10% down is that a new boat loses a big chunk of its value the minute you drive off the lot with it. In other words, once a new boat becomes a used boat (even very slightly used), it depreciates in value pretty signifcantly. The reason is simple--folks won't pay as much for a used boat as a new one. The rate of depreciation is highest in the first few years (average for a power boat is around 10% the first year), and decreases as time goes by. After a few years, a good quality boat in good condition may stop depreciating and hold its value.

    So, if you didn't put 10% down and the bank had to reposses the boat after a few months, there's no way the bank would get its money back.

    By the way, the hefty up front depreciation on a new boat is one of the reasons I've never bought one. Always bought good quality 2-3 year old used boats in very good condition, and let the original owner take the brunt of the depreciation. Of course, buying used has its own set of problems . . .
    Not in all cases. Got my boat Brand New with out a dime down, but it was at the end of the year and they took a loss.

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    Moderator Daveinthebush's Avatar
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    Default Boat rpice

    Boat price is one thing, accessories are a whole new addition of $$$. GPS, radar, kicker, rod holders, beer holders, anchor, rode, bumpers, gaff, pot puller, mooring fees, .... Bring On Another Thousand (s).

    Vietnam - June 70 - Feb. 72
    Cancer from Agent Orange - Aug. 25th 2012
    Cancer Survivor - Dec. 14th 2012

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    From what I've gathered by reading various boat forums over the years the MSRP of a boat gives the selling dealer 15-25% profit so there is a lot of wiggle room.
    If memory serves me correctly I negotiated something like $1,700 of my Hewes craft when it was purchased about 15 years ago and they were asking $15K.

    The bigger the boat the more room there is. Although I did not know it at the time, when we purchased our Sea Sport AMDS was quitting the line. Even though we ordered the boat for the following year it turned out to be about $10K less than what dealers in the lower 48 were charging, and the prices quoted were all dependent on us picking up the boat in Wa so the playing field was level.

    Sticker price is for people who do not know how to negotiate
    Tennessee

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    Member HuntKodiak's Avatar
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    Also keep in mind interest rates, loan length, down payment varies depending on the cost of the boat, and these terms vary a little from one loaner to another. Decide what's important to you. I found that appraisals are only needed for boats that can't be valued using blue book values. There are a good number of boats out there made by builders who are recognized as custom boat builders. Those are one's that will need an appraisal if the value is high enough. If the bank can build the boat's value using blue book, then that's what they'll use for the value of the boat, and an appraisal shouldn't be needed.

    Also, if you find yourself getting a boat that's higher priced, then your loaner (CU1 in my case) may require a down payment. However, you may avoid the down payment if you can purchase the boat for a price that's the book price minus the down payment amount. Basically, your down payment exists in the boat's value, which is higher than what you're actual paying the previous owner for the boat. Easy way to think about it is if you default, the bank repos the boat and sells it for the balance of your loan PLUS the down payment. They'd make easy money.

    Pretty nice when you can pull that off. I did, and I used that down payment money in my pocket to outfit the boat with electronics, safety gear, downriggers, and other gear. Like Daveinthebush says, those extras add up, and even if you buy used, don't take it for granted that the boat is ready to go. My Kingfisher was used, but it was far from being ready to get u/w.

  11. #11

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    Thanks for the pointers all of you. I am never to proud to listen and learn from others. Thank you.. Jeff

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