Purchasing a used boat from a dealer % rate

[AKRISONER]

Hey Guys,

As i approach 30 years old, ive been considering the fact that for the amount that fish, it wouldnt be too far fetched of an idea for me to finally go out on a limb and purchase a starter boat for myself to upgrade from my tinner.

Basically my idea would be to get a used bass boat/v haul with livewells, a starting battery etc etc. Of course I would love to simply go out and purchase a boat private sale, but I dont really have 15k sitting around. A bank loan would be an option pending how high interest rates are from a boat dealer? Aside from my mortgage I am finance/debt free. The idea of a monthly payment for a boat is starting to seem like a reasonable idea.

My question relates to financing a used/new boat. You see a ton of ads for cars and what their purchase finance rates are, but ive been trying to research what financing on a boat looks like and the lack of information is astonishing. 

My question for you folks is what is the standard purchase finance rate for a new/used boat, what rate was available when you bought your boat? I checked out Nitro's finance calculator, but it applied a base finance rate of 15%...surely that cant be accurate, can it? that seems insane.

Any info that you guys can provide would be awesome.

 

Thanks,

[BillM]

You'll probably be better off with a HELOC and purchasing the boat in cash.   You won't find a lower rate I'd bet.

[Lape0019]

Akrisoner,

I just went through this myself. Best bet is to go talk to a dealer that has a boat you are looking at and see what they can offer you. The amount varies from marina to marina but your credit score plays a large factor as well (obvious... I know).

I was quoted anywhere between 3.98 to 9%. This was even before anyone looked at my credit score. It was based on market rates, the type of people that typically walk through their doors and of course, the boat I was looking at (new vs used).

If you want to discuss this more, feel free to PM me.

 

[Musky Plug]

I am in the same boat as you, so to speak when it comes to looking for a new boat. I'm pretty positive that the rates are higher compared to buying a vehicle. I was at the boat show last weekend and was in both the Lund and Alumacraft booths, and looking a couple different boats. For that we were looking at the monthly payments were much higher then I pay for my new truck, which blew my mind. So I have decided to go the used route for now. If you are considering new, shop around at different marinas and find one that will give you the best deal for what you want. 

 

[grimsbylander]

If you are currently saving and investing 10% of your gross income without fail and you still have extra money to cover a boat payment plus the extras(increased insurance, etc) then go for it. If not, consider this...that $15k boat will cost you about $19k at 8% over the term of the loan. If you start putting the $250 month away now, in 5 years at 6% you'll have $17.5K cash. My opinion? Don't borrow money for toys unless everything else, including your mortgage, is paid for and it's above and beyond a savings schedule. 

[AKRISONER]

3 hours ago, Lape0019 said:

Akrisoner,

I just went through this myself. Best bet is to go talk to a dealer that has a boat you are looking at and see what they can offer you. The amount varies from marina to marina but your credit score plays a large factor as well (obvious... I know).

I was quoted anywhere between 3.98 to 9%. This was even before anyone looked at my credit score. It was based on market rates, the type of people that typically walk through their doors and of course, the boat I was looking at (new vs used).

If you want to discuss this more, feel free to PM me.

 

3% seems a lot better than 15...but holy cow the difference between 3 and 9 is insane?

2 hours ago, Musky Plug said:

I am in the same boat as you, so to speak when it comes to looking for a new boat. I'm pretty positive that the rates are higher compared to buying a vehicle. I was at the boat show last weekend and was in both the Lund and Alumacraft booths, and looking a couple different boats. For that we were looking at the monthly payments were much higher then I pay for my new truck, which blew my mind. So I have decided to go the used route for now. If you are considering new, shop around at different marinas and find one that will give you the best deal for what you want. 

 

I cant even get close to even considering a lund or alumacraft...seems like only a 60+ year old executive can afford those things these days...insane how much they are asking for them...even crazier is that they somehow cost 50% less about 15 years ago.

2 hours ago, grimsbylander said:

If you are currently saving and investing 10% of your gross income without fail and you still have extra money to cover a boat payment plus the extras(increased insurance, etc) then go for it. If not, consider this...that $15k boat will cost you about $19k at 8% over the term of the loan. If you start putting the $250 month away now, in 5 years at 6% you'll have $17.5K cash. My opinion? Don't borrow money for toys unless everything else, including your mortgage, is paid for and it's above and beyond a savings schedule. 

Aside from my mortgage payment Im close...hence why im starting to look...and thats the one thing that kinda bothers me is that Im not a huge believer of financing toys...but in this day and age of any boat basically costing at least 20k, how can one expect to ever buy one unless you make 500k a year+

I mean in all honesty, who is mortgage free at 30 years old? Is the expectation not to have a boat until you dont have a mortgage...thats a tough pill to swallow!

3 hours ago, BillM said:

You'll probably be better off with a HELOC and purchasing the boat in cash.   You won't find a lower rate I'd bet.

I havent even looked at the potential of getting a HELOC loan...how do they place a value on the price of your home anyways? i.e. my home is going to cost about 50% less its in orangeville for example. I live in the city of Toronto so everything is ridiculously inflated.

 

 

Edited January 26, 2018 by AKRISONER

[Old Ironmaker]

^^^^^^^^This. Otherwise a home equity line of credit is your best rate, new boat or used.

[gordy28]

19 minutes ago, AKRISONER said:

I havent even looked at the potential of getting a HELOC loan...how do they place a value on the price of your home anyways? i.e. my home is going to cost about 50% less its in orangeville for example. I live in the city of Toronto so everything is ridiculously inflated.

 

If you got through your bank typically they will charge you between $500 and $900 for an appraisal that determines your home value

Many banks will have an offer in place whereby if you take $X loan they will waive the appraisal cost

To get a sense of rates in your area - use ratehub.ca or other comparison tools 

I have found that having a sense of the market before going to your own bank is the best way to negotiate  - have a sense of whats out there

Good luck 

Gordy

[BillM]

24 minutes ago, AKRISONER said:

I havent even looked at the potential of getting a HELOC loan...how do they place a value on the price of your home anyways? i.e. my home is going to cost about 50% less its in orangeville for example. I live in the city of Toronto so everything is ridiculously inflated.

 

 

The bank will do an assessment of the house (Usually a driveby) when processing your HELOC.     My appraisal and legal fees were $400 with TD which were waived if I withdrew the entire amount for at least 3 months.  If you're only looking at 15-20k, then that's an easy choice (You're interested over those months will never add up to that much)

Do not let a boat dealer stick you with a high finance rate, they're such a rip off. 

Edited January 26, 2018 by BillM

[boombap]

Went through the same thing a couple of years ago.. wanted a new boat but the prices are just insane. 

I went with a used boat at 7%.. got a small payment and yeah I'm paying interest on it but it's still about 1/4 of what I would have spent renting a boat 3x a month. You got a mortgage though.. so do yourself the favor and put that boat under your mortgage.. why the hell not? A $15k-$20k boat will barely put a dent in your mortgage payment. That's just me.. life is short man.

Edited January 26, 2018 by boombap

[ch312]

You own a house, put that equity to work for you. You can get a HELOC up to 80% of your homes current value at low rates. It basically turns your house into a big fat credit card and you only need to pay the interest each month. For a $20,000 boat you'd likely be looking at minimum payments of $50-60 a month.

Doing it this way you have the flexibility of paying whatever you want per month as long as it's above the minimum. As you pay down the debt your available credit goes back up like a credit card. Lose your job? Oh well, just make the minimum payments for a couple months til you're back on your feet. Extra cash? Pay off the HELOC with no penalty. It's a no stress, low interest loan that's great for people who can manage money.

If you have a very good credit score be sure to haggle and grind the bank until you get what you want.

 

[dave524]

8 hours ago, ch312 said:

You own a house, put that equity to work for you. You can get a HELOC up to 80% of your homes current value at low rates. It basically turns your house into a big fat credit card and you only need to pay the interest each month. For a $20,000 boat you'd likely be looking at minimum payments of $50-60 a month.

 

  I was single with a good paying steel mill job and I didn't buy a fancy boat till I was 32 and had  cash,  do what you want but  I don't see this as a good idea but then there is a 40 years age difference. 

[ch312]

5 hours ago, dave524 said:

  I was single with a good paying steel mill job and I didn't buy a fancy boat till I was 32 and had  cash,  do what you want but  I don't see this as a good idea but then there is a 40 years age difference. 

Times have changed. If everyone waited until they had enough cash saved up to buy toys, not many people would have toys as living has become so expensive. In the OP's case, $15k at 4% over 4 years = $340/month with $1250 in interest over those 4 years. That's only $300 and change extra per year to have a boat now instead of 4 years down the road.

The OP's only choice is to use credit and the HELOC is likely his best option. It's silly to miss out on the amount of fun a boat provides and limit yourself to shore or friends boats just to save a few peanuts.

[Tom S]

3 minutes ago, ch312 said:

Times have changed. If everyone waited until they had enough cash saved up to buy toys, not many people would have toys as living has become so expensive.

They sure have. And for the sake of people with attitudes like yours I hope the interest rate stays down, otherwise there is going to be a whole lot of trouble. Nothing wrong with carrying some debt, pretty much everyone needs to these days. But there are way to many people living beyond their means who could be in for a heap of trouble.

Just make sure that you're covered in the event of a bad situation (car repairs, house repairs, loss of job, sickness) before you start borrowing towards some big boy toys. 

[BillM]

Just now, Tom S said:

They sure have. And for the sake of people with attitudes like yours I hope the interest rate stays down, otherwise there is going to be a whole lot of trouble. Nothing wrong with carrying some debt, pretty much everyone needs to these days. But there are way to many people living beyond their means who could be in for a heap of trouble.

Just make sure that you're covered in the event of a bad situation (car repairs, house repairs, loss of job, sickness) before you start borrowing towards some big boy toys. 

Absolutely, but if you're going to buy one anyhow, there's no reason to pay the high finance rate he'll be offered through the dealer.    Use your equity, get a low rate, enjoy the boat.

[captpierre]

Did anybody mention that HELOC can be unsecured or secured? The rates are much better to have one secured by your  home. But to get one will cost you an appraisal. Might be $4-600. If you have other business with the same bank like RRSP, credit cards and checking account you are a valued customer and can negotiate fees and interest rates. Provided you have been wise with your debt and made regular payments.   Just know the banks are nervous about the ridiculous real estate prices if you have a big mortgage. Say over 70% of the property value. If you can’t pay they get your house and have to sell it. Maybe after a housing correction. and take a bath.   Buy a quality used boat, take a test drive and have a tech look at the engine. If it hits  the fan you can always sell it. A used good boat won’t deprecated much if you look after it.  Don’t forget the cost of boat ownership  Fuel, maintenance, insurance, tow vehicle, storage and foot itis.  Be patient  watch the market and pull the trigger when the right boat comes up.  Hard to do  

Just sayin. 

 

[LostAnotherOne]

Your wise to post this topic on this board.  I did it a few years ago before purchasing my first boat.  Most guys on here are older then us so there knowledge can benefit you greatly.  Good luck with your purchase. 

[Sinker]

You only live once. Buy the boat. You could be dead tomorrow. May as well enjoy as much as you can while your here. I bust my butt at work so I can enjoy my life. I spend my money on things that make my life more fun. I have never regretted buying any of my toys. Never. 

S. 

[ch312]

22 hours ago, Tom S said:

They sure have. And for the sake of people with attitudes like yours I hope the interest rate stays down, otherwise there is going to be a whole lot of trouble. Nothing wrong with carrying some debt, pretty much everyone needs to these days. But there are way to many people living beyond their means who could be in for a heap of trouble.

Just make sure that you're covered in the event of a bad situation (car repairs, house repairs, loss of job, sickness) before you start borrowing towards some big boy toys. 

 

Attitude like mine? Heh...if you only knew who you were talking too....

You guys are talking like the OP is putting his life on the line to buy a million dollar boat that he can never sell if times are tough and it's absolutely ridiculous. If times are tough he has the option of making interest payments only or selling the boat.

 

2 hours ago, Sinker said:

You only live once. Buy the boat. You could be dead tomorrow. May as well enjoy as much as you can while your here. I bust my butt at work so I can enjoy my life. I spend my money on things that make my life more fun. I have never regretted buying any of my toys. Never. 

S. 

 

*DING*DING*DING* We have a winner!

 

[Canuck]

You are right to have a rule of not borrowing for toys.  But if you have enough equity in your home, you don't outspend what you can afford, and get a decent rate, then go for it.  Also, a home equity line of credit is good to have as a backup if you ever really need to come up with cash in an emergency.  Most of them do not have a stand-by charge, so you should get a limit that is higher than you need (but don't use it all). 

No matter what, pay the boat loan off as quickly as you can.  Stand by your rule of not paying for toys on credit by getting out of the credit ASAP.

If you stay out of high interest debt, and are patient, the boat you will own when you are 40 will be a lot nicer than the one you will be able to afford at 40 if you rack up a lot of "toy" debt now.  (unless you have a career that ensures you will be making a lot more money in 10 years)

No disrespect to those that say "you only live once", but a balanced approach will serve you better in the long run IMO.

Edited January 28, 2018 by Canuck

[boombap]

Damn.. a lot of people giving this guy a hard time for wanting to finance $15k

Bet some of them will spend thousands on booze and smokes every year.

Buy the boat dude.. who cares!

 

[grimsbylander]

3 minutes ago, boombap said:

Damn.. a lot of people giving this guy a hard time for wanting to finance $15k

Bet some of them will spend thousands on booze and smokes every year.

Buy the boat dude.. who cares!

 

 I don't see where anyone is giving him a hard time. What I see is people offering up financial advice based on experience. An alternative way of thinking only gives him more options.

Oh, and in my case, you'd lose your bet, badly. 

Bloomberg's Financial tip of the week: Don't take financial advice from a guy that says things like " Buy the boat dude... who cares!" lmao

 

[Canuck]

19 minutes ago, boombap said:

Damn.. a lot of people giving this guy a hard time for wanting to finance $15k

Bet some of them will spend thousands on booze and smokes every year.

Buy the boat dude.. who cares!

 

You must have a lot of money!  (kidding).

I think people should take financial advice from the most financially successful people you know.  (just make sure you know if they have more debt than assets)

[buick14]

25 minutes ago, grimsbylander said:

 I don't see where anyone is giving him a hard time. What I see is people offering up financial advice based on experience. An alternative way of thinking only gives him more options.

Oh, and in my case, you'd lose your bet, badly. 

Bloomberg's Financial tip of the week: Don't take financial advice from a guy that says things like " Buy the boat dude... who cares!" lmao

 

Hahahah

[AKRISONER]

holy heck, wasnt around for the weekend and this thread took off...

to give you guys way too much info about my life lol just to show you my situation and give you a better profile of myself.

My mortgage is for 60% of the value of my home, my home was built last year...anything breaks, thats the responsibility of the condo corp...one thing i should be wary of is increased condo fees. (worth noting)

I own a truck with 40,000click on it that is fully paid off, however it is a dodge...which has had to go into the shop for warranty work 3 times now lol so good heads up on this one.

5% of my income goes to retirement, which my company matches as our retirement savings plan.

dont smoke, dont smoke the herb either, barely drink aside from a very casual beer.

No credit card debt or any other debt/payments owed.

Would be looking for a starter boat, definitely not trying to shop for anything probably over 17 feet, but would want my money spent on getting a powerplant that can get 3 guys around easily...so probably over 100hp so that jacks up the price a bit.

I guess one way to protect myself from any major hit is to ensure that i get a good deal buying used...that way if something really did hit the fan, im not taking a major hit on the used vs new depreciation...i.e. you can go buy a 30k boat brand new...something happens and you have to sell a boat with 3hours on it for 20k...or you buy a used boat with 30 hours on it, for 20k, and then sell it for 18k with 50 hours on it.

 

Anyone here have experience buying boats from the states? What are the rules about that? I know that right of the top, that buying a used bass boat from the states is going to get me wayyyy more bang for my buck than up here...or at least thats what ive seen shopping around online and heard from some members here...what about the taxes/will the bank still give you that loan for whatever you want even if you are purchasing something from the USA?