New Boat

[Aroldo Hernandez]

I want to buy a new boat woth $38,000.00, for how long should I finance this boat?

How long do you finace your new boat? Would fimance it for a long term or short term?

What doe's every one else finance there boats for?

Thanks inn Advance,

Ace4u

 

[Bill McElroy]

Put down as large of a downpayment as you can afford,..and finance the rest for as short -term as you can afford..(The shorter the loan term, the higher the payment)....boats depreciate FAST and you want to get it paid off ASAP! Nothing worse than having a boat loan that you're upside down on,...meaning you still OWE more than it's worth!!

 

[Jim B]

My .02 on this issue. I would finance it for as short a term as possible if you have to finance. Personally i dont like the idea of having a long term loan on something that depreciates in value, especially somethign that looses value as quickly as a boat does. Should you ever need to sell it becauseof hardship you may still be way flipped over if you took out say a 10 year loan.



When i got my new Z7 i did 5 years( and i will pay it off in 3 or less). i would have loved to have paid cash but on a brand new boat that wasnt in the cards. The way i look at it if i cant afford to pay it off in 5 years or less, i cant afford it and shouldnt be buying it.



I know people who go 10, 12 or 15 years on a boat. Personally i think thats crazy.

 

[Scott Hammer TOXIC]

There are 2 reasons to finance a boat long term.



1. You are tight on cash flow.



2. You plan on keeping the boat for a long time.



There is something to be said about financing long and paying it off quick. If you think you might need to get access to $$ and have a large boat payment then you are SOL, but if you financed long and make double payments, you can drop back to the single payment until your situation improves. With that being said, I am not a fan of long term financing. Most people are not disiplined enough to make the double or triple payments and it ends up costing them way too much interest. They also tend to want out of the boat early and get stung when they go to sell.



TOXIC

 

[Brian Ingersoll]

Finance long term if the interest is the same as short term. Make double or triple payments and it will be paid off quickly, but, like Tox said, if you have a hard month, you only have to make the lower payment. No sense putting yourself in a corner if you don't have to.

 

[Jim in VA]

Pass on the new boat. Look for a good used one that has the features you want. Pay with little or (ideally) no loan at all. Boats depreciate faster than cars. Too easy to get stuck owing more than the boat is worth (i.e., upside down in the loan). It might be my cultural heritage, but I view all debt as ultimately bad (necessary in limited cases like houses, but still something to get rid of as quickly as possible - the debt, not the house!).

 

[Berry Lindley]

I subscribe to the same conservative approach as JimC. I've been through a restructuring, (euphemism for terminated) and not having payments is a good thing when there is no income. I don't take on payments for this reason.

 

[Jody Woodruff]

Finance as short as possible and look for a deal on a used boat. One of the guys in my club wanted a Ranger so he patiently shopped for a deal on used boat and found one up North and saved thousands compared to the prices we have down here in Tx. Besides with high gas prices I am sure there are a lot of guys ready to offload their boats.

 

[Aroldo Hernandez]

Thanks everyone for the input on this subject. Looks like I wil be looking into a short term buy. I'm about to finish paying my house in 4-5 month's. I guess I will wait until next year and put a good down payment on a new boat and get a short term deal.



Thank's Again Everyone,

Ace4u

 

[TrepMan]

Ace - Great advice from everyone. When I bought my 2000 Tracker the best/lowest interest rate was for a 10 year loan! The rates for a 3 or 5 year were 2-3% higher! So I put a whole $10k on 10 years, if you can imagine! Paid it off in 18 months as we had most of the cash saved up but as Berry said, I had just started a new job and didn't want the risk of a high payment IF I got fired/layed off the first year.



So get as much cash down as you can, best rates for the loan vs. payments, as long as you are historically conservative and pay extra every month, set a time period for payoff (make the sure the loan has no prepayment penalties...



Years ago a lot of folks would use Home Equity loans for boats and cars, great thing if you have equity and KNOW you won't loose your job. Then they lost thier jobs, couldn't make their boat payments and would loose the house!



Great deal on paying the house off by end of year!!



Trep