Boat Loan Advice

nickyn99

Well-Known "Member"
Apr 11, 2011
74
36
XX
Name
XX
Boat
XX
To the OP. You will get a lot of different opinions on any forum when asking about buying a new or used boat. None are wrong just opinions and here’s mine. I’m 52 and married and we both have money going into our retirement. My first and current ocean boat was bought used and now paid for. Now that I know I love fishing the ocean, my next boat (2484 Raider Voyager) is going to be new which I will be taking a loan out for minus down payment. If I could find a good used one at the right price I would do it but they don’t come up often and when they do they are not much cheaper than buying new. If you can make the payment or pay cash I say do it. Live life now, be happy but plan for your future/retirement also. The older you get the faster life seems to go by. Personally don’t care if boating is a money pit which it kinda is but I’m ok with that. I know boating is not a money maker and anyone who own’s a boat I would think knows that. To the posters that say boating is a bad investment, I don’t agree. You are investing in happiness and memories with family and friends. The ocean is an amazing piece of water to be on and you will see things most people don’t get to see. You can have a ton of money in the bank but if you are physically unable to enjoy it now or when you are retired what’s the point. Ya can’t take it with ya so be happy, responsible and get yourself a boat and rip some lip. That’s my opinion.
 

blowncar

I've posted enough I should edit this section
Sep 8, 2013
658
361
Ocean Shores Washington/Mexico waters
Name
james
Boat
52' Hatteras C Lobos Del Mar
I used sofi. They will loan up to 100k unsecured loan so you have title. My rate was pretty good, no appraisal bs, don't have to carry full coverage insurance if you don't want to.
 
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Shewillbemine

"should of" is NOT a thing
Oct 19, 2012
2,307
2,465
California
Name
Shewillbemine
Boat
Chips N Guac
Sea Dream worked out for me. They're in Costa Mesa.

I don't subscribe to the always buy things in cash idea. I put a decent down payment on my [new] boat and I don't worry about what the last owner(s) messed up or neglected on my vessel. Then, just like my other one, I'll sell it used, taken care of, and at a little bit of a profit to the next guy. Totally worth my money and time saved. Btw, my money in stocks and other assets have totally beaten the low interest rate I pay for the boat.
 
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Willdoggy

Willing Member
Jun 25, 2014
2,121
2,610
Chula Vista
Name
IG = WetWillyBiz
Boat
Purr-Sea-Stance: Boston Whaler Montauk 170
Pay Cash! Don't worry / Be happy.
Check out USAA if you're military or VET. They rock!
 

|HEX|

I've posted enough I should edit this section
Feb 1, 2014
506
218
Oxnard, California
Name
Hector F
Boat
"Blue Dream II" Parker 2320sl
Boat Partnering sucks. I have 2 buddies that each had a boat partnership with other people in the past and both regret it and even one of their wife was forcing him to sell due to her not liking the partner. My opinion, if you do decide to partner and are looking to finance the boat purchase you should each get your own financing and do not cosign for a single loan. You should each get a personal loan of half the cost of the boat that way either of you don't get screwed if one of you decides to stop making the monthly payment. A written contract wouldn't hurt either. Good luck
 

gloxx

I've posted enough I should edit this section
Aug 28, 2012
248
133
WA
Name
Erik
Boat
unnamed
Sea Dream worked out for me. They're in Costa Mesa.

I don't subscribe to the always buy things in cash idea. I put a decent down payment on my [new] boat and I don't worry about what the last owner(s) messed up or neglected on my vessel. Then, just like my other one, I'll sell it used, taken care of, and at a little bit of a profit to the next guy. Totally worth my money and time saved. Btw, my money in stocks and other assets have totally beaten the low interest rate I pay for the boat.
This is the real crux of it. Depends on your interest rate. If you can make more money investing your cash than you pay in the interest rate on the loan, definitely take the loan. The last time I bought a new car, I was offered 1.2% interest rate. I had cash to buy the car, but I took the loan and split the cash between property and investments. That cash averaged 7.8% growth over 5 years.

Credit is a powerful tool if used intelligently. I understand risk aversion if you've had some rough life circumstances but living cash-only and using a stuffed mattress as your bank is just low risk, not financially wise....
 

Big_Tuna_

I've posted enough I should edit this section
Aug 3, 2017
275
129
40
San Diego
Name
David
Boat
Hobie Tandem Island
Credit is good and bad. When the next downturn comes, some will win, others will lose. Most of California is built on credit dominated by the inflated real estate values. Anyone paying cash for a 1.2 million 3 bedroom house? There are some I suppose, but most are not. Those heavily leveraged in real estate will lose, not those with a 25k boat loan. Good luck with boat and have fun!
 

gecsr1

28' Aquasport "Reel Adventure II"
Jul 15, 2005
13,848
3,515
Poway Ca
Name
Gary
Boat
28' Aquasport "Reel Adventure II" / PlainJaneRods
I do agree when I bought my boat I paid cash..
 
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MightyMach

I've posted enough I should edit this section
Aug 17, 2007
775
205
Corona
Name
Jeff
Boat
Phoenix 29 SFX "Given Inn," 17' Duckhungint boat, "Camo-Toe"
I’m very sympathetic to fishing with dad. My dad wanted to fish on mine one more time before he went home to be with our Lord.

But, here’s what they would say about your loan:

Assuming: 10 years at 5%

Payment is $200/month

This COULD have gone into an IRA with mutual funds returning 10%

During the term (10 years) this $200 per month payment will cost you $41,410 in lost earnings. Now, as if that isn’t bad enough, that $41,410 over the next 20 years will cost you $305,897 in lost earnings. This second loss is purely compounding growth.

Your $18,000 boat will cost you $350,000 in lost earnings toward retirement.
 
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MYNomad

Heading South
Dec 12, 2007
3,579
3,499
Pacific Northwest / West Coast Mexico
Name
Rick
Boat
Yes
Btw, my money in stocks and other assets have totally beaten the low interest rate I pay for the boat.
Except you are comparing borrowing at a risk-free rate (ie you are 100% for sure going to pay back the loan or go bankrupt) against a rate that is higher just because it entails risk. Beating a risk-free rate in a good economy often creates a false sense of security.
 
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Shewillbemine

"should of" is NOT a thing
Oct 19, 2012
2,307
2,465
California
Name
Shewillbemine
Boat
Chips N Guac
Except you are comparing borrowing at a risk-free rate (ie you are 100% for sure going to pay back the loan or go bankrupt) against a rate that is higher just because it entails risk. Beating a risk-free rate in a good economy often creates a false sense of security.
LOL I'm not keeping the boat. I use it a few years, pay a little bit a month, then sell.

But if you want to have a detailed conversation about your opinions regarding my finances, send me a direct message instead and we'll have coffee.
 

MYNomad

Heading South
Dec 12, 2007
3,579
3,499
Pacific Northwest / West Coast Mexico
Name
Rick
Boat
Yes
LOL I'm not keeping the boat. I use it a few years, pay a little bit a month, then sell.

But if you want to have a detailed conversation about your opinions regarding my finances, send me a direct message instead and we'll have coffee.
My comment wasn't intended just for you -- that's why it wasn't sent as a PM in the first place. Frankly, your public request that I PM you for coffee sounds a little hypocritical.

In any event, it is a common misconception that since one can easily earn a higher return through investments than the cost of borrowed funds, it is prudent to borrow. You always know when you are getting toward the end of a boom cycle -- everyone thinks they are an investment genius and end up borrowing to invest at the height of the market, only to fall hard later. I remember a time about 15 years ago when my taxi cab driver was giving me stock tips. The fallacy lies in failing to recognize the risk associated with the investments, as compared to the (from the borrower's perspective) the risk associated with the borrowing. The duration of the loan doesn't matter since the whole time it is outstanding it may be imprudent if based on a fundamental lack of risk adjustment.
 

Reel Kahuna

I've posted enough I should edit this section
Mar 24, 2011
857
340
Lake Camanche, CA
Name
Seon
Boat
23.5' Navigator Duckworth F150 Yamaha
Most boat partnership is like a bad marriage...it eventually end up in a divorce.
 

BiggestT

I've posted enough I should edit this section
Sep 8, 2004
12,865
8,166
Fullerton
Name
SM
Boat
Salsipuedes & Czech Mate
You posted asking for "Boat Loan Advise" so here is mine:

You're asking someone to give you money, with interest, for a depreciating asset. Many people do this with cars. And it is the single biggest wealth-killer of the American middle class. For what. So you can kill a few fish? Charter a boat and save way more money, long term.

It only makes sense to take out a loan if A) there is an asteroid coming for Earth and you just want to go down with the ship, or B) you're buying something like a clash-flowing duplex that makes you money every month and has the opportunity to go up in value. Double bonus.

The problem with financing a boat? It looses value and doesn't have rental income.

The moment you take out that loan you'll be "underwater," meaning that you'll owe more than your boat is worth. Not only that, you'll be playing for it every month, setting back your savings.

Maybe keep your current boat to keep you on the water. Sell it when you've saved, then go buy that big honker you dream about.

(And this is coming from a total boat person who would do almost anything to stay on the water. Best of luck, either way. I know thinking about boats like I just outlined is often the last thing anyone wants to think about.)
No truer words written.^^^^