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The Basics of boat finance

After you set your heart on the dreamboat, you wish to own, you need to think about financing options that will help you procure the boat. Boats are expensive and financing is an option many consider owner financed boat.

Purchasing a boat

Before you purchase a boat, you need to decide whether you would like a brand new one or one that is new to you (used).

New boats: New boats will have warranties for the engine and hull but will have little or no equipment. It also has a steep initial depreciation.

Used boats: Used boats may offer better value and will be already equipped but will require higher maintenance and detail survey of its condition, age, owners etc.

You can purchase a boat from:

Boat shows: You could find great deals at boat shows. Visit a boat show and find a boat or two that would fit your needs. Note down its price. Make an offer on the boat at the end of the show. Donít hesitate to bargain.

Buying from a dealer: You need to enquire around about the dealer. Check the boat thoroughly. If it is a used boat, you can hire a surveyor to do the job for you. Donít think of it as an unnecessary cost, it may save you hundreds of bucks. Ask for staggering discounts. If he is a registered dealer, he may even help you in the registration process.

Boat brokers: Brokers generally only assist on buying boats 27 feet and larger. A good broker will assist you in everything from determining what type of boat you should get, to arranging financing and negotiating a contract. Only thing they would not handle is the survey.

Buying at the end of the boating season: This will help you get boats at a lower price.

Buying a boat? Ask yourself these questions!

» Will I use it for sailing, fishing or living aboard?

» Should I get a new one or a used one?

» How much can I pay from my pocket?

» What should its make be?

» What should be its model and size?

» What features should I add?

» What features do you require?

» Where will I keep it?

Now, for financing your boat!

Financing your boat or house boat finance can have a whole lot of benefits, such as:

» Financing allows you to buy a bigger boat than you may have considered feasible

» Loans are easily available

» The process of buying a boat can also be speeded up

» Receiving loans from people who are proficient in the marine industry will help you to get their expertise and help in application, titling, documentation, insurance etc.

» Your boat can qualify, as a second home if it has sleeping space, a bathroom, and a kitchen, this will help you claim your interest on your boat loan when you file your Federal income tax

» A credit or refund may be allowed for the excise tax on gasoline used in a boat engaged in commercial fishing

» Financing your boat could cost less than outright purchase if you choose to allocate that money for sensible investment in stocks or bonds, and take advantage of tax benefits

Owning a boat has its own shortcomings, which include:

» It's expensive!

» High maintenance

» Dockage fees

» If you opt for lower down payment on your boat finance, it will ultimately result in higher boat finance charges

» You must insure the boat (more money)

Boat Loan Sources

You can generally get loans from the following sources:

National Marine Bankers Association (NMBA): The NMBA is an association that provides direct boat finance and refinancing to consumers to purchase a boat. It also offers financing through dealer networks.

The Bank: Banks - local, regional and national offer boat loans to their customers. You can check with your own bank too.

The Credit Union: If you are affiliated to a credit union that deals with boat loans, you can contact them. They usually have reasonable rates for their members.

Remote lenders: Lenders who carry out all their transactions by e-mail, phones, post, and never meet you also loan you a percentage of the boat's selling price.

Financial organizations: Financial organizations that are experts in the marine lending field also extend loans by using boat finance calculators. You can contact them for rates and terms. Some of them even provide mechanical warranties and titling or documentation services as well.

The Boat Dealer: If you purchase a boat from a dealer, you'll usually get assistance in the loan process right through to the loan closing and vessel titling. They have access to several finance sources, extended guarantee programs and may even offer special finances to suit your needs.

The Boat Broker: Some people employ brokers to assist them in the buying of a boat. Your broker will certainly know the best finance programs that will suit you. He will help you in the process of applying for the loan and securing the best deals. His expertise will help you in securing the best boat for the best deal.

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