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. Don’t 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. Don’t 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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