HOW TO FINANCE YOUR BOAT
Tips on Financing your Boat
Whether you’re buying a new or used boat it can sometimes be difficult navigating the many steps involved in getting insurance and financing squared away. With a little help from experts you can find ways around any of the challenges. Many dealers and boat brokers have great relationships with financial service experts that can help navigate what can be a complex process.
Tips on determining your financing options of a new or used boat
If you need to finance your boat, you need to be aware of what is best for your financial well-being. To calculate the cost of financing your boat, consider these important factors:
- Determine your budget: How much can you afford to spend? What are the terms of a loan that would work best for you? Before even looking at boats, it's a good idea to go over these questions and come up with some numbers—it will make things easier down the road.
- Consider these Financing Factors: Conduct some research and determine your targets for the: Loan Interest Rate, Length of the Loan, Down Payment, Credit Score, Total Amount to Finance.
- Buy used when possible: Boats depreciate pretty sharply in value, so if your main concern is keeping costs down or maximizing what you can get for your money, consider buying used.
- Ask around: If you know people who've bought boats before, ask them about their experiences with financing, and what they would recommend doing differently next time.
- Find a Financial Expert: Financing a boat and dealing with insurance can be a bit complicated. Ask your boat broker to recommend a reputable Financing firm that specializes in the boating industry so you can compare financing options and make an informed decision.
Use a Boat Loan Calculator
A great way to determine how your monthly expense will differ for different loans options you can use a Boat Loan Calculator to run get an idea.
Of course, there are some other variables that can come into play. Credit scores, debt ratios, and net worth may all be considered by the lender, more or less depending on your personal circumstances and the size and term of the loan. However, there are a few generalities that hold true for the vast majority of boat loans:
- Interest rates generally go down as the loan amount goes up.
- Interest rates generally go down as the term of the loan goes down.
- Higher loan amounts can usually be stretched over longer periods of time. In most cases, boat loans range from four to 20 years.
- Usually, the lender will be basing a boat loan on a 10- to 20-percent down-payment. That said, there are some no-money-down deals out there.
- Often, you can roll the expenses of accessories like electronics, trailers, and even extended warranties into a boat loan. Just be sure to pick out the complete package you want, ahead of time.
- Most lenders will be looking for credit scores of about 700 or higher. You can get a boat loan with a lower credit score, but expect that you may have to pay a penalty in the form of a higher interest rate or a larger down-payment.
Figure out what kind of boat you'd like to purchase
Once you've figured out your budget, it's time to figure out exactly what type of boat you want. This is a decision that requires some research and will be very specific to you. As we're talking about this section, consider the following:
- What are your reasons for wanting a boat in the first place?
- How do you plan on using the boat? Cruising, fishing, waterskiing, racing or a combination?
- Do you want a new or used boat?
- What size boat would be ideal for you?
- What type of boat would be ideal for you? (i.e. bowriders or center consoles)
- What features are most important to you?
- What kind of engine do you imagine yourself having (inboard/outboard)?
Modern boat financing options
Even if you have the cash to buy a boat on the spot, it’s important to consider your loan options. Financing can help you maintain liquidity, but more importantly, it might also help you get into a more expensive “dream boat” that might otherwise seem out of reach. And boat financing today is much different than it was in the past. Boat loans used to be more limited in duration, but today terms of 10 to 20 years are quite common. Interest rates are still low. And the down-payments required these days can range anywhere from no-money-down to 20-percent.
Find a finance company that offers you value and makes it easy to get on the water
One of the most important things to consider when financing your boat is the finance company. A good finance company will offer you value, along with making it easy to get on the water. A poor finance company may result in a high interest rate and lengthy application process, as well as a multitude of other problems.
Here are several steps to finding a good finance company:
- Visit forums: Many boating enthusiasts use forums to discuss their experiences, so be sure to look around before choosing your finance company. If others have had bad experiences with a particular company, you'll likely see that reflected in user reviews.
- Consider referrals from friends, family members, dealer or boat broker who have financed boats previously: While recommendations should not be taken as fact, they often give insight into companies' strengths or weaknesses based on personal experience.
Strongly consider a specialized marine lending service. A boat and a car are very different products when it comes to borrowing money. You may be able to get a better deal through a specialized marine finance provider than you could through your bank.
Tampa Yacht Sales uses a leading financial services provider Jennifer Meyers and the Luxury Financial Group, who’s been an expert in the marine lending space for over 20 years.
For more information about how Tampa Yacht Sales can help you find the boat of your dreams contact Shane Faunce at (727) 513-7615 for more information or view our current listings.
More about Jennifer Meyers and the Luxury Financial Group
Luxury Financial Group’s experienced team uses a vast network of contacts to provide buyers with access to more yacht lending options than anyone else in the country. Whether you are a first time boat buyer, an existing yacht owner looking to refinance, or are in the market to upgrade to a newer or larger yacht, our loan programs are designed to offer you the most attractive of options. Explore some of the ways you can live out your dreams with Luxury Financial Group as your partner. Contact Jennifer Meyers at C. 954.816.1818 or firstname.lastname@example.org.
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