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Go Back   WakeWorld > >> Boats, Accessories & Tow Vehicles Archive > Archive through April 09, 2008

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Old    Alex Murry (tripleup)      Join Date: Apr 2004       03-30-2008, 4:17 PM Reply   
I have been in the car business for a few years now and have always dealt with Hondas and Acuras which lease very well. It seems that some of major boat manufacturers (Malibu, Correct Craft) may look at leasing their boats. I would be interested in it. What do you guys think?
Old    Nu Bu (05mobiuslsv)      Join Date: Apr 2006       03-30-2008, 4:37 PM Reply   
That would be great I would definetely be down for that.
Old    all eyez on me (ponte_06_x2)      Join Date: Jan 2006       03-30-2008, 4:40 PM Reply   
great idea. its a great chance to see if boating is really what they want to do for rec fun. if not then its real easy to get out of.
Old    Bill Sloan (bill_sloan)      Join Date: Nov 2007       03-30-2008, 4:43 PM Reply   
Is a lease that easy to get out of? I have never leased a vehicle so I am pretty ignorant of the process. It would be pretty cool to be able to pickup one or two year old lease boats for a good price.

(Message edited by bill_sloan on March 30, 2008)
Old    Nu Bu (05mobiuslsv)      Join Date: Apr 2006       03-30-2008, 4:48 PM Reply   
A lease is short term so you're only committed to it for that short period of time then you can either turn in back in or work out a deal to buy it.
Old    TigeMike (chpthril)      Join Date: Oct 2007       03-30-2008, 4:59 PM Reply   
IMO, boating is a long term investment. This would be good for someone that would turn the boat every couple of years like some do with cars.

Leasing is like renting a house or apartment. It has some advantages, but you build no equity and walk away with nothing at the end of the lease.

I think it would work for a few people.
Old    Alex Murry (tripleup)      Join Date: Apr 2004       03-30-2008, 5:03 PM Reply   
It would definitely be better idea than doing a 15 year boat loan.
Old    Team CBK....Nate (cbk)      Join Date: Aug 2006       03-30-2008, 5:10 PM Reply   
I highly doubt this would ever happen, there aren't enough boats sold to support it, especially inboards. I am actually surprised that auto manufactures are still offering leases.I spent several years in the car business in Finance and I am still wondering how manufactures actually come out in the black on leases. If you are going to lease you have to be committed, it is very difficult to trade out of a lease.
Old    eric ivey (ericlee)      Join Date: Apr 2007       03-30-2008, 6:04 PM Reply   
I think alot of people buy new boats and pretty much lease them. They pay the monthly payments and hope to trade it in after a couple years for the new model and for the most part sell it for what they paid for it. Sure, you are gonna loose some money but I think alot of people including me would be fine with that. I have a 20 year term and there is no way I am going to pay on my boat for 20 years. I hope to trade it in or sell it after a few years and hope to sell it for almost the same amount I paid for it. Boats don't depreciate....
Old    shane (auto)      Join Date: Aug 2002       03-30-2008, 6:12 PM Reply   
^^^^^^

Winna, Winna, Chicken Dinna. My Malibu goes in every two years for a new one.

(Message edited by auto on March 30, 2008)
Old    Chris Walker (redsupralaunch)      Join Date: Aug 2002       03-30-2008, 6:22 PM Reply   
Alex - After being in the car business, I suprised you think its a good deal. Dealer sells car to leasing company who marks it up and rents car to customer? Come on.

Ford only cut about $75 off the payment on a F250 Powerstroke for a lease. Thats is stupid.
I only have 3 payments left on my Chevy and its all mine! Im going to take a payment vacation for a while.

Im with Nate - market is too small - and we are smarter than that.
Old    Joseph Puckett (jpuckett)      Join Date: Apr 2005       03-30-2008, 6:41 PM Reply   
Chris,

At the end of three years when you have two years left on your five year loan will your truck be worth what you still owe? That is were leasing is better. If you are the type of person that keeps a car or truck payment and trades every three years you are better off to lease. But if you are the kind of person that pays the loan off and keep it untill the wheels fall off the leasing isn't for you.

(Message edited by jpuckett on March 30, 2008)
Old    TigeMike (chpthril)      Join Date: Oct 2007       03-30-2008, 6:48 PM Reply   
If someone is upside down on a car, truck, boat, after 3 yrs, you didn't put enough down IMO
Old    Nu Bu (05mobiuslsv)      Join Date: Apr 2006       03-30-2008, 7:02 PM Reply   
^^^True that...
Old    Team CBK....Nate (cbk)      Join Date: Aug 2006       03-30-2008, 7:04 PM Reply   
"Boats don't depreciate"

eric - Seriously, say you were not serious.

I also think that the boating market is too unpredictable. If you haven't noticed, in the last five years inboard boat prices have sky rocketed. I have a strong feeling that the next couple of years are going to be somewhat different. I'd say that you'll see 09's and 10's for less than what most will owe on their 08's. It will probably resemble (in a small way) the housing market. Believe me, I hope that the market stays strong and continues to grow the way it has over the past five years, it could only be to my benefit. Just my .02...again!
Old    Joseph Puckett (jpuckett)      Join Date: Apr 2005       03-30-2008, 7:14 PM Reply   
But when you put money down you are just prepaying the depreciation.
Old    Joseph Puckett (jpuckett)      Join Date: Apr 2005       03-30-2008, 7:17 PM Reply   
"Winna, Winna, Chicken Dinna. My Malibu goes in every two years for a new one"

And Shane what does it cost you every two years?
Old    Alex Murry (tripleup)      Join Date: Apr 2004       03-30-2008, 7:21 PM Reply   
Chris- Honda doesnt use a leasing company it is residual based so the better the vehicle is expected to hold its value the higher the residual and less the payment. Leasing is not good on most domestic cars because they dont hold their value like imports.
Old    TigeMike (chpthril)      Join Date: Oct 2007       03-30-2008, 7:23 PM Reply   
"But when you put money down you are just prepaying the depreciation."

I dont look at it that way, but maybe so. I'm 2 years into a 5 yr note and I can sell today and have equity for the new down-payment. What's wrong with that?
Old    shane (auto)      Join Date: Aug 2002       03-30-2008, 7:30 PM Reply   
Prepaying depreciation is an interesting thought, not sure it's really possible according to FASB

I don't discuss what I pay for boats, all I pay is for is the tax though. I treat the purchase as a lease vs. yanking 50K or so out of the bank, instead of $400 a month.

Alex, you are correct on imports, BMW has an excellent residual in which leasin is attractive if you choose to go that route and get a new car every 2-3 years.
Old    Joseph Puckett (jpuckett)      Join Date: Apr 2005       03-30-2008, 7:37 PM Reply   
I'm not saying that it is wrong but the depreciation in first two years is a killer. Especially if you purchased a new car or truck. And usally most people are upside down at that point in their loan.
Old    Joseph Puckett (jpuckett)      Join Date: Apr 2005       03-30-2008, 7:43 PM Reply   
Shane,

But most people don't do that. They want to go back in two years trade boats and then roll the difference into the loan on the new boat. What I was getting at is that it does cost you to trade every two years. Some people would think that Malibu's appreciate in value.

(Message edited by jpuckett on March 30, 2008)
Old    Alex Murry (tripleup)      Join Date: Apr 2004       03-30-2008, 7:43 PM Reply   
The main thing that money down does is save you interest. The less money you are financing the less interest charge you pay. Generally lease rates (money factors) are less than conventional interest rates.
Old    Nu Bu (05mobiuslsv)      Join Date: Apr 2006       03-30-2008, 7:47 PM Reply   
Malibu's do depreciate don't let anyone fool you, maybe not as bad as some brands but they do. I'm sure shane has a hookup at a dealership or something if he's that successful at swapping them every two years. You really just have to buy them right to make it work for you.

(Message edited by 05mobiuslsv on March 30, 2008)
Old    shane (auto)      Join Date: Aug 2002       03-30-2008, 7:48 PM Reply   
Hangar you are correct, a lot of people are upside down within two years due to low money down. Leases/buying, you have to come up with some cash at some point or you are just rolling neg equity.
Old    Tanner Russell (tanner)      Join Date: Oct 2005       03-30-2008, 7:51 PM Reply   
Funny you say that... I was thinking about just that very thing today. I would do it.

I can't do it on my trucks b/c I put on 50-60K a year. I'd be eaten alive by the mileage penalties.
Old    Joseph Puckett (jpuckett)      Join Date: Apr 2005       03-30-2008, 7:56 PM Reply   
Tanner,

You are taking a hit one way or another putting that kind of mileage on it.
Old    TigeMike (chpthril)      Join Date: Oct 2007       03-30-2008, 8:01 PM Reply   
^^ That puts Tanner at a "below agv Black Book" value, but if it's a company vehicle, the company can swallow the hit better then a personal auto loan.
Old    Tanner Russell (tanner)      Join Date: Oct 2005       03-30-2008, 8:07 PM Reply   
Hangar, I have a deal w/ my dealer, whose house I built, that I trade out for 6K every year. Half of that 6K I write off. So 3K for a new truck once a year. I'm willing to take a hit like that.
Old    Nick Heckerson (kstateskier)      Join Date: May 2002       03-30-2008, 8:07 PM Reply   
Correct Craft actually tried this in the 90s, before the wakeboard boom. They only offered it for about a year if I remember correct. I remember seeing it in their ad in WaterSki magazine. It seems like it was right when auto leasing was very popular. It must not have worked out well.
Old    eric ivey (ericlee)      Join Date: Apr 2007       03-31-2008, 5:30 AM Reply   
I guess I need to go into detail about my comment "boats dont depreciate" Is this a better commenet "Boats dont depreciate as much?" Last time I checked you cant get an auto loan for 20 years yet you can get a boat loan for 20 years. I guess the banks agree with me by saying that boats dont depreciate as much. With that being said if you buy a new or used boat and get a decent deal and you want to trade it in every few years the boat will not depreciate as much so your getting more back when selling private party or trading it it. I would even go as far as saying if your smart and buy your boat in Dec and then sell it April and May you can make money on the deal.
Old    Dale Robinson (daler)      Join Date: Mar 2008       03-31-2008, 6:56 AM Reply   
From a marketing standpoint, boat leasing probably makes sense.

But from a consumer standpoint, making payments (either leasing or a boat loan) for a boat sounds like a terrible idea.

I know many people make payments for boats but I'd rather see someone buy less boat and "own" it rather than make payments on a depreciating asset.

I think the - give it to me now and I'll pay for it over time - mentality holds people back from becoming financially secure.

Boat leasing exacerbates this problem because boaters could pay less per month than if they bought the boat over time, but that lower monthly payment is a lot like a teaser rate on an adjustable mortgage.

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