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Old     (vguy75)      Join Date: Feb 2008       01-07-2009, 7:42 AM Reply   
I know the issue of price point boats has, and is still, being passionately debated on WW, but nobody that I'm aware of seems to have brought up the idea of manufacturers lowering their financing rates for boats.

Quickly looking around Searay and Mastercraft appear to be charging 9% (not sure about others as it wasn't readily available) and some other financing companies are around 7%. I strongly suggest that if manufacturers were to lower their financing rates they would likely gain additional sales.

I like to pay cash for all my purchases or finance them for short periods of time at reasonable rates.

As an example, I quickly crunched numbers on the Searay website and came up with the following:
Boat purchase $35,000 w/ $10k down ='s $25k to finance (all #'s rounded and approximate)

Payment per month
A. 5 yrs @ 9% ='s $519
B. 5 yrs @ 5% ='s $472
C. 5 yrs @ 0% ='s $416
D. 3 yrs @ 9% = $795
E. 3 yrs @ 5% = $749

Note: I used 0% above for interest sake (haha) iot see what the savings per month would be iot save up the same amount of principle and buy the boat with cash.
Also note that I didn't factor in the interest that could be made if the money were invested while saving for a boat.

Interest over 5yrs (depending how you calculate it)
A. ~ $6200
B. ~ $3360
C. obviously $0
D. ~ $3620
E. ~ $1974

Anyway, paying over 10% of the purchase price in interest for a depreciating asset seems absurd (option a, b, d). I know there is some intrinsic value in living for today, but I'm planning on retiring early and don't want to throw money away. Paying 5.6% on the purchase price (i.e. $1974 in interest) I could live with - it's less than the price of a good vacation, comparable to a real estate agent fees and $6.58 per hour if you put 300 hrs on the boat over the 3 yr finance period.

Boat manufacturers take note... there are people out there who have the means to purchase a new boat, but choose not too based on your financing rates.

As for the other half of my caffeine-induced rant:

Build a boat without:
1. Mis-matched upholstery (Axis) - basic would have looked much better - my old Sidewinder has a better looking two-tone interior
2. Billet / chrome anything - I have no need for my boat manufacturer's name to be machined into my tower or better yet, my exhaust tips that will sit in the water all summer. It looks great if you trailer your boat or have a boat house, but unfortunately there are those of us who prefer to keep our boat in the water for the majority of the summer and don't want to be polishing "bling" iot to keep it for oxidizing.
3. Disco lighting - save it for the options list
4. 300+ hp engines (yes, I'll be the first to admit that I love hp, but there are lots of boats out there with 250-265 that work fine.
5. Complex electronic gauges that are going to break down when exposed to the elements
6. Crazy graphics packages that are going to date faster and look worse than late 80's neon / turquoise ski boat graphics
7. Bizarre towers that are going to look worse that Mastercraft's old "Safe-T-Top" in a few years once they go out of style

Build a boat that is:
1. 19-20' range
2. Strong
3. Durable
4. Reliable
5. Basic analog gauges - VDO gauge package perhaps
6. Basic engine - 5.7 260hp Mercury or PCM Prosport 275hp / 305 lb torque - have other options available though - perhaps even a V6 boat iot save some money. A 220hp 4.3 with the right trans / prop combo for holeshot could work for some people (i.e. prop for holeshot and have WOT top out around 30-35mph)
7. Basic stereo package - cd w/ mp3 input and 4-6 speakers
8. Non-skid deck instead of carpet
9. Basic tube tower that blends in with, and compliments, the lines of the boat - perhaps powdercoat or anodized as an option
10. Ballast tanks as an option - perhaps fitted for, but not with - i.e. tanks are built into the hull, but owner installs afterwards via a kit or aftermarket parts
11. Basic graphics - i.e. two-tone gelcoat something that isn't going to date and will always look appealing ie. metallic Mastercraft Stars and Stripes, red / black Prostars, some Nautique 2001s, older Donzi's, etc)

Build that for $30-35k with a decent financing rate and it would be a strong seller. I know people will say it can't be done, but Searay, Regal, etc, seem to be able to build a boats in the mid 30's, so why can't someone build a basic inboard in that price range?
Old     (byrd)      Join Date: Dec 2005       01-07-2009, 7:55 AM Reply   
To answer your question, most manufacturer's financing is done by a bank, not the manufacturer. Right now, in today's economy, there are not too many banks that really want to lend money on anything much less a depreciating asset. Autos are in the same boat, no pun intended...
Old     (stanfield)      Join Date: Mar 2004       01-07-2009, 7:56 AM Reply   
Do inboard boat manufacturers even offer financing to end users? Its always been 3rd party for myself. I didn't think these guys did enough business to have a Ford Credit or GMAC financing sort of situation going on?
Old     (psudy)      Join Date: Dec 2003       01-07-2009, 8:07 AM Reply   
Boat loans are generally high risk loans. If someone gets in trouble the first thing they are going to quit paying on is a recreational item.
Old     (amo)      Join Date: Jan 2009       01-07-2009, 8:08 AM Reply   
Jaak, I have owned a 20ssv, and I currently have a MC X-star. I agree that there nees to be a mid range boat. There are choices out there right now, but maybe not exactly in the price range. We know the markup on a boat of any kind is high. I think an explanation to your queery would take too long and be boring. That being said, I think Moomba is doing a good job of building a moderately priced boat where you can choose just about everything you want on it. If the manufacturers are going to build a boat and sell it in the price range of 30-35k the quality will be sacraficed.
Old     (hatepain)      Join Date: Aug 2006       01-07-2009, 8:12 AM Reply   
Boat manufacturers that due offer financing are borrowing their money to thus need to charge a higher rate in order for it to pencil for them to lend. Yes, credit has tightened a little but really not all that much. If you deserve financing you will get it and with some of the more aggressive rates that I've seen in years. Now this perspective is coming from the auto industry which has been a little less volatile than the boating so I could see lending restrictions being further tightened when it comes to recreational equipment.

Oh and the boat your describing (for the most part) does exist it's called a Sanger.
Old     (ponte_06_x2)      Join Date: Jan 2006       01-07-2009, 9:22 AM Reply   
hey paul. not now a days. people walk from a home faster then a boat.
Old     (psudy)      Join Date: Dec 2003       01-07-2009, 9:47 AM Reply   
Which is why we are in the mess we are in. When people start valuing boats over their homes, you know something has to be corrected.
Old     (meathead65)      Join Date: Sep 2006       01-07-2009, 9:57 AM Reply   
Boat financing is still readily available, and rates are decent...not what they were 3 years ago, but still pretty good. Good to very good credit will get you a 10-15 year loan in the high 6 to mid 7 percent range.

The credit crunch is hitting the below average credit score guy the hardest. Last year we got those guys bought quick and easy, with a slight APR bump. Now, a credit score under 660 or so is gonna make a boat loan tough to find, and if you find it, the rate is gonna make you pucker up. Expect low to mid teens at best.
Old     (aarond0083)      Join Date: Apr 2007       01-07-2009, 10:35 AM Reply   
I just got 6.4% on a 12 year term for my new boat purchase. I'm pretty happy considering the boat I am trading was at 10.25%. I had to settle for that rate two years ago because my credit score wasn't high enough, as meathead mentioned above.

I am going from a 2007 to 2009 with a much cheaper payment. I had positive equity in my trade, which acted as a down payment so that helped a lot too.

Great rates can still be had if your credit score is 700+.

(Message edited by aarond0083 on January 07, 2009)
Old     (bftskir)      Join Date: Jan 2004       01-07-2009, 10:50 AM Reply   
they walk from the boat first
Old     (aarond0083)      Join Date: Apr 2007       01-07-2009, 11:01 AM Reply   
I know I would if I ever had to make that choice.
Old     (blind_pete)      Join Date: Nov 2008       01-07-2009, 12:13 PM Reply   
where did you get the 12 year note at 6.4 and was there a early pay off penalty?
Old     (4x4chevyguy)      Join Date: Oct 2008       01-07-2009, 4:25 PM Reply   
Well as for a price point boat i woul dsay that would be centurion V drive boat stoar at 35k
Old     (aarond0083)      Join Date: Apr 2007       01-07-2009, 4:48 PM Reply   

Have to be a member. No pay off penalty.

(Message edited by aarond0083 on January 07, 2009)
Old     (gti2lo)      Join Date: Nov 2005       01-07-2009, 5:57 PM Reply   
If you were smart and own a house take out a home equity line of credit to buy the boat. Mortgages usually run at prime or prime plus 1 at the most... Heck that be typically in the range of 3-4.5% for most.
Old     (gti2lo)      Join Date: Nov 2005       01-07-2009, 5:59 PM Reply   
Just noticed you are in Canada...wait for show show season and banks will do "toy" loans... expect 7-9% fairly typical.

With a boat you are going to loose money regardless, it's about having a good time and enjoying on what a boat can offer.
Old     (tj_in_kc)      Join Date: Jan 2008       01-07-2009, 7:42 PM Reply   
Jaak - Boats loans are in the same category as RV loans to banks as far as risk. It's not an item anyone needs to live their life in the most basic survival sense.

People will let their boat be towed from the driveway by the repo man before they move their family out of their house and give it up (except for the crazy bastards in California who are ruining America).

Its a more risky loan, you are paying for that risk in a bit higher interest rate.

I bought a Malibu V-Ride last year at 6.9% from US Bank so decent rates are out will have to do some searching

Wakeboats cost more to build than SeaRays b/c they make wayyy less of them, amongst other things.

Good luck in your search for a new boat. Boat show season is one of the most exciting times of the year to buy, and like Greg said banks will be at the boat shows, or in contact with the dealers there with better than average rates so watch for that.

I disagree with Greg on the equity line of credit idea.

If that situation were to come up and you couldn't make your payments having them take your boat is better than having them take your home. IMO (ha-ha. but i don't live in CA)
Old     (ponte_06_x2)      Join Date: Jan 2006       01-07-2009, 8:22 PM Reply   
tj. a lot of people in cali are screwed. my boat right now has more value then my home. nothing like being 200 grand under water on the crib. california love
Old     (bftskir)      Join Date: Jan 2004       01-07-2009, 8:32 PM Reply   
are there foreclosures in Kansas?
sure as heck are.
Old     (tj_in_kc)      Join Date: Jan 2008       01-08-2009, 6:54 AM Reply   
lol, i'm just giving you CA guys hell.

if you want to see how Cali is the problem look at this Federal Reserve chart, specifically:
Figure 2 - Mortgage Delinquency by County
Figure 7 - Percentage of Home Loans with Piggybacks by County

i know it's not your fault. Houses in Cali are expensive, $500k for a 3 bedroom, thats insane. People with piggybacked loans with zero down have much less to lose. Its easier to walk away when you don't have tons of your own money in the house.

if you aren't someone that took out a bigger loan that you could afford you aren't one of the crazy bastards i'm talking about.

(Message edited by tj_in_kc on January 08, 2009)
Old     (meathead65)      Join Date: Sep 2006       01-08-2009, 8:50 AM Reply   
I'm no financial wizard, but firmly believe it is flat foolish to pull money out of your home to buy a boat. The general rule: "Never use an asset that appreciates to finance one that depreciates". Granted, the situation in much of America has killed houses that are appreciating, but this too shall pass.

Your Home is the most important long term investment you can make....don't use it as an ATM.

The flip side is that a lot of folks did just that...pulled equity out of their homes to buy boats, cars, etc....when they walk away from the house, they own the boats and cars outright, and can either keep them or sell them for pure cash.
Old     (loonytik)      Join Date: Apr 2008       01-08-2009, 11:58 AM Reply   
My boat financing was 5% through a bank in New Jersey that I found myself through Google. I live in Georgia and had to pay some overnight fees for the documents but I got a great deal on the financing.
Old     (cmcathy1)      Join Date: Dec 2007       01-08-2009, 12:30 PM Reply   
Boat manufacturers make boats, banks loan you money. While Iím sure Mastercraft would love the bank to give you the money to buy a boat from them and in no way be compensated for it, I donít see it happening. Also, while the Fed Funds rate is close to 0%, your home and boat loans are much closer tied to the LIBOR. Like Aaron said USAA has good rates, and check out your local credit unions. I got 4.9% a year ago from my local credit union.
Old     (vguy75)      Join Date: Feb 2008       01-09-2009, 7:24 AM Reply   
Thanks for your response.

Wasn't aware that most manufacturer's went through banks, thinking about it now though I do remember seeing a lot of GMAC financing the last time I was at the Toronto boat show (unfortunately quite a few years ago).

Understand the points wrt markup / assembly line construction vs. semi-custom or handbuilt and lower production #'s than i/o boats. Mainly just frustrated that there aren't more 19'ish inboards in the 35k range.

Forgot about Moomba, and never really gave much thought to Sanger as they aren't very prevalent in Ontario / east coast - other than the occasional 1970's bad-@ss hydro / flat boat v-drive w/ a blown big block. I went to their website and was quite impressed. The D215 is definitely a sweet boat. Hate N Pain, you're right, they do build boats pretty well like what I was describing. I really liked the layout / concept behind the MC 214 / X-14 prior to seeing the D215... still like the MC, just a little less now! ;)

As for rates, 6.4% for 12yr w/o any early payoff sounds like a pretty good rate. Those of you that got 4.9% and 5%, those are definitely good rates - were those no penalty for early payoff?

I've debated about the home equity line of credit to partially finance a boat, but unfortunately we don't have enough equity in the house yet (have approx 25%) to swing that. Just for interest sake, what kind of rates are available on a home LOC? From what I've been able to determine they are unfortunately not tied to mortgate rates (we have prime - .95 ). I'm likely going to use a home LOC to build a garage (aka boat storage / shop for my Volvo 544) when we refinance in two years. Totally understand you're going to loose money with a boat (Bring On Another Thousand), just trying to avoid loosing too much money. When I do buy new it will be something that I plan on keeping for quite a while. Will likely buy a used Sunsport / Wake/Sunsetter / Prostar 205 in the spring and use it for a few years until we buy new as we have a baby on the way and I'm applying for a Masters of Marine Management.
Old     (auto)      Join Date: Aug 2002       01-13-2009, 4:25 AM Reply   
You should never view your primary living residence as an investment.
Old     (gti2lo)      Join Date: Nov 2005       01-13-2009, 6:12 AM Reply   

Please remember financing in the USA is completely different than Canada.

Our banks are in much better shape, but don't be fooled as the banks are being careful as they don't want to be in the situation of the USA.

We have alot of rough roads ahead and we must be carefull with our choices, but no need to make life mundane and boring by watching the grass grow..

a LOC is dependant on your bank and your credit score.

I was thinking of getting a new truck and financing through TD bank and they were offering prime plus 2.5% on a 5-7 year term, or about 6.5%

I bought a boat last year at the Toronto boat show and got financing through MBO at 6.25% for 180 mths.

If you have a moment talk to the folks at your local marina to know the deals being offered right now.

Boat show's typically have special rates, Toronto show had about .75% lower rates if you bought then. It's currently ongoing till the end of the week.

If you want to deal with some honest folks, Call Buckeye Marine. They can help you out, also maybe even have a used Mastercraft for you! I thought I saw them having a 205v in inventory or even some others in the 20-30k range.


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