To sell or not to sell?

Ok, here's the situation.... I'm going out of the country for a year starting this Sep-Oct. It will be spring 2008 when I get a chance to ride again after this season.

I love my boat but I've had my share of issues with it too.

Should I sell my boat and buy another when I get back or put mine is storage? I'm just wondering what makes the most sense.

BTW, my boat is a 2005 Malibu VLX that is 1 year into a 15 year loan.

Thats a really tough question, but if youre interest rate is favorable you may be able to sell the boat and if youre able to put that in an interest bearing account, earn more because of higher interest rates than in the previous years. But there are many unknowns in this equation, but if you can afford it I would say now is the time to sell, people are looking to buy. Just look how many new boats have been posted on here recently.

If you like your boat keep it... just think of all that sales tax you will have to pay to get a new one! Wait, what is the sales tax rate in TX?

The depreciation plus the amount you would pay for storage would definitely be more than the sales tax you would pay buying another boat when you get back. No questions asked, sell it! Whatever money you have invested in it you can invest and earn money on while you are out of the country, and use that to put toward the new boat when you get back, and instead of having a 3 year old boat in Spring of 08, you will have a brand spankin' new boat in 08, or at least new than an 05.

The payment, insurance, and storage will cost $7500 for that year. I could possibly save $900 by storing it at my father-in-law's place though.

I still owe about $47K since most of it during this first year has been interest. Not sure what it would bring but I'm sure I would be upside down some.

The boat is a 05' VLX with 100 hours, Perfect Pass, Depth finder, wakeboard racks, 340hp Monsoon engine, 4 ballast tanks, wedge, bimini, cover, HD single axle trailer.

I wonder what I would have to get for it to make sense to sell it?

In this case, try to make the decision as a purely financial decision, not an emotional one.

Boat payments, interest, insurance (you still need it even if its stored), storage, depreciation, yearly state tax / registration fee.

There will be plenty of boats for sale when you get back. Factor in the unknown price of gas 2 years from now (which may affect the boat market) and I think your decision is pretty clear.

Chad, where are you going? I might be going to Djibouty (Sp?). I am in the same boat. No pun intended. If I go, do I sell my boat, and get a new one later, or just let my brother use it while I'm gone.

Pretty much all depends on what you owe for it, and what you can sell it for. In the typical situation, someone who is only 1 year into their 15yr loan is going to get killed selling it. If you get upside down on it. But you know that.

Chad, you are in Belton which is pretty close to me.. Just leave it in the barn, totally out of the weather and I will use it periodically(sp) for you to make sure it doesn't deteriate, and that everything is still working your cost.............NC

If you can sell and get out from under your loan, or even get ahead and have some cash to invest, then you should definitely sell. Simple as that.

sounds like you are deploying, don't forget that they have to lower your interest rate to 6% per federal law for the whole time you are deployed...

Kenny, is that true for boat loans too? I thought it was only for credit cards.

I hate talking about this on the internet, but since it is obvious to most, yes I will be deploying to the Middle East. My employer also has a plan that pays 10% interest on anything invested while overseas but I think there is a limit to how much you can invest. Since I'm married, I think I'll only save about $25K during that year.

Doug... thanks for looking out for me. That brings up another question though.... prep it for longterm storage or let my wife use it and take care of the services, etc... if she can get her brother or dad to tow it and get it in and out of the shed.

if, thats is if you are military All loans are required to be reduced to 6%, the only loan I don't know about is a home loan.

Look up the soldiers and sailors relief act, most lenders already know about it and you just need to fax them a copy of your deployment orders. I already contacted my loans and they all did not have a problem with complyingand stated they just needed the orders to show proof. Thats for a length of deployment also. If you are a civie then I don't know if it'll work for you...

Consider rising interest rates. The price of gas will pull the economy back, the Fed will up interest rates in an attempt to counter act this. You maybe looking at an additional 2-3% higher interest rate if you applied for a loan on a new boat when you get back.

Hey Chad, Do you know anyone you trust that you could work out a deal with, something like, they pay 75% of the payments as a lease charge, then they can use the boat? just an idea..

Good luck and be safe over there!

Well put Craig, when I got my loan interst rates were much lower than they are now, and you know its only going to get higher from here. The economy can't stay at the peak forever it will eventually slide us back into a recession. Just take a glance at how drastic the housing market in CA has changed..

I'm sitting here trying to justify selling it. My wife will be the one I have to convince.

Here are some facts:

1. APR is somewhere around 7% (currently owe around $47K as of May 06)
2. monthly payment for 180 months is $460 although I pay $500
3. Total amount financed was about $49,500 (also paid $1400 for PP out of pocket)
4. Enclosed storage: $75 per month
5. Agreed value Insurance policy: $590 per year
6. Total time boat not used: 20 months

As far as I can figure... during the 20 months that I can't use the boat I will pay out $11860 in payments, insurance and storage. Lets call it $12K.

I expect to owe about $46K in Sep 06 on the boat. If I was to save this $12K by selling my boat this September and put it down on a new $50K boat in May 2008, then I would only finance $38K which due to interest is not too far from what I would still owe on the 2005. In this case I would have a 2008 boat with full warranty, and not be upside down the day I buy it.

The storage, insurance, and interest on the 2005 when it's not being used just seems to push me towards selling.

I guess the questions to be answered are how much I could sell it for and what will I owe on it in May 2008 as my current payment schedule.

You are leaving out the biggest concern. Can you even sell your boat right now for your payoff amount? That will be your biggest challenge I think.

Don't everyone blast me for this suggestion but I've seen people post adds on Craigs list where they just want to lease a boat. You may get some wear and tear on the boat though but could be an option for still having it and not loosing any money if you can't sell. I've even seen people who want to lease it while you are trying to sell it. Anything goes on that website. Good luck man.

Yep, what I could sell it for will determine the course of action.

I'm sure my wife, who is an accountant, will tell me tonight where I'm wrong when she calms down for me suggesting such a stupid idea.

try to sell it, and if it sells it sells. Have a minimum and don't go below that. This is the peak selling time and you have a late-model premium brand. Talk to your dealer about a consignment deal as one of your options. They have lots of buyers and can handle financing.

If you can't sell it your decision is made for you.

Rich had good advice, if you can get a good price for it sell it but don't go too low.

If you can store it some place for free or at least cheap then that would reduce your cost. If you can store it some place safe then you might consider dropping the insurance for the year you are gone.

It appears that you are in Texas so I can't comment on tax issues, but if you were in California there would be a taxes that you would need to factor in. In California you would pay property tax of ~1% to keep it, or sales tax of ~8% to buy it (or something similar) back. If you are gone for two years then the difference would be 6% of ~$45K = $2700

So, if you were in California you would be better to keep if you wouldn't save at least $2700 in a sell / buy again. And that doesn't include the hassle of actually selling and buying.

Consider...What will boats cost in 2008 and with interest rates currently going up (8.75 in a lot of cases) could you replace that boat?

We ran the numbers and I would come out better selling it assuming three things:

1. I get pay off or reasonably close to it.
2. The price of a 2007-2008 model stays within about $1500 of a 2006 model.
3. The interest rate doesn't go up that much. Currently mine is 7.75% (not great) We put zero down for 180 months so we're paying a high rate despite our strong credit rating. The beauty of selling is that we could put $12K to $20K down on the 2008 model instead of paying over 50% of the current payment in interest, plus storage and insurance.

VLX's simliar to mine are asking $49K on boattrader.com. If I get close to payoff I think I'm selling the boat. Problem is that when I want to sell it is a bad time (September).

Boats go up around 4% a year if not more, so $1500 for an 08 not likely that low..

Yes its true even for boat loans, hell I recently went TAD for a Navy scholl for just under 2 months and even my timeshare with trendwest lowered to 6%, when I told them about me transfering they brought it up about the federal law and insisted on doing it for even such a short period of time. Call your bank and talk with someone in the know with federal law..

PLus a friend of mine up here with a credit score of 719 and good income could only qualify for a 7.99 with a credit union, rates are going up and not likely to slow this year.