financing boats

I am planing on buying a new boat but going in on it with a few family members. I thought before I go to the dealer I would ask how much are monthly payments usually for mastercrafts, correct craft, and tiges that are priced around 50grand?

it all depends on the rate u qualify for, the length of the loan, & how much money u put down. sorry, but impossible to answer without that info.

No money down without tax and license will be around $600 per month with "A" credit.

Go into microsoft excel and use the PMT function.

In the rate field the equation should be the interest rate/12
for example 6%/12

In the nper field put the number of payments in months
If you finance for five years you should put the number 60 in this field. 10 years would be 120 etc

pv - is the present value of the boat. If you finance 50k put the number 50000 in this field.

50k at 6%, for 60 months, is about $1k a month and you pay around 10k of interest. The longer the loan the more interest you pay. If you finance the same amount for ten years you will pay $17k of interest at 6%.

Or just download the home mortgage template for excel. Works perfect and tells you how bad you're getting raped in interest every year.

Here's one that shows you what your paying the bank every year...

http://74.220.207.195/~southfa0/Customers/Payment_Calculator.html

your seriously going to go purchase a $50k+ luxury item and you can't fiugre how to calculate your monthly payaments?

Prime example of why we are all in this huge credit mess today!

So because he doesn't know how to calculate a loan automatically means that he doesn't have the money to make his payments? Does he need to know every little detail about the inner workings of a marine engine, the steps and tools it takes to fix gel coat cracks, or will it be too much to ask for anyone to help out with the upcoming questions that he might have along the way. Or have you already put him the "that guy and that boat" category as well? What is this forum for anyways?

50K @ 7.5%(plug #, if you can get it less, the payment will be less) for;

For 72 months= 864
for 120months= 593
for 180months= 463

I thought the same thing Sam when I saw the thread.

Then I saw he is 18. Rather then bashing on him I thought educating him on what actually went in to the payment would be a better route.

lmao, these threads crack me up! 180 months, can you say "upside down"?

Sam's a garbage man, he doesn't know any better...

Dave, finance for as short as you can afford. (See above "upside down".)

(Message edited by denverd1 on May 14, 2009)

Actually this economy has made me realize the value of cash on hand. It is actually a great time to finance long term, interest rates are low, market returns are starting to climb. If you finance something for 5 years then yes it is paid off but that is with a modest $750 payment a month. Or you can finance for 15 years with a monthly payment of $330 a month and bank the extra $420 a month. After 5 years you owe 30K on the boat "possible upside down" but you have 25 K in the bank for an emergency. If you need cash at any point during that time you have and if you default on your loan all they do is take your boat but you can still put food on the table. I am just saying these days the idea that long term loans are bad is gone, for the right person they are great.

^^^^Ahhh the voice of reason. Well put Erik.

This one is done for an auto loan but you can use it. It is nice because you can show the amortization schedule and see how much interest you are paying. You can also add money onto the minimum and see how much faster you will pay off the loan.

http://www.bankrate.com/calculators/auto/auto-loan-calculator.aspx

+1 Erik. I financed my new 210 for 12 years and will never be upside down. With rates this low, take advantage of it while you can.

Erik, great post! The only problem is people pick a $330 a month payment over 15 years cuz they cant afford the $750 payment. Thus not being able to bank the extra $429 a month for emergencies. Unless you put a big chunk down at purchase, it will take a long time to get level on any loan over 7 years.

I guess most of us are assuming someone that buys a boat can afford it. I guess common sense doesn't exist anymore though.

Erik, Nub, Aaron: Are you serious???? You're all telling me that you're stacking up $400 and change every month in a bank account somewhere???

Well, thats terrific guys. Nationally, we have had a NEGATIVE savings rate for over 5 years. That means we not only spend every dime we earn each month, but we charge to credit whatever we couldn't afford. Guys more power to ya for beating the national average by so much!

Here's another scenario that is more likely: YOu spend $50K on a boat, finance it for 15 years "cuz rates are low". Two years from now, your situation changes and for whatever reason, you now want to sell the boat. You're $50k boat is likely worth $30K, pry less in this market. But you still owe the bank $10K after you hock the boat.... I'm sorry guys, but this is funny and sad all at the same time. I guess you're all maxing out your 401ks and IRA too.... ROck on guys, maybe new boat sales can pull out of this recession.

THe value of Cash on hand: means budgeting $800 per month on a boat and putting the balance you dont' spend in savings!!!

Don't get me wrong. If you can afford it, go for it. I'm all about new toys.

I just see some of the logic here.

(Message edited by denverd1 on May 14, 2009)

Nacho not all of us are in that situation so don't group me into your stereotype.

see the edit bu'.

And it's a national average, very indicative of our society. Not a stereotype.

Nacho it is sadly true that there are a ton of financial idiots out there that got us into this mess. My MO is I don't finance anything I can't pay cash for ((house excluded) and always put a substantial down payment.

(Message edited by 05mobiuslsv on May 14, 2009)

Actually, more then $400 Nacho, getting a safe 3% return on my cash annually as well. Yes we have had a negative savings rate for five years, but prior to that we had an increasing or steady rate, during normal periods. In a normal statistical thought process that makes the prior 5 years the outlier. And if my situation suffers that bad in two years where the cash I have saved on my boat payment (i.e. $10,000+) can't get me by then worst case I loose the boat. It actually use to be the norm in our country to save I am just doing what several generations before me did, nothing new.

No the value of cash is budgeting a comfortable amount on expenses well still maxing out 401K and IRA, as well as saving 5% of your annual income. If you can do that and you have excess income and could fit a boat in there as well, on a 15year loan go for it.

I find that the average boat owner's equity can stay about even if purchasing a new boat, and financing at no more than 120 months. The average boat owner sells or trades out every 5 years.

We hear this talk about the inflation that is rolling down hill at us because of gov spending: if the economy recovers, people are spending, inflation is crazy, does that mean our used boats are worth more than they are today?

Ken Land
Bullet Lines
www.bulletlines.com

Ken speaks of the inflation issue, Erik's $400 at a "safe" 3% interest is actually losing value over time with an inflation rate over 3%(inflation expectations is much high than 3%). My 401K has consistently lost money over the last year due to the market crash. No wonder no one wants to save money, it’s not worth saving. Bottom line is to enjoy a boat you can afford!

what are interest rates on 15 yr loans right now? if you have great credit?

Ha... I totally agree on that point Shooter, I just chose the lesser of two evils, lose to inflation or lose to the market

"My MO is I don't finance anything I can't pay cash for ((house excluded) and always put a substantial down payment."

Mine too. I would bet that herein lies the problem for most folks...

Erik, if you've been saving like the generations before us, then plop down a nice chunk of it and reduce your monthly payments or finance term accordingly.

Good credit =8.5% with up to 15 year term. Nu Bu mentioned "no money down", but I think those days are gone. Expect to put 20% down (maybe a little less if you’re lucky or paying higher interest). I had no luck with my credit union (probably too small to understand boat loan), but many people on WW recommend them.

We just used USAA Federal Savings (not everyone qualifies, but if you got an immediate family member that qualifies, you can get in), and received a 10 year loan at 6.99% w/ 10 percent down (they would have also done 15 yrs at the same rate). USAA will 100% finance used boats as long as the max loan is 90% or less of NADA.

Here is a pic of our 2010 (yes 2010) MB F21 Tomcat that was finished today.




Ken Land
Bullet Lines
www.bulletlines.com

Shooter I wasn't recommending no money down, no bank will give a loan with no money down anymore.

I just got 6.74% on my boat from a credit union.

Nacho I still don't see your point, why would I ever lock up a large amount of my cash when it is so cheap to lock up someone else’s? Finance 101, make your money work for you.

obviously... i have the title to my boat. I don't expect you to see my point. You're leveraging a rapidly depreciating asset. make sense?

Enjoy your summer.

Well if that is your point then you wouldn't finance your house right now either right? That is a more rapidly depreciating asset, so you must own it out right or you rent.

The title to your boat doesn't put food on the table

I'm sorry, did you just say that a house depreciates faster than a boat????

Finance 101, huh?

I keep trying to end this, but you keep dragging me back into it with crap like that. Man, do what you want. But, you obviously dont' understand what you're talking about.

If you bought anytime between 2004-2007 yes in many parts of the country your house depreciated faster then your boat do the math.
600K house now worth 300K = Depreciation 50%
90K boat now worth 60K = Depreciation 33%
seems like simple math...let me know if you need help.

So you're upside down on it too?? It's getting ugly bro!!

Should've taken a HELOC out in 2004 and bought then!!

Wow that is one of the worst ideas ever take a HELOC out on your house to buy a boat??? So secure your boat loan w/your house...you must be a financial advisor.

Actually just bought last year so I got a great deal, 2 million dollar house for half price.

Another WW Pee-pee comparison thread, woohoo, lovely guys....

Now is a great time to buy if you can afford it. That's what it all comes down to right, what you are comfortable with. What works for one person isn't the best for someone else.

We just traded our old boat in for a 2005 Bu 23 LSV, couldn't be happier. 4.6% for 7 years was great for us. We should be able to have it paid off in 4. Again, do what you are comfortable with. If wakeboarding means enough to you to make sacrifices to have a nicer boat, go for it. Just be safe and be smart

Great deal adam that's what I'm talking about!!

Its abuyers market right now!

hope the numbers are right many variables possible , but basic idea, call me crazy, but it works for us. It really helps if you already have tons of equity in your house...not for recnt buyers.

original boat cost 45000 dollars
payment 84 dollars/month interest only (prime 2.25% in canada on dreaded credit line)
sell after 5 years for 30000 dollars
loss 15000 dollars
carries for 28 dollars interest on credit line for another 15 years

after 20 years(or later the better when selling house, pay off debt) 10500 payment(interest) for boat 15000(still owing) for loan (20 years later salary up double or more, inflation has eroded loan to say 7500 real value, house has gone up a bunch)
total 18000 real dollars lost, no boat





Pay off in 5 years 7% interest 891$ a month

53500 total payout , 45000 plus 8500 interest
sell boat for 30000 5 years later. total loss 23500 dollars. no boat

big difference in cash flow 891 versus 84, quality of life? 20-30 years down the road does it make a difference?

on the above example in the first scenario you pay off the rest of the loan.

in the second you own 30000 dollars free and clear.....to buy a new toy !

if I want to keep the the 30000 and buy a new toy I have to keep paying the interest on the original 45000 loan.....84$..........while in scenario 2 it is now 0.


in any event my payments are low over the long run.....with good cash flow monthly rather than having to sacrifice making huge payments over a short time. In the end I lose a little more.....but its really insignificant after 20-30 years of being a home owner.