what's the catch? new vs. used

I'm betting ready to end the two year research and hope to be buying a boat in the next month or so. Initially I thought I'd buy used as it will be my first time owning a boat (after quite a bit of time on others') but now I'm leaning towards buying new.

After talking to some dealers, it seems I can get a "simple" financing plan in which I don't have any monthly payments, just one full amount due anytime before year 15 is up (may be over-simplified) My thinking is this...

The boats I'm looking at are not the high end (MC/CC0 but probably Moomba or maybe a lower price Malibu. I have about 12k to spend now. Rather than put all 12k into a used boat, with this financing option my thought would be to put a little (or 0) money down and sell it in three or four years only losing probably 6-7 thousand in depreciation. With the financing plan set up this way, is my thinking correct?

If I make payments small enough to cover what i think depreciation costs will be, and use the money from selling to pay off the balance of the loan, will I really be out only what i put into it? Seems like there should be a catch but I can't see it.

Could someone who knows more about this help me out? Thanks.

What is the interest rate, that would seem to be a big factor. Also, you're probably going to loose more that $6-7 over 4 years, IMO. If you buy a Moomba, I would guess you could loose even more in resale, though they seem to be getting a better reputation, so I could be wrong.

i am in the finance industry... never heard of a loan that has no monthly payments... best case scenario would be interest only payments.. but that would be a stretch too...

normally you can get away with little (taxes etc) or nothing down and the remainder amortized over 20 yrs(new) or 15-10yrs(used).

i personally would never buy a boat with expectations on resale... you never know what will happen...

buy a boat you can afford... if you buy 1-3 yrs old.. most likely you will get a great boat with the early years of depreciation already taken out of it...

nothing worse than buying something.. and saying to yourself that you will get a certain amount for it in a few years time... not likely to happen...

buy a boat you want and like... and sell a boat because you are upgrading or you dont use it.. or you are selling for a good price...

but dont buy and already think of what you might get for it in the future...

just ask anyone in canada that has bought a boat in the last 3 years while the cdn dollar sucked... you can get a new 04 boat for less than a 2002-2003 new or used boat sitting on a lot...

too many variables...

buy what you can afford!

I bought a 2003 X-30 in Oct. The boat was originally bought in June and had 50 hrs on it. Paid 43k but also spent 2k to hav it delivered across the country. I figure I saved maybe 10k from buying new. If you can find a boat you like used, why buy new? boattraderonline.com seemed like it had the most boats for sale.

My recommendation is buy a used boat - you can find a decent one for 12K. Keep it a couple of years, learn from your mistakes (trust me - you will make some - better to have been made them on a used boat than your new one), save some more and then upgrade. Your 12K boat will depreciate minimally, you will learn some things (especially if you really want to blow a lot more cash a new boat) and in the meantime continue to save. Then upgrade and do it all over again. If you situation changes for the worse, you can always unload the boat and not have to worry the loan or being underwater. Also, the market for 10-15K inboards is strong - and most likely will continue to be as new inboards climb in price. I took these steps - and now own a 2001 MC X-9 outright.
I will keep this boat for another year or so - put in another 10K and upgrade again. Just my .02..

I have been in your shoes for the past 2 years as well, and I just purchased my first ski boat. I have been on a long hunt for a good deal and I finally got it last week. I bought a 1995 Mastercraft Prostar 205 for only $10,000! It is in excellent condition as well. I can't believe I found this deal. The guy just needed some money. It is loaded with Phat tower, speakers, lead, sacs, etc. The first 5 minutes in the water I hit something and bent the prop. Learned my mistake early, and I'm sure there will be more so I will be happy to learn them in this boat before I sell it in a couple of years and probably even make money on it. Then I can go out and find a newer boat when I'm ready for it. There are a lot of great deals out there for $12,000 so I would say keep looking and find what will work best for you. I don't see any way you will come out ahead by buying a new boat, it will just be nicer and you will spend more money. You will enjoy being out on the water behind anything and don't have to make payments, especially during the winter when you can't even use it. Thats my story of the new or used. Hope it helps. Oh, yeah, got mine off of www.flipsell.com

if you're concerned about depreciation, you should definitely buy a used boat.

Also consider a 2003 dealer demo. I have one that I will let go for less than the loan value on a 2003 used. And you still get the new warranty.

rider@boarditup.com

you guys are kind of backing up what I had originally thought, but like I said after hearing about possibly financing the boat this way it got my mind turning.

I have never really heard of this kind of set-up before either, but the Moomba guy at the show last weekend seemed pretty clear about it: I could put 0 money down, get a 15 year plan, whereby I was only responsible for the lump sum by the end of year 15 (cost+interest) Which led me to believe I could really only loose out on whatever the boat depreciates if I decided to sell it.

Again, may be too good to be true, but has anyone ever heard of such a thing? If not, suggest someone who is selling something decent like this used. I'm getting really tired of looking all over town and the internet and not finding anything that doesn't involve a 10+ hour drive to pick up.

It seems to me you would be on the hook for the depreciation (which could be considerable) plus interest. Interest on 35K compounded over even 6 or 7 years (since you are not paying down the principle) will be substantial. According to my calculations: $35,000 for 7 years at a 7% interest rate compounded annually = $56,202.

sounds like an interest only or balloon payment...

Sounds too good to be true. If it is, you most likely will be acruing interest on top of interest during the cycle. Instead of paying acrude interest monthly, you will have a big payment of principal plus interest plus interest on the interest. You most likely will be in for a higher price than just paying regular. They are most likely just trying to move the boat regardless and it does not matter to them what type of loan they are going to stick you with. There is not such think as free money, just financal tools to move products and stick the buyer. At that point the seller does not care because the product is gone. IF you can not afford a new boat, that is OK. We have all been there. Just don't get yourself into these funky loans. The traditional lending rules are there to protect you and the lender. If you do not qualify, then let it be. You will most likely be sorry in the future if you try to get by them.

On the resale, You would not be able to make "low" payments to keep ahead of the depreciation. Heck, you can not make a regular payment and stay ahead of depreciation. You will loose value on the boat. I refied my boat and the guy told me they all loose around 20% or the original loaned value the first year. I refied my boat after one year and sure enough. 20% on the nose.

Just be careful. Not trying to sound mean or negative, but, I do not want you to get stuck and not be able to enjoy your boat. You also have all the hidden costs that most likely will be $1000 a year or so. For us it is luxury tax of 1%, insurance, maintaning the boat, if you ding your prop it will be under the insurance deductable. Have fun with your new boat.

(Message edited by deltahoosier on February 10, 2004)

sounds like what I was thinking originally is still true. In my case a used boat would be the best option. Hopefully for around 10-12K I could find a pretty sweet boat to start with for a few years.

Any word on anything like that in Texas?

Don't know about Texas, but it is getting that time of year to find them

Go to www.boatraderonline.com and check out the for sale sections on wakeboarding websites

Check out the above plus - flipsell.com and Overtons.com (there is classified section located within the site). There are a bunch of other sites too - just keep searching on the web and you will find tham.

Check the sites often - I used to check everyday after work. Be ready to move quickly, boats in that price range tend to go fast. When I was shopping for a late 80's MC a few years ago, I had many sold out from under me - it can be frustrating. It has taken me 3-4 months of searching to find the right boat at the right price.

You need to stick to buying a used boat. Stick with a boat from the big three (Malibu, Mastercraft, and Nautique) and you will lose very little to depreciation. For example, we bought a 1993 MC PS190 about 5 years ago for $14,900 and we could easily sell it today for $12,900. Very little in the way of depreciation - especially considering the hours that I have added on the boat over the last five years. The hours alone account for the lower price, not the depreciation.

To buy a new boat you either need the ability to pay cash for it (no loan) or only buy it if you have the expectation of keeping the same boat for 10-15 years. Otherwise buying new is just another way to throw money out the window. (Flame suit ON)

The closest thing to an interest only or balloon payment loan you will find is a home equity loan. It will have a minimum payment (like a credit card) that will be slightly more than just the interest, but not anywhere close to a normal loan payment. Of course you still have to plan of having the balance payed off by the end of the term (which is usually 10 years) or you will have to refinance at the end of the term. And by that time your 50k boat has cost you 100k in payments anyway and is only worth 10k.

I just bought an '04 Malibu VLX that had 12 hours on it from the dealer here. It was used for an ogranized event and I'm guessing some demo runs, but it's in showroom condition. I figure with all the options I bought it for 8K less than a "new" boat. Like some of the other guys have said, get a demo or somthing with low hours if you can find something to your liking.

most inboards worth around $12k right now won't lose much more value, period. this is even more true with open bows and EFI. one thing to keep in mind on resale, however, is that most banks won't loan on a boat over 10 yrs old. i'm planning to sell my 96 VLX next year for that very reason. after that, you have to find a buyer with cash.