Down Payments?

Do banks always require 10% down? The dealers say they can fanagle the numbers so you don't have 10% to put down. How do they do that, is their any way to do the same with a boat bought from a person. Do they just front the cash and then get the full payoff amount. Say the boat was $30,000.00 and they wanted $3000.00 dollars down payment do the people just front the money and then get it back. Is that what the dealer does? I am not thinking clearly because I am so excited and want a boat so bad. I found a good deal and it is all I can think about.

(Message edited by grantmi1 on June 23, 2003)

I know payments are the only way to get things sometimes but make sure you know how much you will spend for that boat over the course of the loan, typical loan duration is 8-10 years and when it's all said and done you will have spent probably $60,000 on you $30,000 boat that is now only worth $15,000. Save as much as you can for that down payment!
Oh ya, to answer your question it depends on your credit rating and the lender as to what is required for down but 10% is probably the min. with good credit

It is not quite as bad as paying 60K for a 30K boat. On a 30K loan for 10 years at 8%, you'd pay 363.98 montly. Over the term of the loan you'd have paid 43,677.
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The bank needs to get something for loaning you all that money up front. Even a 40K for 15 years is not too bad IMHO. You could get a 40K/15yr at 7% and pay about 360/mo. This would equate to about 65K over the 15 years.
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The only thing that makes me nervous is if your stressing about the 3K down... you might want to make sure you have your ducks in a row financially.

PS - not sure what you mean about 'bought from a person' and 'front the money and get it back'.

If you buy a boat from a private party, say out of the newspaper, you'd get financing from your own bank. Your bank would do the same as a dealer (make you deposit a down etc) then once qualified, they would give you a certified check for the entire amout to give to the sellers.

For new boat you can do 15yr at 4.99% - am I ever going to own this thing?

Did you really find that interest rate and if so where?

keep in mind you have to put the 'total sum' in 'today' dollars, not 'future' dollars. i.e. do a time value of money study. then you will find out your 65k is not really 65k in today dollars.

also, yeah if you are stressing about a 3k down payment, how are you going to pay the TAX? that is the big one, also vests, anchor, etc

I am ok with the anchor and everything besides the boat comes with all the boat accesories. I also do have money for the other things but I would rather not blow my cash on a down payment when not needed. I have roughly $1500.00 I am comfortable with paying down. I have been boating for 25 years so I am aware of the accesories. Even if I did need to buy them I priced bumpers 2 new life vests, first aid kit, rope, anchor, teak oil and treatment, wakeboard rope with handle all for $305.00. The life vest were neoprene.

I am not in the boat market at this time, but I am planning on purchasing my first boat next spring. I could afford the payments now, but I wanted to save up for down payment, toys, etc. So realistically, how much money do I need to save on say a $40k boat?

I didn't realize there is so much up front cost, I am used to buying cars with zero down, having to throw in 10% up front was a shocker to me. Now you are talking about taxes, what else? Thank you.

Jb

Don't forget 3 amps, tower speakers, 6 - 6 1/2" speakers, 2 10" or 12" subs. ummmmm hmmmmm instalation, new Parks Board and Bindings, you forgot about the little orange flag, Insurance, storage, and the big etc. $10,000 easy. LOL It never ends, especially if you are addicted to Wakeworld LOL But out on the water with your family and friends = priceless, so go for it.

What they probably do is take a 30K boat, charge you 33K take the extra 3K and give it to you as cash, that you return to them as a downpayment, or something similar to that. They are not supposed to do it, but if they are desperate to sell boats, I am sure some dealerships would.

I agree I am always able to afford the things I buy, whether it be a house, car, truck, or just anything I have bought but I am not used to paying a large down payment. I think that some of us just work with our money different. I dont have visa bills and almost no debt. I just move my money more or save it I don't put out large lump sums. A lot of times I get a year same as cash and pay it within a year. Maybe I am crazy. My wife handles the money and she has a degree in business, and has worked at a bank for 8 years including management. Her family is not the type to buy boats though, they just stay home and do yard work and work on their houses. So she does not have experience with boating, so I thought I would get your guys opinons because I respect what boaters have to say about boating. I appreciate the feed back too.

Lol ,thanks Josh, now you are talking.

i always put %15 down on mine. The reason they charge a higher down payment on boats is because its considered a luxury item by the bank, and they know if there is a time your short on money you are more likely to default on a boat payment than you are on your house and cars (needed items)

Ok, I understand the "luxury item" logic, even though these people don't realize a boat is as much an essential to me as my house and tow vehicle.... But why can't they finance in the taxes like they do on a new vehicle purchase? Not that I want to pay interest on taxes, but to me it is better than having to shell out another $2k up front. This information is only going to make things more complicated when explaining to the wifey...

Jb

I am so with you man I agree 100%. Some of us have to struggle a little to get the damn things.

I bought my boat a year ago, here's what I remember:
They did put tax and license into total purchase price, similar to new car sales.
I borrowed the amount of money that would give me the best interest rate. I was going to put more down, but was informed I could get a better rate if I borrowed at least 20K. So in some cases, the more you borrow the better the rate.
T

I just picked up a new 03 SANTE- I couldn't believe all of the minor things that I needed- In my opinion I would rather lump EVERYTHING that i needed into one payment each month- as it stands with INS, reg, and tax it becomes a pain in the ass - but then again, nothing beats being on the lake...............