Purchasing a boat can be an exciting experience, but it’s important to go about it the right way. Most people don’t purchase a car without looking at financing, insurance, and their current budget, and a boat is no different. Before jumping into the water with your eyes closed, make sure you’ve performed your due diligence.
Before you run out and buy the nice shiny boat with the big motor, ask yourself the following questions:
Once you’ve answered these basic questions you can start looking for the best boat to suit your needs and wants. Don’t be afraid to get a small aluminum fishing boat if it’s only going to be you and another person fishing, but if you and your family want to hit the ocean, then it’s time to start looking into some serious boats.
There are benefits to buying new and buying used, and only you can decide the route you want to take.
New boats come with a warranty and you get the chance to get all the amenities you want. They’re more fun to show off and you and your new boat get create brand new memories together.
A used boat will save you a lot of money. You may find all the bells and whistles you want at a fraction of the cost. If there was anything wrong with it the first couple of years, the problems have likely been fixed. You may not be as worried if your boat gets a little ding compared to a new boat.
The three most common options for financing include:
A loan from your bank – By taking out equity in your home you have a chance to get a great interest rate, but it may take longer, require some extra paperwork, and come with a reduced ability for tax deduction of interest, so it is best to consult with your accountant before choosing this path.
Financing today is much different than it used to be. Your credit rating and debt-to-income ratio may qualify you for a 10- or 20-year loan, low interest and no money down. Keep in mind that it always helps to have more money down if you’re reaching for a monthly target goal. It may also help you toward looking at a more expensive boat you didn’t think you could afford.
Not necessarily with new boats, but even new yachts are oftentimes surveyed. Surveys are another cost you have to consider with used boats and some higher-priced boats. It depends on the lending or insurance company. The main types of surveys are:
Lending and insurance companies don’t want to fund or insure a boat that will have problems in the near future. You’ll need to talk to your insurance company and your lender about surveys before purchasing the boat. Survey rates can get a little expensive, and some surveyors may have a minimum cost, so make sure you shop around when looking for marine surveys.
Buying a boat is a long process and your seller should be able to answer all of your questions. Look at boat dealers who’ve been around a long time. A good place to find a wide variety of boat dealers is a boat show. Boat shows have boat dealers from everywhere looking to show off their goods. The later in the season, the lower the prices drop and the better deal you can get.
Look for dealers you may have heard about. Focus on the ones your friends have told you about. Don’t get confused with the dealer versus the brand. Just because the manufacturer has been around for 50 years, doesn’t mean the dealer has.