Financing a boat

Discussion in 'Boats, Motors, Trailers and Towing Rigs Forum' started by kaelc, Aug 31, 2017.

  1. kaelc

    kaelc Well-Known Member

    So just browsing dream boats and saw this little quote for financing. "Financing available with rates as low as 6.29% to 10 years and 6.79% up to 15 years"

    If you had 25% down on the boat it looks one would pay about $48,500 in interest. Not to mention the cost of ownership!

    What are most people doing, using a house line of credit to finance boats? It looks like they come in at about 3.5-4%?

    Any great home equity lines of credit out available these days? What banks or lenders. I'm thinking two years max of financing as the cost of owning a boat will always go up with repairs. I have two footitis but dam well not going for anything as expensive as the Stabicraft!
  2. ryanb

    ryanb Active Member

    Most banks are offering around a 3ish percent HELOC these days. Interest only payments you can pay that boat back forever... Just kidding... But seriously some people are doing that these days.
  3. cracked_ribs

    cracked_ribs Well-Known Member

    I think both Scotiabank and RBC offered me HELOCs when I bought my island place, although I didn't end up doing that. I would think most major banks would give you similar options; I personally ended up taking out a non-HE loan through RBC and they were pretty flexible.

    Locally I think the high-dollar boats are going to 3 types of people:

    1) 70% offshore buyers, whether they've got Canadian passports or not
    2) 29% HELOC owners of Victoria or Vancouver homes using cheap interest rates to finance expensive toys
    3) 1% successful local business owners

    I congratulate category 3, caution category 2 to enjoy but be careful, and have no comment I wish to make about group 1.

    I would sure love that Stabby-Craft, though. That's the "they've shut down BC Ferries, but I still need to cross the strait to hit Thrasher Rock today" edition, I believe.
    kaelc and Alex_c like this.
  4. Damien

    Damien Active Member

    I have been in banking/finance for 25 years. Including years as a regional manager of retail 'indirect' lending (Auto, RV, Marine) for one of the big 5.

    There is a lot of nuance, and no one knows what is right for you. Look at options and go with what is right for you. Here are some;

    Cheapest = home equity loan or line of credit. You effectively pay 'mortgage rates' for your boat loan. If it is a line of credit, the potential is there to be on the 'never never' plan on interest only payments. You need to be diligent and set up an auto payment plan to hammer down the principle. You can effectively do this by setting up the boat loan as a secured 2nd mortgage segment. Separate from your principle mortgage, and on its own declining balance term basis.

    If you don't have enough equity for a home equity secured lending instrument;

    Most Expensive = is usually buy here, pay here, walk into the boat dealer with your downpayment. Negotiate your price. Arrange financing on the spot. I'm not sure what the rates are at the dealer level, but I could let you know. Probably 4-7% depending on amount borrowed and term. The dealer receives a kick back known as a 'reserve' for placing the loan to one of their partner banks and credit unions. They effectively earn more than letting you pay with cash. So when people go into a boat, rv or car dealer, saying "what is the cash price", the dealer earns less on the sale of that unit than if the financing was outsourced. Further, the "Finance and Insurance Manager" or "Business Manager" doesn't get the same crack at sitting you down and trying to upsell warranty, coatings, loan insurance, etchings, anti-heft systems etc etc.

    Edit - just saw your link. That boat won't be financed as it isn't in Canada, its likely too old for traditional major bank financing (niche lenders exist). Your very best bet is to use home equity, either as a mortgage segment or HELOC. Good luck.
    kaelc likes this.
  5. Fishtofino

    Fishtofino Well-Known Member

    I would never finance a boat. If you can't afford to buy it....don't
  6. Damien

    Damien Active Member

    Pretty myopic point of view.
    baddogg likes this.
  7. Alex_c

    Alex_c Active Member

    Owning a boat is already a huge financial liability. As we all know, maintenance is ongoing and even if you do it yourself, parts are still expensive. I don't know why you'd pay all that interest on something that depreciates like crazy (aluminum boats seem to fair a bit better) and costs an arm and a leg to run. How many people finance boats and then take a bath on payments while they rot because they can't afford repairs? Probably a lot.
  8. Damien

    Damien Active Member

    How many people put repairs, equipment, maintenance for an older boat on their credit card at 10-20% interest. But hey, they bought the boat itself with 'cash'.

    Everything a balance. End of the day, boats are not rational. Somewhere near the top of Maslow's hierarchy. It's all about how much you want to bite off, like almost anything else in life.
  9. triplenickel

    triplenickel Well-Known Member

    When I'm out trolling in the fleet around CR, or even driving around town looking at all the $100K + boats I always think no wonder the banks are constantly setting records.
    Rubble likes this.
  10. walleyes

    walleyes Well-Known Member

    Personley I don't see anything wrong with a person buying/ financing a new boat if thats where their priorities are. If they feel they have a steady job and decent income and they are comfortable with it good on em. A lot of people in their mid life have mortgages paid off and very little if no payments at all. Theres nothing wrong with putting a new boat on 10-15 years even. There's no reason a new boat either glass or aluminium can't last a person 20+ years. When buying a new or next to new boat there is very little up keep. I bought my boat new in '06 and other than fuel and a set of new bunk carpet and I did the wheel bearings myself this summer I have had 0 dollars that I had to put into it. Not spark plugs no trailer repairs 0. And unlike many people out there think we in Alberta get a lot of time in our boats as well, I live in the land of lakes and we put in the hrs on our machines. If it's what a person wants then go for it. We only live once why go through life saying shoulda coulda just say been there done that, with in reason of course. People think nothing of seeing people drive around with 35' fifth wheels and a new diesel pulling it yet when they see a guy with a $150,000 boat they freak,, where ever your priorities are. Personally I haven't decided yet which way I am going in a couple years, new or darn close to it. Personely I think I will let the first guy take the hit on depreciation and grab one a couple years old. I have a problem with a home line of credit do to the fact you are using your home as collateral, so depending on your situation, I would stay away from them. Take it as a straight loan and make extra payments to save on interest, but that's just me. Try and have at least 25% down and go for it. You only live once, enjoy it as you will.
  11. gunnerlove

    gunnerlove Active Member

    11 years without maintenance sounds like a great way to build a time bomb.
    Fishtofino likes this.
  12. walleyes

    walleyes Well-Known Member

    As in what way. There has been nothing to do to it. Changed leg oil every season but that's pennies really, changed oil in the hubs every season again pennies, change oil in the 4 stroke kicker pennies. The main is an ETec, runs as well as it did the day it was bought. Took it in for its scheduled 300hr warranty check at the required time some 7 or 8 years ago, nothing done to it, it got a clean bill of health. Wash it, clean it take care of your stuff and don't abuse it and it will take care of you.

    PS. Im an equipment man all my life, just about every type of heavy equipment you can emagine I'm all to aware of the importance of equipment matanace but you also don't fix whats not broke.
    bMcN, baddogg and willydw like this.
  13. Fins -n- Skins

    Fins -n- Skins Well-Known Member

    Boats,cars,trucks, rv's quads, motorcycles etc etc. Toys to play with. It's called living !! If you wait to long to have something you will be dead !! How much fun is that. Go buy it as my buddies say.
    walleyes likes this.
  14. Chuck

    Chuck Active Member

    Everybody should be able to enjoy boats, quads, trailers etc... but when we are financing all these toys it sure can put us in a bad spot, and if things go sideways and they always do it's a real slippery slope. Hate to see that happen to people just trying to enjoy life!!
  15. walleyes

    walleyes Well-Known Member

    Oh a person has to watch themselves for sure, people can get caught up in the finance world for sure. But like I mentioned if a person can reasonably afford it and it's important to you, don't feel bad for doing it. But your right lots of people get in a bad way and have to wave bye, bye to their toys if they don't watch.
    Another thing to think about which is the position I am in. I am at the age I am looking at semi retiring in the next 8 years or so and just work winters. (Busier time in the oilfield) I would like to have my toys bought and paid for by then so a person doesn't feel or he doesn't have to keep working, have the toys in place and paid for. Hence the reason of buying new or next to new, get something that will last you till your done playing.

    Just stuff to think about.
  16. SpringVelocity

    SpringVelocity Well-Known Member

    Can I finance this. No ideas on this one it just looks bad ass for aluminum. I can imagine that is steep payment per month for this tuna mobile.

  17. Fisherman Rob

    Fisherman Rob Well-Known Member

    Totally off topic, but why did Evenrude put the cooling pee on the G2 directly behind the engine where you can't see it when under way?
  18. trophywife

    trophywife Well-Known Member

    sold my landcruiser, camper, old boat, snow boards, mountain bikes , guns, etc, all the other hobbies that were taking away from me reaching my goal. then used a house line of credit and paid off the balance as soon as i could.

    focused hobbie.
    kaelc likes this.
  19. Newf

    Newf Active Member

    The best piece of advice I got when I was buying my boat was to truly consider what I would be using it for and then go buy the boat that I could afford to "use" and not the boat I could afford to buy. Big difference, as too many really nice but expensive boats stay in the driveway or marinas because the owner can't afford to use it. Be reasonable with what your needs are and then enjoy every day you can get it out on the water.
    RogersonCrusoe likes this.
  20. ExFlyGuy

    ExFlyGuy Well-Known Member

    I believe they come with a water pressure gauge for the dash so there is no need to look out the back.
    seahorse likes this.

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