SWFL21 Posted May 5, 2020 Report Share Posted May 5, 2020 Hey folks, hopefully this is the right place to ask... Without getting too personal, id appreciate knowing how you guys bought your boats. I have never financed anything so I am trying to understand the process for used boats. Through the next few months I will be in a position to buy, looking in the direction of a 22/24 pathfinder. I think I could justify a 40-50k price tag as of now. Questions for you... I will 99% be shopping in the used market... How do you work with the seller (assuming its a private seller) and a bank to close the deal? For example, I travel a couple hundred miles away to find a boat, boat checks out and I make seller an offer - will I then talk bank and get the loan? I can see how this could be a multi-day process... I also plan on communicating with a few banks beforehand to get an idea of the best rates... What is the average length of a boat loan? Kinda relative to the price of the boat... but it seems as if car loans are much shorter (according to the online calculator things) 3-5yrs vs 5-20yrs Being that it will most likely be a used boat from a private seller, are there any recommended inspectors? I got bit big time on my last purchase (21' MA) because I had an untrained eye... I definitely know more now, but would still like the second opinion. I am sure I will have more questions along the way, but I like to get my brain gears turning. Cheers (and stay healthy) Quote Link to comment Share on other sites More sharing options...
mulligan Posted May 5, 2020 Report Share Posted May 5, 2020 I am no expert by any means. I have never financed anything not even a credit card until my last boat purchased and only did so to get credit as without financing any purchase i had no credit. I had 3 basic options, boat loan, personal loan, and secured loan. The boat loan at the time had stupid high interest, probably could have gotten a credit card for less interest and a personal loan was not to far behind the boat loan. So a secured personal loan was the answer for me. Quote Link to comment Share on other sites More sharing options...
Wanaflatsfish Posted May 5, 2020 Report Share Posted May 5, 2020 1 hour ago, SWFL21 said: I think I could justify a 40-50k price tag as of now. That's a fairly nice boat for that price range... 1.) i would contact all the MPH dealers within 500 miles, speak to the GM / Owner and let them know you are in the market 2.) They will know who might be wanting to upgrade with a trade 3.) The dealers will have used boat financing available - you can have your boat inspected by a Marine Surveyor of choice, have the dealer run an engine check the other route is standard boat loan through bank, etc. they will normally require a min of 20-25% down...and will not finance anything over 5 years old. Final, is as you mentioned, get a home equity loan, if you can, interest rates are silly low and you have your cash in hand, and negotiate the deal. Regarding driving up and seeing....if you find a boat, have a marine surveyor do a look prior to driving...worth every $ prior to making the adjustment. DC Quote Link to comment Share on other sites More sharing options...
SWFL21 Posted May 5, 2020 Author Report Share Posted May 5, 2020 8 minutes ago, Wanaflatsfish said: That's a fairly nice boat for that price range... 1.) i would contact all the MPH dealers within 500 miles, speak to the GM / Owner and let them know you are in the market 2.) They will know who might be wanting to upgrade with a trade 3.) The dealers will have used boat financing available - you can have your boat inspected by a Marine Surveyor of choice, have the dealer run an engine check the other route is standard boat loan through bank, etc. they will normally require a min of 20-25% down...and will not finance anything over 5 years old. Final, is as you mentioned, get a home equity loan, if you can, interest rates are silly low and you have your cash in hand, and negotiate the deal. Regarding driving up and seeing....if you find a boat, have a marine surveyor do a look prior to driving...worth every $ prior to making the adjustment. DC Interesting point about not financing anything over 5 years old, didnt think about that... for my uneducated brain, how would you buy something in the 10-12yr old range without paying in full? Ive been scanning boat trader for the past few weeks trying to figure out what year hulls id be looking at due to cost and it seems like an 07' would be the oldest hull, followed by throwing some $$ ontop of it to make it what I want - tower/TM/updated electronics. Quote Link to comment Share on other sites More sharing options...
BradM Posted May 5, 2020 Report Share Posted May 5, 2020 Shop local credit unions for their rates too. Assuming you have great credit score, you can become a member by simply opening a checking account and secure a loan all in the same visit ( I did one on a lunch hour). Try to get a pre-approved so you know how much money you have available to secure your new boat. The process can take a little time if you see the boat late Sat. and you can't get back to the bank until Monday AM. Those are the times when a deposit comes into play. Keep a written receipt, signed by both parties with minimum but detailed info; monies exchanged and the term/expectation of holding the asset until you return with the balance. I've bought and sold a lot of boats over the years and have been fortunate enough to deal with honest folks, and returning the same honesty. Keep in mind when you go to register your new to you boat (if you're in FL) you only pay taxes on the value of the hull. Make sure you have an itemized receipt deducting the value of the outboard, electronics, trolling motor, trailer etc., when you go to the D.M.V. This can save you a lot of money! Don't be afraid to look at new boat, the term (while not always ideal) can be 15-20 years which can return a low payment. Be disciplined in your decision and pay extra on the loan every time you can. Make sure there isn't a penalty or maximum you can pay on the note though; pay it off inside of 5 years if you can. One other thing, keep some of your cash fluid, don't tie it all up in the initial loan/deposit. You'll want to save it for a rainy day or unforeseen expenses. Good luck! Quote Link to comment Share on other sites More sharing options...
whichwaysup Posted May 5, 2020 Report Share Posted May 5, 2020 So, a thought for you to consider. 1) Take a step back and consider two opposing dynamics: What will the bank loan you money on vs. What should you spend money on? I point this out because sometimes the intersection of those two can be the sweet spot. For example, if you buy a new boat, financing is relatively easy - and down payment can even be negligible. However, a new boat is going to have a very very steep depreciation curve, which means, you end up upside down in a hurry. Nobody buys a new boat planning on selling it immediately, but life happens, and right now, life is definitely happening to a lot of people. On the other hand, financing a 5-10 year old boat is tough, big down payment required if you can find the financing at all. But, your depreciation curve at that point is much flatter, so assuming you don't buy a lemon, you can get back out of it pretty easily. 2) My dad always gave me great advice - don't buy what you can't buy in cash. I know, that stinks. I'd like to have a newer boat, but I can't do that without getting a loan, and well, turns out my dad was right. You want a nightmare scenario? It isn't buying a boat that is a lemon that you have to dump. It's financing a lemon that you have to dump . . . and then continue making payments on. There's probably a compromise somewhere that says "finance as little as you can possibly finance, and never more than 50%" but I'm avoiding that slippery slope, because I get greedy. 3) Don't fall into the trap of letting the bank determine what you will borrow. I was a banker a long long time ago and had customers come in and as ME how much house they could afford. If I advised them based on what the bank would allow, I would have absolutely destined them for trouble. Everyone hates banks for not being willing to lend them money. I've seen the other side of it. Banks may not lend you what you want, but I guarantee you, they will lend you more than is good for you. Sit down, figure out what you are able to pay per month, then assume that you lost your job tomorrow, then assume it will take you 6 months to find a replacement job at the same income. Then you will know what payment you can afford. Alternatively, going back to sitting down and figuring out the absolute maximum you think that you can pay per month now, start paying yourself that every month and see how long that's fun. When it stops being fun, go buy a boat in cash with what you just saved up. I know, I'm a debbie downer here, but at least consider this. Not sure what the situation is with that 99 21 MA, but having gone through some recent massive repairs, it may also be worth exploring a full fix of it and comparing that cost to the cost of a financed pathy. I've found with my MA repair that, although I ended up paying WAAAAAAYYYYY more than I ever dreamed I would, I was able to do it in small amounts over time . . . without a loan. I was also shocked to realize later, that because I bought the boat at a point where it's depreciation curve was flat and the economy improved, I could now sell it for every penny I have in it - and I ended up with exactly the boat I always wanted. Happy to talk to you about your situation offline and share my learnings if it helps. 1 Quote Link to comment Share on other sites More sharing options...
SWFL21 Posted May 5, 2020 Author Report Share Posted May 5, 2020 3 hours ago, BradM said: Shop local credit unions for their rates too. Assuming you have great credit score, you can become a member by simply opening a checking account and secure a loan all in the same visit ( I did one on a lunch hour). Try to get a pre-approved so you know how much money you have available to secure your new boat. The process can take a little time if you see the boat late Sat. and you can't get back to the bank until Monday AM. Those are the times when a deposit comes into play. Keep a written receipt, signed by both parties with minimum but detailed info; monies exchanged and the term/expectation of holding the asset until you return with the balance. I've bought and sold a lot of boats over the years and have been fortunate enough to deal with honest folks, and returning the same honesty. Keep in mind when you go to register your new to you boat (if you're in FL) you only pay taxes on the value of the hull. Make sure you have an itemized receipt deducting the value of the outboard, electronics, trolling motor, trailer etc., when you go to the D.M.V. This can save you a lot of money! Don't be afraid to look at new boat, the term (while not always ideal) can be 15-20 years which can return a low payment. Be disciplined in your decision and pay extra on the loan every time you can. Make sure there isn't a penalty or maximum you can pay on the note though; pay it off inside of 5 years if you can. One other thing, keep some of your cash fluid, don't tie it all up in the initial loan/deposit. You'll want to save it for a rainy day or unforeseen expenses. Good luck! Regarding the DMV, how would you itemize something like a used boat? I could list prices for everything - probably quite accurately too! But who knows if the DMV would accept it... I do like the thought of buying new with a long term and paying it off in a short amount of time, but I know that will just lead me to spending more than necessary And I am DEFINITELY going to be sure that I keep some cash fluid. It *** having a nice toy and an empty gas tank 1 hour ago, whichwaysup said: So, a thought for you to consider. 1) Take a step back and consider two opposing dynamics: What will the bank loan you money on vs. What should you spend money on? I point this out because sometimes the intersection of those two can be the sweet spot. For example, if you buy a new boat, financing is relatively easy - and down payment can even be negligible. However, a new boat is going to have a very very steep depreciation curve, which means, you end up upside down in a hurry. Nobody buys a new boat planning on selling it immediately, but life happens, and right now, life is definitely happening to a lot of people. On the other hand, financing a 5-10 year old boat is tough, big down payment required if you can find the financing at all. But, your depreciation curve at that point is much flatter, so assuming you don't buy a lemon, you can get back out of it pretty easily. 2) My dad always gave me great advice - don't buy what you can't buy in cash. I know, that stinks. I'd like to have a newer boat, but I can't do that without getting a loan, and well, turns out my dad was right. You want a nightmare scenario? It isn't buying a boat that is a lemon that you have to dump. It's financing a lemon that you have to dump . . . and then continue making payments on. There's probably a compromise somewhere that says "finance as little as you can possibly finance, and never more than 50%" but I'm avoiding that slippery slope, because I get greedy. 3) Don't fall into the trap of letting the bank determine what you will borrow. I was a banker a long long time ago and had customers come in and as ME how much house they could afford. If I advised them based on what the bank would allow, I would have absolutely destined them for trouble. Everyone hates banks for not being willing to lend them money. I've seen the other side of it. Banks may not lend you what you want, but I guarantee you, they will lend you more than is good for you. Sit down, figure out what you are able to pay per month, then assume that you lost your job tomorrow, then assume it will take you 6 months to find a replacement job at the same income. Then you will know what payment you can afford. Alternatively, going back to sitting down and figuring out the absolute maximum you think that you can pay per month now, start paying yourself that every month and see how long that's fun. When it stops being fun, go buy a boat in cash with what you just saved up. I know, I'm a debbie downer here, but at least consider this. Not sure what the situation is with that 99 21 MA, but having gone through some recent massive repairs, it may also be worth exploring a full fix of it and comparing that cost to the cost of a financed pathy. I've found with my MA repair that, although I ended up paying WAAAAAAYYYYY more than I ever dreamed I would, I was able to do it in small amounts over time . . . without a loan. I was also shocked to realize later, that because I bought the boat at a point where it's depreciation curve was flat and the economy improved, I could now sell it for every penny I have in it - and I ended up with exactly the boat I always wanted. Happy to talk to you about your situation offline and share my learnings if it helps. Really appreciate the long responses. It opens my eyes to what ive just began to scratch the surface on! 1 - Part of my reasoning for looking at a new-to-me boat is that I may be able to snag a deal on someone trying to get rid of theirs due to this pandemic stuff going on. Not fully basing the choice off that, but if I can get a nice ride for a nice price... hard to say no! 2 - my dad has said the exact same thing. Im just a young & dumb 26 year old and really do appreciate every person that tells me to not spend more than I can afford. Handful of my highschool and college friends that are hugely in debt because of those little plastic cards with infinite money on them. Ive spent a portion of the day (nothing better to do with my time in lockdown) making a budget, mapping out how much I can actually spend, and if that meets the type of boat that I want. 3 - Ive never taken out a loan, so what you said is very helpful.. My dad has also said the same thing regarding losing my job and being able to stay floating for the next 6 months. After drawing out a rough budget, its crazy how quickly money can be spoken for just to stay living under a roof! I contemplated keeping the Maverick, but ended up selling it to a local guy who will fix it up well and dandy. It was definitely a bad financial choice buying it in the first place, but in my time of ownership I also realized I would like a bit more of a bay boat layout - thus 22/24 pathy. Still have a little EC Gladesmen that can get super skinny too! Though the thought has definitely crossed my mind of finding a usable fixer upper, buying it in full, and throwing some upgrades to it. Definitely have more gears turning now than I did a few hours ago when I posted this. Keep the suggestions coming! 1 Quote Link to comment Share on other sites More sharing options...
BradM Posted May 6, 2020 Report Share Posted May 6, 2020 Regarding the D.M.V.; the seller of the last used boat I bought (12 years ago) simply hand wrote "Yamaha 115 h.p. value $3,000. Garmin fish finder value $400" , etc. and the hull value less the value of all the add on's. I handed the paper to the teller at the D.M.V. and she only charged me tax on the value of the hull. No big deal, they do it all the time. They're glad to tax you on the full value too. 😉 1 Quote Link to comment Share on other sites More sharing options...
Swfldawg Posted May 6, 2020 Report Share Posted May 6, 2020 Text me and I will send you two contacts I used to buy my 2600. They were awesome and had me ready to go within a week of settling on my pathfinder. 239-297-4598 Quote Link to comment Share on other sites More sharing options...
Wanaflatsfish Posted May 6, 2020 Report Share Posted May 6, 2020 On 5/5/2020 at 6:00 PM, SWFL21 said: Though the thought has definitely crossed my mind of finding a usable fixer upper, buying it in full, and throwing some upgrades to it. this is what I did on my new mistress....a MA17, 1995, cream puff.... if you are looking for a nice pathfinder, you'll find many here, especially on he forum, keep their bay boats in top condition...find someone who is getting out of his bay boat and maybe going larger or smaller, make he offer, and go for it. You can tell 90% of how well someone has taken care of bay boat by the person, the house they own, the condition of the skiff, records of maintenance , etc. if you can find a "stripped down" bay boat, this would be ideal...you want something with at least 50 hours per year of use (maybe a few hours less), but, something that has been used.... get your funds together, and make a reasonable offer...and take her home.... GL with your quest...remember, the chase is sometimes as much fun as the catch dc 1 Quote Link to comment Share on other sites More sharing options...
triplec Posted May 7, 2020 Report Share Posted May 7, 2020 As Brad said credit unions are pretty flexible to work with. Last boat I sold was over 10 years ago but the buy had it worked out in advance through Bank of America and had a "draft note" I think it was and he was pre- approved up to a certain amount for a boat with the year parameters they gave him. We just met at local branch and moved the money via debit cards. I would contact whoever you have a credit relationship with and start there first to see their guidelines. 1 Quote Link to comment Share on other sites More sharing options...
SWFL21 Posted May 7, 2020 Author Report Share Posted May 7, 2020 On 5/6/2020 at 11:06 AM, Swfldawg said: Text me and I will send you two contacts I used to buy my 2600. They were awesome and had me ready to go within a week of settling on my pathfinder. 239-297-4598 Not in the hunt right now, but Ill reach out when I am back in town from work. Should be tail end of July/beginning of August. Thank ya! Quote Link to comment Share on other sites More sharing options...
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