Tips on Buying NEW bass boats

[pikeman32]

I've owned several boats in the past but have always bought them in full with cash. Always have issues with them and I'm tired of being scared of making big runs or fishing big water in bigger tournaments. Looking to finance a new boat. Looking for any tips for boat financing such as down payment requirements, best finance options, or anything information like that. 

[A-Jay]

Sounds like in advance of discussing boat financing, down payment requirements, best finance options, or any information like that, it may be in your best interest to research exactly what type/size rig will suit your needs. 

How one pays for it rarely has any bearing on whether it's adequate or not. 

Once that's taken care of, it could be time to pay for it.

Generally, each boat brand / manufacture may offer different payment options which can often change a time or two during the year.

You may need to visit a dealer to get the most up to date & accurate pricing. 

Good Luck.

A-Jay

[Jig Man]

Generally they are going to want 20% down.  If you have a local bank or credit union, I suggest you start there.  Your past records, credit score, and ability to make the payments on time will have a bearing on the interest rate and length of the loan.  I used to work with 20 banks securing boat loans for customers.  They had a wide range of rates and lengths.

 

If you can secure your own loan you can save lots of money that would go for finders fees.

[NavyVet1204]

I’m definitely in on this one! My wife actually suggested that we get a new boat today and I’m curious as well. 

[Shimano_1]

Reclending is ur friend if u dont have a local credit union or anything you can go through.  Definitely a big purchase and worth some research and planning depending of course on ones financial situation.  Hated financing my aluminum triton but was basically in the same boat. Had had several but most were considerably older. For the most part they were reliable but did have a couple instances i was left stranded. The peace of mind is priceless if you're on the water a lot. It would be hard to go back after running a new 4 stroke for a cple years. It may break down tomorrow but I'm confident in it and its under warranty if it does.

[Logan S]

Most lenders will only give you the lowest rates on long terms...So long terms are almost 'standard' now to get the best rate.  Plan for this and figure out what your payments need to be to get it paid off in whatever term you want (and so you don't spend extra on interest).  Getting the lowest rate should be the #1 priority and that usually means a long term (15 years is the norm it seems).  

 

Unfortunately, a 'good' rate on a boat loan is usually a bit higher than what you might expect for a car loan...Good to know this going in.

 

Some dealers also tack on freight, prep, or rigging charges...Ask about these early in the process.  

 

Don't forget about tax on the boat and the trailer....It's a significant additional expense that many don't remember until the very end. 

 

Good luck, hope you find a great new ride!  It can be a pain sorting all the financing stuff out but the piece of mind with a new rig and a long warranty is worth it .  

[jbsoonerfan]

23 minutes ago, Logan S said:

Most lenders will only give you the lowest rates on long terms...So long terms are almost 'standard' now to get the best rate.  Plan for this and figure out what your payments need to be to get it paid off in whatever term you want (and so you don't spend extra on interest).  Getting the lowest rate should be the #1 priority and that usually means a long term (15 years is the norm it seems).  

 

Are you sure about this??? Usually a lender will give a lower rate on the shorter term note because they are not taking as big of a risk. My wife is in the market for a new vehicle and every lender we have talked to has had a lower interest rate on the shorter term note. Same goes with home loans as well.

[Logan S]

29 minutes ago, jbsoonerfan said:

Are you sure about this??? Usually a lender will give a lower rate on the shorter term note because they are not taking as big of a risk. My wife is in the market for a new vehicle and every lender we have talked to has had a lower interest rate on the shorter term note. Same goes with home loans as well.

For boats, yes...At least in my experience on my last two boats and several friends who went thru the process as well.  Boats are 'toys' and I think they want you for as long as possible...

 

I'm sure there are all kinds of different scenarios out there though...So bound to be exceptions. 

[Glenn]

5 hours ago, Jig Man said:

Generally they are going to want 20% down.  If you have a local bank or credit union, I suggest you start there. 

^^ That's pure gold right there^^

 

OH if you can wait for a few more days, I have a video coming out that goes into GREAT DETAIL about this, including the tip above (spoiler alert!).  It will debut Monday morning.

[jbsoonerfan]

12 minutes ago, Logan S said:

For boats, yes...At least in my experience on my last two boats and several friends who went thru the process as well.  Boats are 'toys' and I think they want you for as long as possible...

 

I'm sure there are all kinds of different scenarios out there though...So bound to be exceptions. 

https://www.essexcredit.com/home/boat/rates/ 

 

This says boat rates also go up with term. I have NEVER heard of an interest rate getting lower as the term increases. 

[Logan S]

11 minutes ago, jbsoonerfan said:

https://www.essexcredit.com/home/boat/rates/ 

 

This says boat rates also go up with term. I have NEVER heard of an interest rate getting lower as the term increases. 

OK.  One of the reasons I said "most" and "usually" instead of an absolute...There's bound to be exceptions. Could have changed since 2018 too I guess.  

 

I've financed two boats and both times the rate was lower for longer terms.  Have several friends with the same experience.  These are real world experiences.  Have you financed a boat?  What was your experience with the rates if so?

 

I guess to be more accurate I'd change my advice to, "The lowest rate might be on a longer term so look for that option."

[jbsoonerfan]

1 minute ago, Logan S said:

OK.  One of the reasons I said "most" and "usually" instead of an absolute...There's bound to be exceptions. Could have changed since 2018 too I guess.  

 

I've financed two boats and both times the rate was lower for longer terms.  Have several friends with the same experience.  These are real world experiences.  Have you financed a boat?  What was your experience with the rates if so?

 

I guess to be more accurate I'd change my advice to, "The lowest rate might be on a longer term so look for that option."

 

Most and usually is absolutely wrong in this instance. I have financed 4 houses, more vehicles than I can remember and a boat. The lowest rate is ALWAYS on the shorter note. 

 

I am willing to bet everyone else has the same experience as me, aside from you. 

[Logan S]

10 minutes ago, jbsoonerfan said:

 

Most and usually is absolutely wrong in this instance. I have financed 4 houses, more vehicles than I can remember and a boat. The lowest rate is ALWAYS on the shorter note. 

 

I am willing to bet everyone else has the same experience as me, aside from you. 

Cool, I agree on houses and cars...I've done those too.  

 

If I'm wrong on the how common this is that's OK, it was based in my actual experience and seemed to be generally accepted in my circle of boat owning friends.  I thought it was decent advice but if not, it's worth what you paid for it

 

My rates for both boats were from USAA which is a fairly substantial national lender and the rates were their published ones, not just for me...So I'm not alone.  

 

The point was to get the lowest rate.  I think that's been hammered home. 

[CountryboyinDC]

I have never financed a boat for sure and have taken out only 4 (soon to be 5) loans in my life, but I do research things to try to save as much as possible.  For example, when we bought our last car, we looked into financing to see if we could get an incentive which would make the car loan cheaper (in terms of rate) than what our mortgage was.  In that case no, so we just paid cash for the car and continued paying the mortgage.

I think that it's possible that there are instances where your experience could match that of @Logan S or @jbsoonerfan.  While logic would have it that the lender will give you the best rate based on the common perception of risks (shorter length and higher down payment equal lower rate), but that is way oversimplifying things.  I've learned this from listening to a few finance and banker types at gatherings I attend (as long as beer and food is provided and there's chores at home, subjects like these seem fascinating).  There are some loans that you'll find that conform to a set of rules, like conforming mortgages (mortgages that are likely bought by Fannie or Freddie).  Most are a matter of trial and error or telling your lender what it is you're after if that lender wants your business.  The rate is the primary thing people concern themselves with, but there other things to concern oneself with.  For esamplenl I've always been concerned about is early payoff penalties.  These and other terms can make a loan much more expensive to you.  Also, rather than focus exclusively on APR, actually look at the amortization tables and see what the overall loan increases as you add years to the terms.  Most are surprised by what they find.  And lastly, don't go broke buying a boat.  Go broke doing something for which you're not the principle recipient of joy, like paying your kid's tuition, building an in-law suite so your in-laws can feel comfortable when they visit, or for that timeshare at the place that you can't wait to leave the end of your vacation.  If you go broke buying a boat, you're never going to hear the end of it.

[Jig Man]

I’ve seen all kinds of rates and lengths.  Rates were generally dependent on the customers credit rating and credit record.

 

 I would advise against anyone getting a 15 year boat loan.  You will be upside down from day one and your interest may be larger than your principal for years.  Download a amortization schedule and run the numbers before you sign on the dotted line.
 

I can’t tell you how many people came in to put boats on consignment that were way upside down and just wanted out.

[A-Jay]

Some great advice offered here.

Looking forward to @Glenn newest video on the subject as well.

 

And while I'd never advocate irresponsible financial decisions,

perhaps consider that life is short & tomorrow is not guaranteed to any of us.

In light of the news we received today regarding a recently passed BR forum member;

Go & Get what makes you happy while you're in a position to enjoy it.

Stay Safe.

A-Jay

 

[gim]

51 minutes ago, Jig Man said:

I would advise against anyone getting a 15 year boat loan.  

 

I would advise against even going with a 10 year loan too.  A 5 year loan is about the longest I would consider personally

[stk44]

8 hours ago, jbsoonerfan said:

 

Most and usually is absolutely wrong in this instance. I have financed 4 houses, more vehicles than I can remember and a boat. The lowest rate is ALWAYS on the shorter note. 

 

I am willing to bet everyone else has the same experience as me, aside from you. 

Dealers may receive incentives for arranging your loan terms and, to take advantage of the folks that need a specific monthly payment, they can lower the rates while inflating the price by adding profitable items that you may not need/want. But yes, as risk increases, so does the interest rate. 
 

This may sound basic, but Interest rates are only as good as the price you are able to secure, and a price is only as good as the interest rate you can lock in.
 

What gets really tricky with different loan terms is that while one might save you interest by paying more up front, what could you have done with that money otherwise? Invest it over the same period of time to achieve a higher rate of return? Would you have done nothing with it? 
 

My advice to @pikeman32would be to run a few “what-if” scenarios to see what rates are first, and then figure out what TOTAL PRICE he can or wants to afford, and finally  focus on the loan term to figure out his monthly payments. And most importantly, DONT TELL THE DEALER WHAT MONTHLY PAYMENTS YOU CAN AFFORD—YOUR GOAL SHOULD BE TO GET THE TOTAL PRICE AS LOW AS POSSIBLE. 

Personally, once I am able to secure the best price, I would put as much cash down as I can and get the shortest loan I can reasonably afford. 

 

[Kletust]

1 hour ago, Jig Man said:

I’ve seen all kinds of rates and lengths.  Rates were generally dependent on the customers credit rating and credit record.

 

 I would advise against anyone getting a 15 year boat loan.  You will be upside down from day one and your interest may be larger than your principal for years.  Download a amortization schedule and run the numbers before you sign on the dotted line.
 

I can’t tell you how many people came in to put boats on consignment that were way upside down and just wanted out.

 

In general terms you are absolutely correct.  That doesn't mean that there aren't some benefits to a longer term for people who are diligent and consistent in following a plan.  Depending on interest rates, it might make sense to get a 15 yr loan but pay the payments as if it's a 5-7 year loan.  At least in this scenario you have the option to pay a lower payment when needed if there is an emergency, etc.  With that said... there aren't alot of people out there with the self control to pay the higher payment on a consistent basis.

[J Francho]

I don't think it's as cut and dry with regards to loans as the conventional wisdom says.  There were incentives in place when I last priced out a boat that did put the interest rate a little lower on a longer term.  The boat I was looking at would has a resale over $50k after 15 years, though.  That might change your perspective.  To me, I am comparing it to waterfront real estate.  Might not sound like two are comparable, since one depreciates quickly, the other only appreciates.  But those are two paths for my family, and it's about what I want to do right now.  In that case, the longer loan is attractive and there's always the option to pay off early.  A simple bass boat is something I've always just paid cash for, so the loan thing is a new concept.  The other end of the spectrum, a six-figure bass boat would be a different story.  The advice to sweat the details like motor, interior options, trailer options, and accessories like shallow water anchors and trolling motors is sound.  I never thought I'd want a dual console boat, but once I had one, I'll never go back.  Believe it or not, trailers seem like a simple choice, but after hauling boats up and down the east coast, there a few must haves.  Tandem axles is one.  All my boats except one have run the max power.  The one that was underpowered was upgraded the second year.  Trolling motors, graphs and other things become obsolete rather quickly, do not add anything to resale, so I would not want to be paying interest on any of it.  Boat, motor, trailer.

[stk44]

18 minutes ago, Kletust said:

 

In general terms you are absolutely correct.  That doesn't mean that there aren't some benefits to a longer term for people who are diligent and consistent in following a plan.  Depending on interest rates, it might make sense to get a 15 yr loan but pay the payments as if it's a 5-7 year loan.  At least in this scenario you have the option to pay a lower payment when needed if there is an emergency, etc.  With that said... there aren't alot of people out there with the self control to pay the higher payment on a consistent basis.

Exactly right. That is where the short-term penalty that 

@CountryboyinDC mentioned comes into play. In the absence of such a penalty I’ve done longer term loans to receive X incentive, and then just paid it off under the terms that I decide on by building an amortization schedule. 
 

[12poundbass]

10 hours ago, A-Jay said:

In light of the news we received today regarding a recently passed BR forum member;

Go & Get what makes you happy while you're in a position to enjoy it.

Stay Safe.

He had bought his new Vexus and enjoyed the hell out of it over the last year, at the end of the day that’s what matters. 

[TOXIC]

Lots of information to digest for you but let me tell you what really sucks......buying that new boat on credit and making the payments while it sits in the shop.  Just because it’s new doesn’t mean it will be trouble free.  Personally, I have financed my boats but I prefer one a little older with average hours and all the bugs already worked out.  I grenaded a lower unit to the tune of $4,000 replacement and it could have happened on a brand new boat just as easily.  Instead my boat is paid off and while it still stung, at least I didn’t have to make a payment as well. 

[stk44]

3 hours ago, TOXIC said:

Lots of information to digest for you but let me tell you what really sucks......buying that new boat on credit and making the payments while it sits in the shop.  Just because it’s new doesn’t mean it will be trouble free.  Personally, I have financed my boats but I prefer one a little older with average hours and all the bugs already worked out.  I grenaded a lower unit to the tune of $4,000 replacement and it could have happened on a brand new boat just as easily.  Instead my boat is paid off and while it still stung, at least I didn’t have to make a payment as well. 

I have been in the  “I’m going to buy a boat next year” market for about 3 years now, so you caught my attention with the lower unit comment. So I must ask— does insurance cover that?

[J Francho]

14 hours ago, stk44 said:

So I must ask— does insurance cover that?

It depends on how it grenaded.  Insurance usually covers accidents and liability.  Mechanical failure would be a warrantee fix on a new boat.