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Boat Buying 101

09.01.22

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.

The Right Boat for You

Before you run out and buy the nice shiny boat with the big motor, ask yourself the following questions:

  • What kind of activities do you want the boat for?
  • How many people will be in the boat with you?
  • Do you have a place to store the boat?
  • How will you transport it?

Once you know these basic questions you can start looking for the boat you want. 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.

New or Used – What You Want VS What You Can Afford

Let’s face it, who doesn’t want a new boat? But, unless you are in a position to purchase it outright, it may not be an option. 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 to write stories 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 been fixed. You’re not as worried if your boat gets a little ding compared to a new boat. Also, you may find that this boat is too small or too large and it’ll be easier to part with if you decide to go after a different boat.

Other Considerations

Whether you’ve decided on a new or used boat, there are other costs to consider as well. You paid the upfront cost for the boat, either out of your bank account or through financing, but that is only the first financial hurdle. Before buying a boat you’ll also want to look at:

  • Insurance
  • Registration and licensing costs
  • Taxes
  • Storage costs
  • Accessories – electronics to safety equipment
  • Maintenance and fuel costs

As you can see, there are a lot of other costs associated with purchasing a boat, so make sure you talk to your financial institution so you can plan for current and long-range financial obligations.

Boat Financing

You’ve found the boat you want and now you must find the financing. Believe it or not, boats are not as expensive as you may think. The three most common options for financing include:

  1. A loan from your bank – By taking out equity in your home you have a chance to get a great interest rate, but it typically takes longer and requires a lot of extra paperwork.
  2. Going through the boat dealership – They do boat loans all the time and will have several lenders lined up to meet your credit needs. They want to close the sale quickly and can typically have everything complete before you know it.
  3. Borrowing from a marine financing specialist – They are specialists in marine financing and may be able to get lower interest, longer terms or lower monthly payments.

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.

Are Marine Surveys Necessary?

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:

  • Condition
  • Insurance
  • Appraisal
  • Damage
  • and new yacht

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.

Boat Buying

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 are at boat shows like the Newport International 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.