Boat Loans
- Thread starter Mike...
- Start date
Check out Honda Marine (www.hondamarine.com) for their 6.99% rate for boat & motor package.
starcrafttom
Active member
We bought the Susan E with the Honda finance at 4.49% back in 2005. It was the funding that allowed us to get a new boat. They even financed all the added toys like the canvas,raymarine system and downriggers all in one package.
Matt Gurnsey
New member
Just got my care package today in the mail from jennifer at People's Bank-
$30-50K 8.00 %
$50-100K 7.00 %
$100K + 6.75 %
Tridant has similar rates.
Funny how perspective works. I was thinking anything around 8% on a boat was a decent rate.
$30-50K 8.00 %
$50-100K 7.00 %
$100K + 6.75 %
Tridant has similar rates.
Funny how perspective works. I was thinking anything around 8% on a boat was a decent rate.
Hey Mike.
I would normally not offer this as an unsolicited opinion to a stranger, but we are on a public forum and you raised the issue, so here goes: if a few points difference in your interest rate is a "deal killer", should you perhaps consider a less expensive boat or delay your purchase? I mean absolutely no offense by this... it's just that I've seen too many people lately get in over their heads with loan payments and that could really take the fun out of boating. The sad irony of "good credit" is that one needs to borrow regularly to have it! Purchase price in boating, as many on this site will confirm, is only the beginning of a boat owner's expenses. Just a thought from the peanut gallery. Respectfully, Mike.
I would normally not offer this as an unsolicited opinion to a stranger, but we are on a public forum and you raised the issue, so here goes: if a few points difference in your interest rate is a "deal killer", should you perhaps consider a less expensive boat or delay your purchase? I mean absolutely no offense by this... it's just that I've seen too many people lately get in over their heads with loan payments and that could really take the fun out of boating. The sad irony of "good credit" is that one needs to borrow regularly to have it! Purchase price in boating, as many on this site will confirm, is only the beginning of a boat owner's expenses. Just a thought from the peanut gallery. Respectfully, Mike.
Captains Cat
New member
Don't forget that, as a "second home", most boats, if large enough (cooking facilities, head etc), the interest is deductable, as is your home mortgage. That makes a higher interest rate a little more digestable.
Charlie
Charlie
Just for perspective, I took out my old "Comprehensive Mortgage Payment Tables" printed in 1978. This allows you to see what your monthly payment would be at various interests rates and terms. The lowest interest rate shown is 7% and it goes up to 18%.
So, thirty years ago, it never even occurred to anyone that you would be able to borrow money at the rates that we are seeing today. If I remember correctly, 12% for cars or recreational vehicles was the norm for many years.
These present low interest rates may be one of the problems (or at least a symptom), not one of the solutions to our present financial situation. Interesting to me that I could borrow $100,000 for a boat and pay about what overnight interbank rates were a month ago.
Lyle
So, thirty years ago, it never even occurred to anyone that you would be able to borrow money at the rates that we are seeing today. If I remember correctly, 12% for cars or recreational vehicles was the norm for many years.
These present low interest rates may be one of the problems (or at least a symptom), not one of the solutions to our present financial situation. Interesting to me that I could borrow $100,000 for a boat and pay about what overnight interbank rates were a month ago.
Lyle
flrockytop
New member
I have no idea what the current rate might be but you need to check with WEIFINGS. I bought my CD19 from another dealer but WEFINGS arranged the financing. I got a much better deal at the time. (Dec last year.)
WEFINGS (850)670-8100 talk to Charlie
Roger
WEFINGS (850)670-8100 talk to Charlie
Roger
As long as we're discussing loans, etc., a warning might be made to any and all prospective boat owners who finance their purchases.
A common problem has been getting "upside down" in a boat, RV, or other loan.
This is where the purchase price, taxes, licensing finance charges, etc. eventually put the new owner, after some initial depreciation out the door, etc, into a situation where the total amount owed on a boat is greater than it's market value.
This leaves the owner owing more than the boat's worth, and makes selling it quite difficult, as the payoff on the current loan is greater than the fair market value.
You'll see folks unable or unwilling to make the payments and trapped in the situation commonly, some offering their boat plus thousands of dollars for someone to take over their payments and ownership.
The alternative is to default on the loan and suffer the loss of one's credit
rating.
It would seem to me that the possibility of this situation developing would increase with paying a higher than minimal purchase price, higher than minimal interest rate, financing over a longer period, and financing a greater percent of the total purchase price including accessories, add-ons, trailer, etc.
Perhaps one of the boat dealers who understands this situation more fully than I can elaborate more fully on this and/or make any necessary corrections in what I've said with my somewhat limited understanding.
Something else to think about!
Joe. :teeth :thup
A common problem has been getting "upside down" in a boat, RV, or other loan.
This is where the purchase price, taxes, licensing finance charges, etc. eventually put the new owner, after some initial depreciation out the door, etc, into a situation where the total amount owed on a boat is greater than it's market value.
This leaves the owner owing more than the boat's worth, and makes selling it quite difficult, as the payoff on the current loan is greater than the fair market value.
You'll see folks unable or unwilling to make the payments and trapped in the situation commonly, some offering their boat plus thousands of dollars for someone to take over their payments and ownership.
The alternative is to default on the loan and suffer the loss of one's credit
rating.
It would seem to me that the possibility of this situation developing would increase with paying a higher than minimal purchase price, higher than minimal interest rate, financing over a longer period, and financing a greater percent of the total purchase price including accessories, add-ons, trailer, etc.
Perhaps one of the boat dealers who understands this situation more fully than I can elaborate more fully on this and/or make any necessary corrections in what I've said with my somewhat limited understanding.
Something else to think about!
Joe. :teeth :thup
Thanks all for the replies!
The wife and I have discussed it, and we are going to move ahead with getting the loan.
As Charlie pointed out, the interest is tax deductible, and since I plan on taking clients out on it, I may also be able to deduct the costs as a business expense. Who knows.
Mike, I appreciate your thoughts on the matter. In reality, the interest rate is not a deal killer, I just am opposed to paying a lot of interest. It just goes against my grain.
Thanks again all for the advice.
---
Mike
The wife and I have discussed it, and we are going to move ahead with getting the loan.
As Charlie pointed out, the interest is tax deductible, and since I plan on taking clients out on it, I may also be able to deduct the costs as a business expense. Who knows.
Mike, I appreciate your thoughts on the matter. In reality, the interest rate is not a deal killer, I just am opposed to paying a lot of interest. It just goes against my grain.
Thanks again all for the advice.
---
Mike
matt_unique
New member
For what it's worth, when I was rate shopping exactly 1 year ago I found slightly better but similar rates. The lower the loan value the higher the interest rate.
I see that situation several times each year (another one showed up yesterday). Everything you said is right on. I would also add that it's a situation that gets worse with time, especially with newer boats. They depreciate faster than you pay off the loan, so if you have to come up with a few thousand this year to pay off the loan at the sale, next year it will be six thousand.
Our experience has been the opposite of upside down. We purchased our 1990 32' Sundowner Tug in 2003 for $89,000 and sold the boat in 2008 for $90,000 with no major changes/upgrades/etc. If you purchase correctly and keep up on the maintenance, they can work out.
Now that being said, I don't plan on having the same deal with our new 2008 C-Dory 22. Anytime you purchase new, you will take a hit. We'll be fine because of the proceeds from the Tug sale.
Just like everything (real estate, stocks, etc) -- you "make your money" in the purchase transaction, not the sales transaction.
TomRay-
Thanks for the supporting comments! It's always great to hear from a pro!
Robert-
I'm very glad for you that the Sundowner 32 Tug purchase worked out for you!
Smarts are indispensable in the buying process! (As is patience!)
Your final thought-
"Just like everything (real estate, stocks, etc) -- you "make your money" in the purchase transaction, not the sales transaction."
-is something many of us understand intuitively as consumers, buyers and sellers, but a reminder to that effect ought to be printed out, framed, and up on the wall in a conspicuous place right behind one's computer! It's too easy to forget the principle when caught up in the emotion of buying a boat!
Maybe just a "Buy low, sell high." would suffice, if one understands the full implications beyond the obvious stock market applications.
Thanks for the ideas, both of you!
Joe. :teeth :thup
Thanks for the supporting comments! It's always great to hear from a pro!
Robert-
I'm very glad for you that the Sundowner 32 Tug purchase worked out for you!
Smarts are indispensable in the buying process! (As is patience!)
Your final thought-
"Just like everything (real estate, stocks, etc) -- you "make your money" in the purchase transaction, not the sales transaction."
-is something many of us understand intuitively as consumers, buyers and sellers, but a reminder to that effect ought to be printed out, framed, and up on the wall in a conspicuous place right behind one's computer! It's too easy to forget the principle when caught up in the emotion of buying a boat!
Maybe just a "Buy low, sell high." would suffice, if one understands the full implications beyond the obvious stock market applications.
Thanks for the ideas, both of you!
Joe. :teeth :thup
Considering the current financial climate I am amazed that the national lenders are still offering rates as low as 6.75% on loans exceeding $100,000 up to 240 months. The lenders that I use most frequently have actually raised their base rates over 2 percentage points over the past nine months but are now offering "Rate Discounts" for applicants with credit scores over 760 FICO and loan-to-values of less than 90% of Dealer Invoice plus add-ons. Many national and regional lenders have gotten out of the Marine and R/V business entirely; Key Bank, GE Money Bank and Regions among them while others have shut off all but their 25-30% highest volume dealers while telling those that will listen that they are still "Committed to the Industry".
Most independent marine dealers these days "outsource" their financing to servicing companies such as Marker 5 and Essex Credit. These companies make their money charging the customer a higher interest rate than they actually get from the lender. This is normal operating procedure for all auto, marine and R/V dealers as the actual "Lender" remits a portion of the "Spread" to the dealer on a percentage and time-on-the books basis. The difference lies in the vastly larger number of loans that the Servicing Companies process and the discounts that they are allowed because of the same. Another difference in financing arranged by a Servicing Company is that the customer is now often subjected to high-pressure sales tactics by someone that they have never met at the dealership aimed at selling aftermarket products such as Extended Service Contracts and Life and Disability Insurance products.
While I won't say that we don't likewise profit from these products and a percentage of the "Spread" our in-house financing option allows us to offer them to our customers on a "plate of cookies" basis, (want a cookie? No, OK! Yes, which one?) while providing a seamless "one-stop" buying and financing experience that they seem to prefer. And let's face it, considering todays economy a reputable marine dealer has a duty to tap every available profit center in order to maintain his ability to offer service to his customers.
If you are purchasing a boat from a dealer that does indeed outsource their financing make sure you exercise your rights under the Federal Fairness in Lending Act and thoroughly read all of the finance documents before signing them. Make sure that the loan will be serviced by a reputable national or regional lender with a proven payment processing center and not a "Mouse-House" that may or may not process your payment on time even though it arrives at its destination prior to the due date. In addition never purchase ANYTHING from a dealer or lender that so much as hints that the purchase of an Extended Service Contract or Insurance product is required for finance approval. This is not only unscrupulous but also highly illegal.
I welcome the opportunity to answer your financing questions whether or not you are purchasing a boat from our dealership. With over 18 years of experience in both the auto and marine financing arenas, (prime, kinda-prime and sub-prime included) if I don't know the answer I'm sure I know someone that does!
Best Wishes to all for a safe and happy Holiday Season!
Charlie Holtom,
Wefing's Marine, Inc.
Most independent marine dealers these days "outsource" their financing to servicing companies such as Marker 5 and Essex Credit. These companies make their money charging the customer a higher interest rate than they actually get from the lender. This is normal operating procedure for all auto, marine and R/V dealers as the actual "Lender" remits a portion of the "Spread" to the dealer on a percentage and time-on-the books basis. The difference lies in the vastly larger number of loans that the Servicing Companies process and the discounts that they are allowed because of the same. Another difference in financing arranged by a Servicing Company is that the customer is now often subjected to high-pressure sales tactics by someone that they have never met at the dealership aimed at selling aftermarket products such as Extended Service Contracts and Life and Disability Insurance products.
While I won't say that we don't likewise profit from these products and a percentage of the "Spread" our in-house financing option allows us to offer them to our customers on a "plate of cookies" basis, (want a cookie? No, OK! Yes, which one?) while providing a seamless "one-stop" buying and financing experience that they seem to prefer. And let's face it, considering todays economy a reputable marine dealer has a duty to tap every available profit center in order to maintain his ability to offer service to his customers.
If you are purchasing a boat from a dealer that does indeed outsource their financing make sure you exercise your rights under the Federal Fairness in Lending Act and thoroughly read all of the finance documents before signing them. Make sure that the loan will be serviced by a reputable national or regional lender with a proven payment processing center and not a "Mouse-House" that may or may not process your payment on time even though it arrives at its destination prior to the due date. In addition never purchase ANYTHING from a dealer or lender that so much as hints that the purchase of an Extended Service Contract or Insurance product is required for finance approval. This is not only unscrupulous but also highly illegal.
I welcome the opportunity to answer your financing questions whether or not you are purchasing a boat from our dealership. With over 18 years of experience in both the auto and marine financing arenas, (prime, kinda-prime and sub-prime included) if I don't know the answer I'm sure I know someone that does!
Best Wishes to all for a safe and happy Holiday Season!
Charlie Holtom,
Wefing's Marine, Inc.