So you’ve decided to buy a boat, but you’re not so sure about your finances. If that’s the case you’ll need to have full peace of mind when you buy, otherwise, you’ll have money worries and be concerned about falling into debt. This article has been designed to help anyone who is looking for ways to cut costs when they buy the boat of their dreams.
What Is Boat Financing?
Boat financing is the process of purchasing a boat through monthly installments rather than paying for it all at once. Boat finance companies offer loans to cover boat costs based on how much money you earn, your credit history, and what type of boat or watercraft you are buying. The biggest factor that affects your credit score is whether or not you pay off your debts on time every month, so it’s always best to try and stay up to date with the monthly repayments if you’re looking to make a boat purchase.
There are different types of financial agreements that can be made depending on whether you want to purchase an expensive new model or a secondhand item with more wear and tear (which might not have as long a lifespan left in its current condition).
Lending Companies
When looking at what lending companies have to offer, you want to look out for the interest rates and fees (including hidden ones!) that they charge. You also should be aware of how long their repayment schedule is, as this could affect your monthly payments. The sooner you plan to pay off your debt, the lower the premiums will be but if you are seeking a long-term loan, you’ll pay more over time in terms of interest payments, etc.
You may wish to begin by looking at price comparison sites or the websites of specific companies. When it comes to boat lending some companies will consider you regardless of your credit status, and if there is a nationwide network they can find the best partner for your needs. They also offer additional services such as boat insurance, boat warranties, brokerage services, legal services, and state titling and registration.
Financial Advisors
Besides looking online you may also wish to consider meeting a financial advisor face to face. This can be a great way to get advice from someone who is knowledgeable about the boat financing market, especially if they’ve been operating for several years. A financial advisor may even be able to provide you with some good contacts for getting your loan quickly if they’re not offering it themselves.
Be sure to take their financial guidance with a grain of salt, however. Their job is to make money selling products and services and they won’t always give unbiased recommendations. They may not always suggest the best option or advise you that you could get a better deal elsewhere. As such, meeting face-to-face should supplement online research rather than serving as its replacement. If you do see a financial advisor, however, you would do well to go elsewhere and get a second opinion before you commit.
Buying Second Hand
This option could save money and reduce costs if it’s done properly. Make sure that whoever you’re buying from has paid off their loan before you purchase it secondhand. Should the boat be made over into your name the loan could become your responsibility.
The seller would have an outstanding balance on their financial statement, which would mean high-interest rates throughout the life of the loan unless negotiated otherwise.
Free Up Some Finance
The more money you have upfront, the lower your loan will be. For this reason, you should look for ways to free up some extra money. Whilst it may involve an element of sacrifice you would need to weigh this up against gaining the boat you’ve always longed for.
Perhaps you should cancel your vacation plans for this year. You may have a second car and be able to sell one of them. Other options would be to begin a side hustle such as taxi driving or delivering takeout during your free time. The final compromise would be to buy a new boat that is cheaper and more basic than the one you originally planned to purchase.
Hopefully, you are now clearer about your options and the different ways forward that you could consider. Who knows how your life will be in twelve months from now? You may be a proud boat owner who is able to comfortably afford their latest luxury addition.