General run down on a new boat and payment..

[DAFF]

Here is my thoughts on loans.... As long as you ahead of the what (object "X") is worth in the open market compared to what you owe all is good !!!

If you can buy a $25k valued boat for $18k and have it 100% purchased through a loan then you are ahead of the payment game ... If you find yourself behind what you owe and it actual street value expecially at day one of the loan then "RUN" from the deal.

Think a few years ago with leasing a vehicle ... The big three took a huge kick in the pants and quit the leasing game for this exact downfall.

[doofus]

I was not criticising any specific individuals with my previous comment in this thread, but more so it was a generalisation that I am utterly amazed that any financial institution would ever consider financing an individual for 15 or 20 years in order for them to purchase a boat.

Going from many responses in this thread it seems like that a loan term of 12 years seems to be the norm for you guys in the States, and I even struggle getting my head around this term of loan. Boat loans of this duration are simply unheard of in Australia. As I previously mentioned in my last post, I think the maximum number of years that a boat loan can be taken out for here in Australia is 7 years in total.

I would imagine that the long term aspiration for any prospective boat owner seeking to finance their boat is to ultimately own the boat out-rightly one day, but I just can't see how this can ever be achieved if you take finance out over a 15 year period and then change the boat for a new one every 3-5 years down the track.

The interest rate on most loans is calculated and compounded on a per annum basis over the duration of the loan, so unless you are paying a very large monthly re payment that will not only eat into the annual interest being charged, but also into the initial principle financed, there is just no way that I can see someone ever owning their boat outright if they have taken out a 15 year loan and then are updating the boat every 3-5 years.

If you are changing your boat out every 3-5 years into a 15 year contract, you would have made very little inroad into having paid any substantial amount off the initial principle financed, so therefore whatever amount you receive on your old boat (taking into consideration depreciation) usually only serves to pay off your existing debt on your current loan, so to upgrade to your new boat you have to refinance again for roughly the same amount as you did for your last boat. I am sorry, but I just cannot see how someone can eventually attain outright ownership of their boat by doing this.

I reiterate that I am not having a go at anyone in particular, but as this is a public forum, I am just expressing my own views on this subject.

[KY Steve]

What's a boat payment?

Are you kidding me! Its attitudes like that keeping our economy in the crapper!

Think about it, when you buy that $70K boat most of us cant afford SC makes money that filters down to their employees, the dealer makes money, the salesman makes commission, the bank makes money from the loan, your insurance co make more money, your state steals(I mean receives) more tax revenue and you get the privilege to captain one of the baddest machines on the lake.

Just don't miss a payment or things will be back in the crapper.

[jsandy]

so your saying more people being in debt will help our economy and our country? I'm sorry but that is just wrong. I know what your saying that buying things will help but being able to afford them is better. All the people that bought houses, boats and other things on credit then fill for bankruptcy or short sale on is what shot our economy into hell. Saving so you can pay cash is better and always will be. There are to many people living there life thinking that car payments and second mortgages are good and what normal people do. Me personally i will never have a car payment or boat for that matter and wont even think of using the evil credit card. Save be smart and enjoy your toys that you actually own, not that you are paying for

[ditchsnake]

All you young guys, go buy boats and don't get married. It's cheaper!!!!!!!!!!!!

[CarZin]

Its a basic economics 101. Credit is needed to expand an economy. The problem is finding a balance. We havent found that. I expect that the reason these boats are so darned expensive is partly to blame on the availability of cheap financing, but if the banks werent making money off of it, they wouldn't be doing it.

I always like to examine the opportunity cost of saving before you buy as opposed to the immediate solution of using credit. The boat is a fairly easy exercise. I wait the 5-7 years it would take for me to allocate 30-50k of my savings for a reasonably priced boat, and during that time my body will have aged enough where I may not be able to do all the things I wanted to do when I endeavored to buy a boat. I am also missing all those weekends of fun on the lake with friends and family. Is that worth the wait? In my situation, no. Life is short, and if you factor in the period of time 'most' people can do very active things, it is very short.

^ For me, I'm enjoying the boat before I know I'll have to sell it when we have kids. I suspect all our funds (if my wife has anything to do with it) will be going towards them in 2-3 years, and then they'll be nothing left for a boat. Had I been saving, the boat fund would turn into the college fund

[jsandy]

yea and you sure dont want to waste money on something like a college fund. just tease'n. I understand your point of veiw and will not argue that it works for you. But me i like to know i have money, not debt. With that be'n said give me a call when you need a new boat

[CarZin]

Hehe, I had to pay for my college out of my own pocket. Still paying for it in fact, but that will gone in a couple of years I think most kids today are too spoiled. I suspect I'll be helping my kids through college, but I'm not going to give them everything like a lot of parents do.

[foxriverat]

Pay it off and you wont have to sell it when you have kids. We have a 24 year old who just graduated college. And a 7 year old (oops a very good thing though) My 96 comps going to last me a long time. As I could not afford another boat. As far as age goes. I am 51 and still barefoot, slalom, wakeboard. And I can beat my friends 14 year old son who plays soccer in a foot race. So you have a long way to go if you take care of yourself.

[CarZin]

I suspect our issues will be time and money I don't see a lot of new parents taking a ton of vacation. Its like pulling teeth to get couples we know that have two year olds to even spend a day with us on the lake. My wife loves the lake, however, so I suspect she'll work it in the schedule.

I am getting rid of the most expensive toy I have in preparation for kids, and its not a boat

I wish I could be that active at 50 I was at Jackson Hole last year and went up to the top of the mountain with a 75 year old. Simply amazing. He could ski circles around me.