Visit Your Bank for a Boat Loan
Having considerable experience with the banking process for loans, I would recommend that when you go to the bank, take all the pertinent information about the boat. Take the size, make, model name and/or number, year, HIN (Hull Identification Number, Motor(s) description(s) in detail (the more the better), a list of all the options, etc. If the options are a different year from the boat, include this information as well.
For example, if you are buying a 1995 boat with a GPS that was added in 2003, the loans officer needs to know that the GPS was not a 1995—it affects the value. Or perhaps the trailer is newer or older than the boat, etc.
The more accurate and detailed the information you take to the bank, the easier the process will be.
Discuss your boating plans with the loans officer and you may find that a new boat is easier to finance than a used one.
The more accurate the information you take to the bank, the easier and fairer to you the process will be. Once the loans officer has a value assigned to the boat, the bank policy requires them to apply a formula to determine what amount they will loan you for your boat purchase.
This formula takes into consideration your credit rating and other personal information about you and the result is the amount the bank will loan you. They may require that you put some money towards the boat and they will loan you the rest. All this is strictly between you and the bank—and each bank’s policy is different.
In some countries, boats with galleys and heads qualify as a write off as a second home. Best to check with your accountant or financial advisor before getting excited about your boat saving you taxes.
Banks Want Your Business
In today’s financial market, the choice is yours. There are dozens of banks and financial institutions eager for your business. Unlike the past, when your hometown bank was your only option, now you can choose the type of boat loan that suits your needs.
There’s never been a better time to finance a boat—interest rates are very favorable.
Banks Via Marinas
Many marinas and brokers that sell boats have business arrangements with a certain branch and/or a dealer finance centre. This may be your best route to that elusive knowledgeable loans officer. If you get approval at your own bank, before visiting the dealer for a loan from their finance centre, you’ll be prepared to compare the deals, down payment required and rates etc. Get the best deal for yourself and SAVE MONEY.
Don’t overspend the budget!
Once you have decided how much you can invest either from savings or a pre-approved loan, only use 80% of this amount on the “boat only” part of the purchase. The remaining 20% will cover what you will spend on the other real one-time costs that you will undoubtedly encounter such as taxes, transportation, pre-delivery, electronics, safety equipment and clothing, fuel etc.
For example, if you can afford to spend $100,000 on boating, plan to spend $80,000 on the “boat only” and hold the remaining $20,000 for all the other one-time costs.
If you don’t do this calculation, you will find yourself blowing your budget prematurely ending up with no fuel, funds, etc to enjoy your boat.
Doug goes into greater detail in his book “Buy a Boat With Confidence” about the one-time and on-going costs.