Boat loan term

We REALLY wanted a larger cruiser but could only afford to pay CASH for a pocket cruiser so that's what we got..We're not at all disappointed with the boat and not overly jealous of larger cruisers (yet). We are both in our early 50's and if either one of us lost our jobs a boat loan would sink us .. pun intended.. Still, a new pocket cruiser and truck to tow it was north of 100,000 so we'll have to work a few extra years to replace that cash.. Oh well, we really look forward to our outings on the boat and it's a good feeling knowing it's paid for. The rest, relaxation and happiness being on the water gives us will probably add a few years to our lives.
 
If you are thinking about getting a loan, add up all the finance and interest charges to the cost of the boat, that is what you are really paying for the boat. After interest charges, many borrowers are paying at least double what the selling price of the boat is. My decision was to go with a smaller, used boat and pay cash.
 
Paid cash, and really couldn't afford it. But either buy the boat so the kids could experience it as kids or pay off bills and get a boat when the kids were out of the house.

We chose to give our kids the "boating experience" now. I am just glad my collection of pinball machines was worth enough to sell off to pay for the boat. (but I did keep two;))
 
Wow, this thread dates all the way back to 2007. Economically and financially it was a different world back then!

Bob
 
quote:
Originally posted by missnmountains

Everyone... Why would you spend 100,000 to save 30,000. Debt is bad no matter which way you look at it. The evil in the world is the Mortage (loan) company. Not the IRS. Why would I pay the Mortgage Company 1,000 per month to save 300 or 400 on taxes. This is completely illogical. Obviously if you do not have the cash to buy, loans help, but do not think the IRS deduction is good. Besides, if a certain political party is elected, you will most likely loose the mortgage deduction along with property taxes and charity.

Click to expand...


Haven't heard anyone answer this one.

Holding onto cash while carrying an amortized debt is a suckers bet.
 
I like some people here, pay cash for my vices. Certainly a home mortgage is Ok when the home is within reason. However, a boat, even when the interest is deductable is a losing proposition. In fact, the whole mortgage interest deduction is a looser. Why would you give someone a dollar to get .25 back?

The other day I was watching "Margin Call" and the meat of the whole movie, in which an investment bank was sinking under mortgage backed securities was what this guy said. (I have edited the language)

"If you really want to do this with your life you have to believe that you’re necessary. And you are. People want to live like this in their cars and their big f***ing houses that they can’t even pay for? Then you’re necessary. The only reason they all get to continue living like kings is because we’ve got our fingers on the scales in their favor. I take my hand off and the whole world gets really f***ing fair really f***ing quickly and nobody actually wants that. They say they do but they don’t. They want what we have to give them, but they also want to play innocent and pretend they have no idea where it came from. That’s more hypocrisy than I’m willing to swallow. F them. F normal people."

IMHO, if you are doing long term financing of something as frivolous as a boat, you are playing the game he described and when the music stops, things get "fair" really, quick.
 
If you do not own it outright, or it is not neccesary for your existence (i.e. you work on two coasts), yes.

Look, I'm in the market for an airplane right now. I'm looking at two different machines. One is 70K the other 145K. Now the difference to me is not the monthly payment, but what I'm going to withdraw from savings. When you place the differential in what your savings account looks like afterwards, it makes things a little more "real".
 
The compelling reason to have a loan on a boat is to have a bank in your back pocket.
If something happens to the boat and it is totalled, you want someone other than you fighting the insurance company.

With that said, though, I found out that if there is a partial payment made, it goes to the bank first and you second.
So they may be fighting for you, but for their money, not yours!

I paid off my boat after deciding I was tired of the 5% loan and getting 2% on my money in the bank!
 
"The compelling reason to have a loan on a boat is to have a bank in your back pocket.
If something happens to the boat and it is totalled, you want someone other than you fighting the insurance company."

Don't work that way sport. You are on the hook until the loss payable endorsement is satisfied. If it is not, you keep making the payments and risk action for your failure to pay. I've seen enough lost airplanes in Mexico to know that one.
 
Well either way, I own my boat and I am proud to say it.
I have a short term goal to get out of all debts by end of this year.
 
Well I do think calling folks that have a boat loan foolish, is a bit foolish, and arrogant. I have a loan for mine. And I have a loan for a house in Iowa that I have never lived in. Of course those are my only loans. No car payments, credit cards or other crap. 30% of my income going to retirement accounts. Foolish me. I should just sell the boat so I don't have that frivolous toy loan. And sell the house too since I don't live there. Pretty moronic blanket statement if you ssk me.
 
Howzabout this. Forgetting how much money one makes, or doesn't. How smart one thinks they are, or aren't. Whether ones boat loan interest is deductable, or not.....

If there were no boat loans, there would be no boating industry. If you think Bush 41 destroyed the boating industry with his 1990 "no new taxes" budget, just take the credit industry out of the equation.
 
I think you miss the point here John. Taking out a loan because the interest is deductable is foolish. You are spending a buck to get back 25 cents. There are a lot of tax write offs that have a lot more leverage and provide a stronger asset base if taxes are the issue. Second, taking out a loan of such term and duration that upon signature you are upside down is equally foolish. There are a lot of people that need a little boost here and there and that is what loans are for. However, scaling up your purchase simply because you can afford the payments a is beyond comprehension when you think about it. Equally so is taking out loans of near double digit or beyond duration because the asset will depreciate beyond the amoritzation schedule.
 
I didn't miss the point. I didn't take the loan for the interest deduction. I took a boat loan because I wanted a not I could not pay cash for. I could have paid a lot more than the 30% down I did but wanted to have money in the bank for what ifs. Such as the motor I replaced this summer.

Listen, understand some people take more than they can handle but the majority do not. As David pointed out, imagine where we would be if people did not take out loans for things like this.
 
You must log in or register to reply here.
Back
Top