Boat Loan APR?

[muskoka]

I'm with rtbates on this one - zippo, nada. I've always preferred to set my sights on something suitable which doesn't require a mortgage. Start small & work up. Boats are pastimes not investments, and my cash on hand is what I can afford.

[Vasco]

Originally Posted by colemj

However, loans can and should be used to make best use of your assets. For instance, you may have enough money to buy a car in a money market account paying a 6% dividend. If the car loan is 5%, you make money by taking out the loan compared to removing the money to pay with cash.

Don't try this in Canada. First off, it would be impossible to get 6% in a money market account when the car loan rate is 5%! The return in the money market account would be lower than the boat loan rate and then the dividend or interest would be subject to income tax whereas the boat loan interest would not be eligible as a deduction. Pay cash for cars and boats that will depreciate during their lifetime. Circumstances change, often for the worse, look at the sub-prime fiasco.

[Sandero]

Investments are there... ultimately to be spent. Who wants to die with money in the bank? I have no heirs and so I intend to spend my earnings on what I enjoy in life and my boat is the most enjoyable thing I spend money on. In a sense it is not a play thing, but a lifestyle thing.

It does have equity and is worth more than I paid for it... not counting the upgrades.

jef
sv shiva

[CSY Man]

No loan.

Paid it off 5 years ago.
It was somewhere around 7.75 % meh think.

Took the interest of on taxes as the boat was considered a second home.

It does give a feeling of freedom to own the boat free and clear:
Around Ft. Lauderdale I see thousands of big and fancy boats (yahchts)
and my good 'ol boat may not stand out as either big or fancy, but she IS paid for.

Funny thing is, the islands are the same, the fresh air and the clear water is the same, the beer and conch and the sun is all the same whether ya have a big or small boat, or a new or old boat.

Therefore no loan to buy a more expensive boat.

[GordMay]

Today's Rates at BoatUS Are:
* 7.12% APR for loans over $100,000
* 7.37% APR for loans $50,000 - $99,999
* 7.75% APR for loans $25,000 - $49,999
* 9.50% APR 10 years for loans $18,000 - $24,999
Goto: BoatUS Finance: Boat Loans

Compute the Monthly Loan Cost of Your New Boat:
BoatUS.com: Boat Finance

See also:
boatloanrate.net | Boat Boat | Boat Loan | Boat Financing | RV Loan

[Ex-Calif]

Originally Posted by Pblais

If your goal is to maximize income you found just about the worst forum on the Internet.

I am sure glad my wife wasn't leaning over my shoulder when I opened that one.

My wife picked up a copy of GOB magazine in which the fix for a hole in your boat was to stuff $100 bills in it. You shoulda seen me 'splain that one.

[Islandmike]

We paid cash, and are using cash from a kitty for the new engine, rigging, wiring and on and on and on.....

[David_Old_Jersey]

Cash.........and a far smaller boat than I could have borrowed for.

Never been a big one for credit - but no rigid rules, sometimes the answer is to borrow even if from purely a financial angle it is not the best answer.

Delayed gratification is great - but sometimes now now now is better

[vonotto]

Hmm those rates seem high (from boat US)? I would like to pay cash but as this season ends I seem to be seeing some good deals and in another thread about the housing/boat market it looks as this may be a good time to buy. So I may go to the bank and check on a home equity loan as I have lots-o-equity.

Any thoughts on this?????? (Good and bad thoughts)

[Capct]

One should never finance a depreciating asset

[Amgine]

Vonotto: It seems likely the current downturn in real estate will trend down for a moderately extended period. Boat prices tend to be linked to real estate prices; that is, when home prices stagnate or reduce, boat prices tend to reduce more sharply. (Realizing this is not necessarily true of the new boat markets.) The US dollar is being devalued, deliberately or otherwise, which has the net effect of making US labour cheaper, and eventually the price of US goods relatively cheaper.

If all those assumptions are true, it would probably be prudent to hold off on purchasing for a while, and then buying a US-made boat. Unless you really want it now. ::

[muskoka]

During the last housing bust in '89-90, boats & expensive cars went at quite a discount. In fact, my real estate agent from the late '80's managed to tide himself over by bringing boats up from Florida to Canada during the early 90's.

BTW, the average housing bust takes 19Q to go from peak to trough - assuming the peak to be the summer of '05 it looks like the trough will be spring of '10. But I'll bet boats & flash cars will be on sale at giveaway prices long before that.

[GordMay]

Excerpted from: “The Real Estate Bubble” ~ by Fred E. Foldvary
Foldvary: The Real Estate Bubble

”... Historically, the real-estate cycle has had a duration of 18 years, aside from the interruption of World War II. That puts the next real estate bottom around 2008. If past patterns continue (and so far they are right on schedule) we can expect the next recession to take place towards the end of this decade. With all the distortions caused by monetary policy and real-estate speculation and lax bank lending, the recession could be a major crash and the worst depression since the 1930s ...”

The real-estate cycle in the U.S. can be summarized with the following table:
Fred Foldvary Real Estate Cycle

The graph below clearly shows the pattern of the annual real estate cycle for Toronto, (the GTA) in Ontario over the past 12 years:
Average Single Family Residential Home Price Trends, Cycle and Changes January 1995 to Date

Average selling price of single family homes from 1985 to date in the GTA marketplace:

[Boracay]

So, given that we expect a crash soon (though I'm currently betting that interest rates will keep on dropping to prevent this) where should one park one's hard earned cruising kitty?

[DWT]

Boracay,
I'm with you.... the Feds along with Ben at the helm know more than I ever will about keeping us on an even keel. Their to drop the prime next week, .50% would say they mean business. I think I am more worried about the election coming up than anything else.
As far a where to stash that future kitty well, it has me watching the finacial stations on TV more than I like and reading the business section of the news every morning. My wife and I think we're able to hold onto the house we built 7 years ago and still be able to untie the dock line in another year or more. Being a contractor in Florida for the last 20 years, I know housing, know the swings of the market and still fell it is one of our best investment. That investment is now long term, 5 or maybe 8 years but it will come back!

I think maybe your question was more on the short term of investment and...... risk is the name of that game. Money market are good for 5% or, turn your money over to a money manager and they tell me 8% with some risk. The international stock market is hot but alot more risk.

As my wife keeps saying "spending money is easy, getting it and holding on to it is the hard part".

And so, to stay true to this thread. I will not be morgaging any money to purchase my new/used cruising boat. No place up above to say " paying cash".

David
69 Morgan 30'
CaRolAnn