Financing older (< 2001) Nautiques

[scag]

I come from a retail automotive backround. In my business, lenders have strict requirements for lending term length to vehicle age ratio. These days generally cannot get 60 or 72 month financing on a vehicle older than an 04. I know Loan to Value plays a big role as well as credit score, etc...

With these Nautiques holding their value so well, I plan to be in the market for a 95-2000 yr boat. I assume this is going to cost me in anywhere from 15-20k. Thats a lot of cash for a 10-15 year old boat.

Will banks finance boats of this age? What kind of terms can you expect? And at that age are there certain loan to value ratios?

Assume best case scenario credit rating. BTW, I used the search function, but couldnt quite find what I was looking for.

[81nautique]

RE: Financing older (< 2001) Nautiques

I think you'll be in the 10-15K range but it's still a lot of cash. I think you'll have a hard time getting a bank to be excited about that loan and they will probably want more than the boat as colateral and the rate is going to be rediculous.

Simplest thing although I don't endorse it would be to use your home equity line if you've got one established. The interest will help you at the end of the year too. Remember Home equity loans are what has a lot of people upside down right now.

These days if I can't buy my toys in cash I walk away. Only good loan to me is one that says "Paid in Full", stay debt free for a few more years is my advice.

[Chris4x4Gill2]

RE: Financing older (< 2001) Nautiques

I had no problem when I looked into financing my 89 last year. They ran a NADA(or whatever it is on a boat) value on the boat and trailer. It would have been done as a "Consumer Loan" and I could have stretched the payments out to up to 7 years.

[81nautique]

Re: RE: Financing older (< 2001) Nautiques

I had no problem when I looked into financing my 89 last year. They ran a NADA(or whatever it is on a boat) value on the boat and trailer. It would have been done as a "Consumer Loan" and I could have stretched the payments out to up to 7 years.

Consumer loan, exactly. so they wanted more than the boat for collateral. This implies they don't really want to finance the boat but they'll gladly take anything else you have if you default.

[DanielC]

RE: Financing older (< 2001) Nautiques

I would suggest you use a credit union, instead of a bank that is trying to make a profit, and is trying to recover losses from recent bad loans.

[mndanielsncsu]

RE: Financing older (< 2001) Nautiques

I agree with Daniel C - I financed my 93 through my local Credit Union and had no problem. I financed it for 4 years with a small amount down.

[2gofaster]

Re: RE: Financing older (< 2001) Nautiques

I had no problem when I looked into financing my 89 last year. They ran a NADA(or whatever it is on a boat) value on the boat and trailer. It would have been done as a "Consumer Loan" and I could have stretched the payments out to up to 7 years.

Consumer loan, exactly. so they wanted more than the boat for collateral. This implies they don't really want to finance the boat but they'll gladly take anything else you have if you default.

With the banks and credit unions I've dealt with, a consumer loan is nothing more than a signature loan with the item as collateral. I've never seen anyone with decent credit need additional collateral.

[pj]

RE: Re: RE: Financing older (< 2001) Nautiques

I used my credit union when I bought a 96 a few years ago. They gave me a "Recreational Vehicle" loan. Could have gone for a 15-yr term if I wanted to on that baby.

[Erik]

RE: Re: RE: Financing older (< 2001) Nautiques

Credit Unions are your best friend in this situation and kind of the only option. Because what 81nautique said is correct. Big banks won't be interested in giving you this money.

[Chris4x4Gill2]

Re: RE: Financing older (< 2001) Nautiques

I had no problem when I looked into financing my 89 last year. They ran a NADA(or whatever it is on a boat) value on the boat and trailer. It would have been done as a "Consumer Loan" and I could have stretched the payments out to up to 7 years.

Consumer loan, exactly. so they wanted more than the boat for collateral. This implies they don't really want to finance the boat but they'll gladly take anything else you have if you default.

With the banks and credit unions I've dealt with, a consumer loan is nothing more than a signature loan with the item as collateral. I've never seen anyone with decent credit need additional collateral.

Exactly, the boat is the only collatoral on the loan, as long as the loan is not more than the blue book value of the boat.

[SkiTundra]

RE: Re: RE: Financing older (< 2001) Nautiques

Agree w/ 81nautique, if I can't pay cash, I don't do it. Only thing we finance is our house and 1 car at a time. Even in good economic times. I've seen too many people's lives ruined by 'gotta have it now' credit. Even aside from total ruin if you get behind on payments, think about the interest costs. On a $15k loan for 5 yrs you'll pay about $3600 in interest. That $15k boat will cost you $18.6k. What else could you do with $3600? That's a lot of money!

Just my thoughts...

[mf01]

Re: RE: Re: RE: Financing older (< 2001) Nautiques

Agree w/ 81nautique, if I can't pay cash, I don't do it. Only thing we finance is our house and 1 car at a time. Even in good economic times. I've seen too many people's lives ruined by 'gotta have it now' credit. Even aside from total ruin if you get behind on payments, think about the interest costs. On a $15k loan for 5 yrs you'll pay about $3600 in interest. That $15k boat will cost you $18.6k. What else could you do with $3600? That's a lot of money!

Just my thoughts...

I agree with you. Toys aren't needed so they should be purchased with cash. Hence the reason I bought a 94 Sport instead of financing a newer boat.

[scag]

Re: RE: Re: RE: Financing older (< 2001) Nautiques

Thanks for the info everyone! Simple answer: Yes, you can obtain financing on older boats, generally through a credit Union. Terms and required LTV depend on credit, institution standards, lending market, etc.

Agree w/ 81nautique, if I can't pay cash, I don't do it. Only thing we finance is our house and 1 car at a time. Even in good economic times. I've seen too many people's lives ruined by 'gotta have it now' credit. Even aside from total ruin if you get behind on payments, think about the interest costs. On a $15k loan for 5 yrs you'll pay about $3600 in interest. That $15k boat will cost you $18.6k. What else could you do with $3600? That's a lot of money!

Just my thoughts...

If you don't have any other worthy investments then you have a case, but personally, I don't believe it is wise to sink money into a depreciating asset when there are other worthy investments (such as a rental property) that I stand to make a higher ROI than my interest rate for the boat loan. For example, if you have an investment that earns you 10%, and your boat loan costs you 9%, you are doing yourself a financial disservice by not financing 100% of the boat.

I never said I was financing the entire amount of the boat in fact I expressed skepticism that a financial institution would loan 100% loan to value...so my impression and initial expectaion was to put around 25% down as a requirement.

To be honest, even without the opportunity cost of another investment, I would probably still finance a good portion of the boat just for the peace of mind that I have the cash free to use. I live a pretty modest life, truck is paid for, no major outstanding debt outside of mortgages.....if I lose my income, a $250 payment isnt going to break me. Sorry for going off topic....but I had to answer.

[bchesley]

RE: Re: RE: Re: RE: Financing older (< 2001) Nautiques

Scag that is the exact thinking that got most of the people in financial trouble in recent months. Sometimes when you want soemthing you should just pay for it. That means with cash. Some how it seams silly to finance a new pair of shoes but its ok if its a boat. I follow the rule that is I really want it I better have cash to pay for it or I ont buy it. It took me a few older boats to get where I am but its paid for and so it everything else that i own. You ought to try it...........

[scag]

Re: RE: Re: RE: Re: RE: Financing older (< 2001) Nautique

Scag that is the exact thinking that got most of the people in financial trouble in recent months. Sometimes when you want soemthing you should just pay for it. That means with cash. Some how it seams silly to finance a new pair of shoes but its ok if its a boat. I follow the rule that is I really want it I better have cash to pay for it or I ont buy it. It took me a few older boats to get where I am but its paid for and so it everything else that i own. You ought to try it...........

You make Dave Ramsey Proud! :grin:

Like I said, the cash is there to back it up. But i'm not sinking 15-20 g's in a boat. (Unless I was buying a $70k boat). You and I are different people, probably in different stages of their lives. You obviously are much more risk averse and probably have a portfolio yeilding lower returns. There is absolutey nothing wrong with that and maybe for your age (which I don't know) it may be a very sound strategy.

A 15 to 20k boat is going to hold its value quite well, more so than a 40k+ boat. Especially in rough times. If something disasterous happens, I sell the boat, maybe take a small hit from negitive equity (absolute worse case scenario because I plan to put 25% down, thus always remaining in an equitable position) depending on how front loaded the interest on the loan is and I walk away. Depending on the deal I get and how well the boat remains maintained, that "hit" may be pretty small.

I appreciate your concern, but I am confident in my financial position and I didn't get here by making lousy decisions or inpulsing silly investments. Leverage is a beautiful thing when used right and by an individual that can exercise self control. Its funny, when I worked in auto sales during college, the only people that paid cash for cars were retirees. The rich people usually leased, and if the APR was low, they ALWAYS financed.