How To Finance Your Next Boat
Looking to make 2023 the year you hit the water in a boat all your own? With more than 12 million registered boats on the water in the US, you’re not alone. Much like any major purchase, it brings a lot of excitement, but also a lot of unknowns. Before you get to the fun stuff, like picking out water skis or making 4th of July plans, you need to make sure you know how you plan to finance your new or preowned boat.
How Do Boat Loans Work?
With the average new boat purchase ranging from $40,000-$75,000 and used boats between $10,000-$20,000, understanding the ins and outs of boat financing is critical to keep your boat from being a burden rather than a source of enjoyment.
Boat loans work similarly to auto loans but are a bit more serious in terms of commitment and impact on your finances. Depending on the total cost of the boat you plan to purchase, lenders may require down payments of 10-20% and can stretch payments up to 20 years. There is also the matter of annual maintenance, insurance, fuel, and other costs like taxes, registrations and licensing, and accessories to consider.
Where Do I Go For A Boat Loan?
There are plenty of options to consider when it comes to financing a new or preowned boat. Here are some of the ways you can finance your dreamboat:
Traditional Bank or Credit Union: If you have a good relationship with your current bank or credit union, it makes sense to connect and learn about their offerings when it comes to financing a boat. Typically, a loan serviced through your personal bank or credit union will be a secured loan with the boat acting as collateral. Your bank or credit union can deliver payment directly to the dealer for purchase or provide you with a check to make the payment.
Dealer Financing: If you choose to work with your local marina or boat dealer for purchasing, their sales or financing team should be able to help you navigate the financing process and can help you determine the best options available to you. One advantage to financing through your local marine is that you’re working with specialists who understand the boating business and are high experienced with a variety of lenders and financing options.
Online Lenders: If you prefer a digital experience, online lenders may offer you the convenience you’re looking for and you can compare your options from a variety of institutions in one place. The process is typically quicker than traditional institutions, but you’ll also find that the interest rates and repayment terms vary widely.
Cash: Ready to empty that piggy bank and buy the boat you’ve been saving for? Now that’s a smart move. Not only can you alleviate the stress of financing and monthly payment plans, but you can hit the water knowing your boat is truly yours.
Secured v Unsecured
Boat loans can either be secured or unsecured, which simply means that your loan requires collateral, or it doesn’t. In the case of a secured boat loan, the collateral would be the boat itself, which means that you run the risk of losing your boat if you have a lapse in payments. An unsecured loan, however, comes with higher interest rates than secured loans.
Our Financing Tips:
Know your credit score and understand that when lenders check your credit score it may drop a few points.
Determine a monthly payment you can afford plus other expenses like maintenance, fuel, storage fees, and other miscellaneous costs. There are many calculators online that will help you estimate annual costs and monthly payments. Or a knowledgeable dealer can help you with the math.
Compare loan offers. You don’t have to go with what any lender offers-whether it be the dealership, your credit union or bank, or an online lender. It’s best to gather a variety of options before you get ready to purchase.
Get preapproved. This helps dealers know that you’re a serious shopper and will help you determine how much boat you can afford.
Don’t ignore insurance. Many insurers offer bundled policies, so check with your home or auto insurance provider for pricing.
Be ready for a down payment. Many lenders require a down payment at signing-be prepared for 10-20% of your boat’s total purchase price.
The Bottom Line
While the lake life is fun, we think the best boat for you is the one that you can afford. To avoid your dream boat from becoming a financial nightmare, do your homework and work with local professionals that can walk you through each step of the process, so you make the right decision for your budget.
The finance pros at Main Channnel make the buying process simple with easy online approval via our financing application here. We'll negotiate directly with financing institutions to help get you the best deal for your budget. And because we're boat people too, we can help you plan for additional maintenance and other costs depending on the model and brand of boat you're purchasing.
Main Channel’s service and financing teams are ready to help get you on the water in a boat you’ll love without breaking the bank. We're here to help you with
Two area locations in serving Northwest Indiana
New and used inventory
Unparalleled Sales, Service, Financing and Parts teams
Authorized Dealer of the most trusted brands
Happy Boating,
The Skipper
