How Much Does A Boat Cost: 5 Ways To Afford A New Boat
Looking to make a cool change? Need some wind in your sails? But, how much does a boat cost? Click here to learn how you can afford your dream boat.
You see photos of your friends out on their boat and get to thinking about what it would be like to cruise around on your own.
You know boat ownership is work but the ability to go and do what you want on the water it sounds perfect. Ah Blue skies and smooth sailing. But then you have to think about the money.
How much does a boat cost, anyway?
Continue reading this article to learn more about how much youre going to pay to be a proud boat owner.
Determine What Youll Use Your Boat For
While one boat might be a great buy for some people it might not suit your needs at all.
Do you want to use your boat to fish? Ski? Tube? Figure out what you want to do with your boat and then you can figure out what type of boat you need.
Before buying your boat, make sure youll have time to use it. If you dont think youll have time to use your boat very much, you might choose to go in with a friend or family member and buy the boat together so you can share the fun and the expenses.
Three: Look At The Numbers
Again, a lot of people make assumptions before they look into the actuality of things. If you truly want to afford a boat, it is easier than you think. Just sit down and break down the numbers so that you know exactly how much money you need to save and how much it is going to cost you to buy your boat, as well as to maintain and own the boat over time. This way, you will know exactly what you can afford and, perhaps more importantly, that you can indeed afford to own a boat.
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Setting A Value For The Boat Based On Usage
Once youve identified the associated costs, the next stepis to determine how much boat to buy. This can vary based on how often youreplanning on using the boat and what level of enthusiast you are. If youre aperson that uses the boat often or a huge boating enthusiast, it may make senseto spend a bit more. Another consideration is your threshold for maintenance.If youre considering a used boat, it may make sense to buy something a fewyears newer as the service and repair can be less time and resource consuming.
Conversely, if you live in a climate that limits boat usageor if your intended use is otherwise limited, a lower priced boat might makemore sense. The most important part of this decision is to be honest withyourself about your boating plans and select a boat accordingly.
Can I Finance A Boat With Bad Credit
Boat loans tend to have stricter credit requirements than mortgages and auto loans do, because they’re considered luxury items. You shouldn’t have any problem with a FICO score of 700 and above, but the further your score falls below that, the more challenging it will be.
Not all lenders have the same credit requirements for boat loans, so just because you’re turned down by one doesn’t mean you won’t be approved by another. Shop around. Be aware, though, that lower credit scores mean higher interest rates often dramatically higher.
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Calculate Payments With Our Boat Loans Calculator
Use our boat payment calculator to determine a monthly payment that you can afford when looking to finance a new or used boat.
Simply enter your desired amount, estimated interest rate, and the loan term over which you intend to pay back the loan. Once you’ve input the information, the calculator will generate your estimated monthly payment on your boat loan. Take this number and plug it into your current monthly budget.
How Much Boat Can I Afford
You decided to buy a boat, and then realized that boats exist for free, all the way up to a billion dollar cruise ship. Show how much boat can you afford?
If you are getting a loan, you do not want to exceed 43% debt to income from all your loan payments. Your max payment would be your pre-tax income multiplied by 43% and then subtract the payments for your mortgage, car payments, and any other loans you make payments on.
The thing about boats is that they are a luxury purchase. Unless you are looking to buy a boat that you will charter and use as a business. This article does not cover buying boats for business and is strictly focused on pleasure boating.
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Determine What Type Of Boat To Buy
Now that you have decided to embrace the boating lifestyle, you’ll want to establish a budget so you can start building and prioritizing your wish list. That budget will likely be a key factor in the decision to buy a new or pre-owned boat. Either way, the considerations for size and type of boat will be the same.
When it comes to determining the right size for your boat, there are a number of factors to consider:
- People: How many people will you regularly have on board? Will you host just your immediate family or will you bring extended family and friends?
- Towing: If you are trailering your boat, keep in mind that the size of boat will directly impact the size of the vehicle needed to tow it.
- Location: Think about where youll be using the boat. If youre planning to boat on larger waterways, then a slightly larger boat with a deeper hull might make more sense. Smaller waterways or shallow water might require a smaller vessel.
- Storage: If you are storing your boat at the marina, boat size will likely impact monthly storage costs. If you are storing it at your personal dock, what space constraints already exist? Youll also want to talk to your dealer or marina manager about the potential need for winter storage.
Learn more by reading Choosing the Right Boat Type: Buying Guide for Recreational Boating.
Online Boat Sales Team
Do you have additional questions? Maybe you are even ready to apply? Let us introduce the White River Online Boat Sales Team. As part of White River Financial Services, the Online Boat Sales Team can help SUN TRACKER customers to easily apply for great finance options, and even shop for a SUN TRACKER pontoon at dealerships nearby. Theyre here to help at any stage of your shopping process!
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Who Can Afford A 100k Boat
Gunner38I’ve asked on this forum many times but never got an answer- what % of boat purchases $80-$120k involve any financing??No one answers because it’s over 80% is my guess.View Full ProfilemikefloydDoes this ever end? There seems to be a constant string of threads with people complaining about what other people do with their own money.SplashFLOne thing that really helps the value of used ones are large increases in the price of new ones.RIDE2GETHERIf someone is not a boat dealer or in the boat financing business and is simply a member of The forum how could you possibly expect any kind of accurate answer to the question you are asking?you seem to imply that because the answer might be over 80% that actually means something?without knowing the exact financial situation of anybody who financed the boat any answer is pure speculation and pretty much useless.my speculation is the reason why most people don’t answer the question is because most people think it’s none of your business.View Full Profilecwhite6andSAMSLIMOVICHAs above…Who can afford a boat that’s 100,000.00 or more? I don’t want to be snoody, I’m just wondering.Jcwhite6nickyn99Who gives a shit if you got 500,000 or more in the bank or retirement. You never know when your time is up so that money won’t do a bit of good when your gone except maybe make somebody else happy.beberSplashFL
Can I Get A Boat Loan With Bad Credit
Technically, there are lenders who will offer boat loans to individuals with bad credit ratings. Since a boat is a luxury purchase, you shold think through whether it is a good idea to be getting a loan on a boat with a low credit rating.
It is possible that you have repaired whatever underlying condition in your finances that caused you to have a bad credit rating, and it just takes time for your rating to improve.
The interest rate will be higher, and in many cases could be as much as 2-3 times higher than the interest rate offered to a highly qualified borrower. You will likely not be eligible for the 10-20 year boat loans that are offered to borrowers with better credit scores.
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Calculating Your Monthly Boat Payments
There are typically two ways to pay for a boat. Either with cashor financing. If youre paying cash, its a relatively simple decision based onyour savings and comfort level in giving up your cash. If youre financing,there are some conventional tools to help you determine how much you shouldspend.
Finance companies establish affordability via a calculationcalled Debt to Income Ratio or DTI for short. Your DTI takes intoconsideration your monthly debt shown on your credit bureau and gross monthlyincome. It does not consider items not reported on your credit bureau such asInsurance, utilities, food, entertainment, etc.
The marine lending industry usually has a maximum Debt toIncome Ratio of 50% or less. In order to calculate your DTI, you divide yourmonthly debt by your total gross monthly income. For example:
- $993 Credit Bureau Monthly debt + $1200 housing payment +$300 estimated new boat payment = $2493 TOTAL MONTHLY DEBT.
- $6000 in gross monthly income + any potential additional monthly income = $6000 TOTAL MONTHLY INCOME
- $2493 Total Monthly Debt divided by $6000Total Monthly Income would have a DTI of 42%
In this scenario a $300 monthly boat payment would beaffordable and could potentially be even higher if you found a boat that was alittle more expensive.
Use Your Boat Frequently
If you dont use your boat very much, things will fall into disrepair. Taking your boat out regularly will allow you to stay on top of things that need to be taken care of so they dont get worse.
Not only will you be able to keep your boat in good repair but when you use it often, youre getting your moneys worth out of it.
When you use the above five tips, youll be able to keep your boat upkeep and other issues to a minimum after youve put out the initial cash for the purchase.
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Boat Loan Payment Calculator
What if you have a boat in mind and just want to know what your monthly payment will be? The boat loan payment calculator can help you estimate your monthly payment.
Simply input the amount you wish to borrow, enter an estimated interest rate, and select a loan term.
The calculator gives you the monthly payment for terms ranging from 1, 3, 5, 7, 10 and 15 years.
The longer your term, the lower your monthly payment will be. However, the longer you finance a purchase, the more you will pay in interest charges.
Do I Need Good Credit What Will Be My Interest Rate
Applying for a boat loan with bad credit is a major red flag: Why are you trying to make a big luxury purchase, a lender would wonder, when you cant even handle your finances? And even if you do find a lender, its still not a great idea.
Assuming you do have good credit, you can probably expect to find an interest rate around 3.4% to 8% for a 12- to 20-year boat loan.
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Boat Loan Calculator: See Your Boat Payments
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If you need a boat loan to cover the purchase of a new or used boat, a loan calculator can help you determine what size or type of vessel you can afford.
Use this boat loan calculator to estimate the cost of a personal loan used to finance a boat. Enter your expected loan amount, desired repayment term and annual percentage rate to see estimated monthly payments, interest costs and total payments.
» MORE:
You can change your desired loan amount, term or APR to see different results and decide how boat loan payments fit into your budget.
Loan amount: This is the amount you expect to borrow. Amounts for unsecured loans can be as high as $100,000, while secured boat loans can be over $1 million.
Repayment term: This is how long you think youll need to repay the loan. Unsecured loans often have repayment terms of two to seven years secured boat loan terms can be as long as 20 years. Longer repayment terms typically mean lower monthly payments, but you’ll pay more in total interest.
Here’s what average estimated APRs are on unsecured personal loans, based on FICO score ranges:
Determine The Ongoing Cost Of Ownership
The first thing to identify is the cost of boat ownership,not only the price of the boat itself. Youll want to identify how much it willcost to use the boat. The main items to consider would be:
- Storage/ Moorage Will there be a costto store the boat in or out of the water?
- Fuel How much will it cost to operatethe boat?
- Insurance How much is the annual ormonthly rate for the insurance?
- Maintenance What is the expectation forservice and repair costs?
Fortunately, the ownership costs can be relatively low.However, taking the associated costs into consideration will ensure that you donot get caught off guard with additional bills and allow you to concentrate onthe good part- having fun on the water with friends and family.
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How Expensive A Boat Can I Afford
Unless you plan on living in a houseboat year-round, a boat is a luxury or leisure item, not a necessity. As such, you need to set realistic expectations of how much you can afford to pay month to month, and how much you have to set as a down payment. Considering that youll also have to account for moorage, maintenance, and fuel costs, definitely give yourself some padding in your budget.
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Two: Know Your Options
When it comes to buying a boat and maintaining that vessel, there are a lot of different ways that you can go about paying for things. There are also different options, based on your budget or means, as well as what you want out of boat ownership. Make sure that you explore every avenue. After all, while you might not be able to afford to finance a brand new 40-foot yacht, you can probably afford to invest in a small, older fishing boat to enjoy your fishing hobby.
Setting a budget is tricky because you have to research whats out there first so that you know what you should expect to spend. At the same time, youll already have an idea of what you can afford. Even if you think its not going to match, you should check out the available options for buying a boat, because you might be able to afford more than you think. Explore the pros and cons of buying new versus buying used, financing a boat or saving up and paying for it outright, and so forth.
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How Do I Get The Best Deal On A Loan
It is a good idea to shop around a bit for the best interest rates and loan terms. Sometimes local credit unions will have the best deal for you. Other times a dealership can get the best loan, because they act as brokers for multiple lenders. Sometimes a bank offers the best rates. The key is to make a few calls and see what is available.
In order to get a low interest rate, lenders will look at your:
Some lenders will offer a discount if you set up automatic payments.
