Chris Edmonston: It's another great day to be out in the water. Hi! I'm Chris Edmonston, President of the BoatUS foundation.
So you found yourself a boat you think you might want to buy, but you are wondering how you're going to finance it. Well, let's walk through the process starting with the first thing you're going to need a deposit. Most brokers and dealers require at least a 10% cash payment on a new or used boat, but a smaller deposit is usually enough to get the dealer to write the contract. Often the deposit is placed in an escrow account, but this is less common with private party sales.
Keep in mind that the dealer or broker may have a right to keep all or a portion of the deposit, if you or the buyer backs out of the deal without cause. As a buyer, you should include as many contingencies as necessary to protect your interests, including satisfactory survey and sea trial, clear title and the ability to obtain financing and insurance. On new boats, a written delivery date is crucial.
Using a loan to finance a new or used boat is a fairly straightforward process if you've got a good credit history and the 15% to 25% down payment needed. You may even want to pre-qualify for a loan before you go boat shopping to give yourself some extra leverage when it comes to negotiating prices with dealers or brokers.
On a new boat, the manufacturer's statement of origin certifies it has never had another retail owner, with used boats, lender's check for a clear title or record of ownership, in addition information about pending liens or unpaid debts may be reported in the County Court where the boat is kept or where the owner resides.
If you're trying to purchase the boat with a trade-in, dealers are often willing to apply the value of your trade-in boat against the cost of a new boat, but be aware that you will probably not get top dollar on the prize since dealers stick close to the maximum: buy low sell high.
In addition, dealers may scrutinize your old boat far more critically than a private buyer since part of their profit margin will be based on how easy a trade-in boat is to sell. With that in mind have your boat in top condition when you bring it into the dealer. In some states, you can even receive a tax benefit for trading your boat in. You do need to check with your state agency for more information.
Using these tips can help reduce the hassle of buying a new boat.