Boat / motor finance

[MORFIN]

Hi all , any good advice on finance or financeres would be appreciated.

PETE MATE

[PinHead]

best way - pay cash

[manchild]

Advice?Dont do it ;)save up some money and buy what you can afford ,youll be much more relaxed.
cheers
George

[manchild]

Greg beat me to it again ;D

[FNQCairns]

I have sat and done my sums but am far from a financier, based on a house I bought 20 years ago (cost) and that same house today (cost)which I no longer own and based on the job (gross amount)I had then and if I had the same job today (gross amount), I get an equivalent interest rate of 22% or a bit more today - apples for apples, then to now.

So that means real wages have not even kept up with just the increase in the cost of housing over 20years as related to my past experience, forget food, medicine actually EVERYTHING else I can think of just pushes the cost of living deeper into the red - then to now.

Saving up today is one hell of a hard proposition compared to the past IMO.

What I have done/doing is save hard -very hard!!! and am buying each major component separately hull/motor, straight up a saving of near 30% over ready bought but there is time and effort involved.

Another way is to buy secondhand at 2 years where the new owner has to eat the depreciation, a person could consider a personal loan for this as the unit retains some relative value over the next 5 years or so years, but buying new on a personal loan (say) with depreciation makes for wacky money IMO, can you tag onto your existing housing loan (if you have one) that is sometime best.

Sadly the more money you have the cheaper it is to live, good luck.

cheers fnq

[Ron173]

I think if you can afford the payments comfortably then why not.

You can save and save, whilst not having fun of boat, and you could get run over before you buy it.

Also it will have gone up in price a lot if youve saved for a few years, plus your savings are just like a payment except you have no boat to enjoy for it.

We have always financed a part of our boats.

Doing it on your house is not a bad idea if you can religiously up your mortgage payments.

The trouble is that its not essential to overpay, and often people have the extra thousands on their mortgage 10yrs down track, and costs more in interest.

IMO its best to get a fixed committed payment then you have a date it has to and will be paid by.

Brokers are good to start off, finlease in Sydney deal with about 20 finance houses.

Rgds

Ron

[Roughasguts]

I think the best thing is don't buy new, buy 2-5 years old boat.
Only borrow 70% of the value of the boat, pay the other 30% with your savings.
At least then in two years time, your boat will be worth more than the pay out figure.

Something to consider as I find i'm going backwards financially, compared to 5 years ago I was going forward, same base income heaps more living exspenses.

First thing to go when you get in to strife, most likely will be the boat.
You don't wan't to owe more on the boat, than what it's worth.

[leezor]

I just financed my new outboard through Esanda. I own the boat and decided why the bloody hell not!
Considered buying a second hand late model donk but opted for the security of warranty.

Own both my cars, (not that they are all that flash) have an average mortgage and have just bought an investment property so have some good debt aswell.

If you went out tomorrow and bought a brand new Commodore, no one would think twice. But when you mention a boat, people seem to think about finance differently.

It all comes down to how comfortable you are with debt and how secure your income is.

my 2c

[Ron173]

Leezor,

gotta agree.

As long as your not stretching the payments, why the heck not.

Enjoy it now if you can afford it, and also...................................

He who dies with the most toys wins!!

Ron

[darkside]

if you can afford the repayments and can buy new , just do it , there is something special about buying something new , think of the confidence you will have in the motor and remember that ancient old boaters proverb " the poor man always pays twice! " . good luck and enjoy it !!!

[troy]

Lessor,
Mate if you need to finance your boat go for it as long as you can afford the repayments.
I am not ashamed to admit i purchased my boat under finance and i went through Finlease.
I am happy for the ones that can pay cash for there boats but i am not one that was in that financial position.
Most people borrow mate end of story.
Troy

[charleville]

Saving up today is one hell of a hard proposition compared to the past IMO



Obviously not said by a a person who was starting out in life buying a house etc in the early 1970's when inflation was rampant or in the 1980's when housing interest rates went to 17% and when one's wife was more than likely to be a stay-at-home-wife looking after the kids.

Nah - I look at the interest rates on loans these days, coupled with the absolutely low price of consumer products, TVs, appliances, tools etc and I say to myself that there has never been a richer time in history for the average working person.

I will conceded that low interest rates and home owners grants ( I never got one of these) plus that oddity of the era, childcare (we were DIY in this regard) can make life a little expensive if you don't discipline yourself.

The secret to financial management is discipline. I am with the guys who have said to save the dough and buy for cash.


Your choice, though, of course. Good luck. :) :) :)

[marlinqld]

I financed my boat purchase alst year.

Paid $19,000.00 for her.

A couple of things though:

1/ #Have a good size deposit. I had 30% deposit. Gives you a large equity in the boat. Should the sh!te hit the fan, at least you will get a bit more than your loan payout should you have to sell it.

2/ Shop around. Like all consumables goods, interest rates are negotiable. they can and do vary by a good deal from institution to institution.

3/ #Buy what you can afford. Set your purchase and monthly payment limits and stick to them. Dont let emotion or a great looking boat put you over your comfort/safety limits

4/ Enjoy!!!!!!! get out on the water and enjoy your purchase....dont buy it and let it sit in the garage.

Oh yeah, dont forget some good insurance, which if you finance the boat will be mandatory anwyay.


Mike

[finga64]

Pete, the best thing to do is your research.
Look around and get the best boat deal you can find first up. Tell the dealer up front give me your best price because I ain't coming back to haggle.
I always name the other dealers I'm getting a price from or looking at just to tell them your fair dinkum.
Don't think about going into a boat yard and ask for finance.
There's some respectable finance companies about so let your fingers do the walking.
A mate told me Aussie boat loans isn't too bad but you'll have to decide that for yourself.

Look at the repayment ask yourself 'can I really do this', and personally, I double the repayments to see if I can afford that. If no then I can't really afford it if yes then I pay the double repayments just in case something goes adrift and I have a bit of safety barrier in place.

Personally I wouldn't buy new. There are some really well kept boats out there that are 2 or so years old.

I wouldn't buy from a boat yard either if I was looking at second hand. Look at the trading post and the papers. Bargains to be had if your patient. Don't be afraid the haggle. No harm in offering a price. The worst they can do is say NO ;D
The cook hates going shopping with me...she thinks I'm embarrassing sometimes :(
And, personally for a boat I wouldn't buy it but it unless I had the cash in my pocket. The same goes for my cars.
I only have two loans. Both for houses.
Got a few toys though :)

But if you want to borrow, do the research and if you can do it comfortably then go for it.
And then don't forget to use the bloody thing ;D

[MORFIN]

Thanks for all the posts guys keep them coming please. It seems that paying as much in cash seems the way to go as I still need to borrow the rest.

PETE MATE

[choppa]

i see pinhead is still waving the ""pay cash" flag,,,, ;D

pete mate,, have a read through this thread

http://www.ausfish.com.au/forum/YaBB.cgi?num=1162502258

it was started by poodroo on a query on depreciation,,, and my input comes from the experience that i've got in being involved in the finance industry which spans over 20 yrs

even though the thread is relevant to ""cars"",,,,any depreciative asset has the same outcome

its funny to see and still hear the infamous words,,,,""pay cash""",, my old man used to drill that into us kids years ago,,, but in reality over 90% of buyers finance,,,,and why wouldn't you

interest rates now,,,(depending on lender) can be around 7.95%,,,for some one with asset backing and credit history,,,

finance 20 grand over a 5 yr term straight out,,,that equates to less than 90/week,,,,structure the loan and its even less,,

but don't just shop around for the best boat/motor to buy,,,, shop for the finance as well,,,under the Uniform Credit Code, almost all lenders are on par with rates,,,its the fees and charges that are incorporated with the loan that add up

prime example,,,,,,1 leading lender is currently quoting low 7's as there rate,,,,this is true,,,, what they don't tell you is that the monthly repayment has a standard charge of $3/month on top,,$1.50 extra for direct debit access, (which is mandatory on there loans),,statement fees per quarter etc etc etc,,,so there ""comparasion"" rate equates to over 10.15% at the end of the loan

LEEZOR,,, good choice with your financier,,,,i've been with them for over 8 yrs now and use them as our prime lender,,,no additional fees,,no fixed repayment method,,no charges on statements,,,just a good old fashioned monthly repayment until you pay it out

choppa

[PinHead]

choppa..I like the pay cash principle for one simple reason...if I get ill or have an accident and cannot work (have insurance but that is another issue) I know I own everything and have no monthly commitments to make..therefore I do not have to worry about finding the money for these..I know that some loans have insurance built into them..I prefer the peace of mind. The same applies to running my business...I do not use accounts...I pay for all materials at time of purchase..less hassle and if someone does not pay me...as happened last year ($14k) then I can survive same as everything is already paid for...called peace of mind for me.

[Chimo]

Hi Morfin Pete

When shopping for boats , cars, houses etc I always dress as if I have or are just going fishing, actually dress as before you go fishing ;) you don't want to smell. ;)

Then test the sellers reaction to you, not necessarily your appearance.

If they are rude and don't want to know you; and take your business, then go somewhere else where you will be appreciated.

Who is doing who favours here?

Then drive a fair deal; don't screw them or let them screw you either for the product or the finance, if your comfortable and confident to go that way.

Fishermen dragging expensive toys behind expensive 4WDs go to a lot of trouble to look like bums. When it comes to doing business it sorts the wheat from the chaff too.

Also, the best debt is good debt, if you don't need the other then why have it?

Cheers

Chimo

[finga64]

Hi Morfin # Pete

When shopping for boats , cars, houses etc I always dress as if I have or are just going fishing, actually dress as before you go fishing ;) you don't want to smell. # ;)

Then test the sellers reaction to you, not necessarily your appearance. #

If they are rude and don't want to know you; and take your business, then go somewhere else where you will be appreciated. #

Cheers

Chimo
;D ;D ;D
Many years ago when I was in Warwick I came down to Brisbane to go fishing (I believe it was with scalem) I wanted a TV unit and they had them at super a-fart (they wasn't one in Warwick then). I went AFTER fishing and nobody wanted to know me. Don't know why???
After a considerable time I just stood in the middle of the floor and took out and waved the role of $100 bills I had to buy it with and yelled out "who wants to serve me now" and the assistances they come running ;D ;D. Lucky for them I really wanted that unit or I would have walked after they all come running.
The look on their faces when I tried the lounges and beds in the stinky old fishing cobber was pretty funny but I thought stuff it I deserved that after nobody wanting to know me to start with.

[theoldlegend]

Sooooo Choppa,

You're tied up with the finance industry eh?? :P

Mate, what I want is an interest free, non repayable loan so I can buy a boat big enough for me and the Breaka Girls to go cavorting on. ;D

Let me know what you come up with. :P


TOL

[Chimo]

Hey TOL

That could be done but it would take a bit of time and a couple of steps the initial ones involving neg. geared real estate financed on interest only with tenants help followed by capital realization after growth and theres your fully paid for boat :) #
QED

Cheers

Chimo

PS you also need a partner who will let you put the proceeds into a boat afterwards. :-X;)

[charleville]

choppa..I like the pay cash principle for one simple reason...if I get ill or have an accident and cannot work (have insurance but that is another issue) I know I own everything and have no monthly commitments to make..therefore I do not have to worry about finding the money for these.



I think that there are two parallel but separate issues being debated here between choppa and pinhead.

Choppa is talking about cost effectiveness. #Pinhead is talking about cash flow.

It is an old trusism of business that businesses are less likely to fail because they are not #profitable than if they have run into cash flow problems.

That is, if interest rates go up, or they have #margin calls on equity investments, or the bank decides to stop extending credit for any reason at all, or .... then they just cannot pay tgheir monthly bills, including their staff's wages, and they fold.

Choppa has twenty years of good experience in the finance industry and obviously understands how to screw a good deal using the rules. #

Pinhead, however, probably recalls the ups and downs of the financial markets going all the way back to the 1961 Credit Sqeeze, and the crashes of Tasman Building Society and the cash runs on Metropolitan building society in 1974 #(when people were queuing for hundreds of metres outside the branches to get in to get their money out, the inflation of the seventies, the rise of interest rates to 17% in the eighties, "the recession that we had to have", #the Asian economic crisis, the HIH collapse, the Bell Resources, issues, the collapse of lot sof high profile business such as "The Carphone Group" in Queensland, Ansett, Harris Scarfe, #"OneTel", Qintex, Compass AIrlines (versions 1 & 2) etc, all of which had creditors.

It is a case of whether you want to bet on steady state conditions going forward or hedge against catastrophe in the finance market, the employment market, trusted business entities going belly up etc.

[wayne_cook]

m8 u don't need much money to buy a goode second hand unit but for the best deal u need cash!!
for instance last week in the trading post there was a stern drive milligan for 13k
another one boat and trailer 2k(no donk) there out there u just have to look!
I considered buying just to resell but room is a problem.

volvo penta has a deal on for 3.something% for replacement motors that finishes around christmas how cheap is that.

[wessel]

Be realistic when doing the calculations. So many people stretch themselves to the absolute limit when they finance a new toy, that they forget things like insurance, maintenance, alterations, running costs etc.

Count on an additional 10% of purchase price for "the little things" i.e life jackets, new anchor rope, first aid kit, fire extinguisher and flare that is out of date, additional or replacement trailer wheels etc.

Things break on a boat, and when they do break they cost a lot of money - but you already know that.

Wessel