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How deep upside down are you in your boat loan and what are you going to do about it?
I called to get my pay off on my 03 290 coastal and I couldn't help but to laugh when they said I owed 92k. I would guesstimate I'm about 20k in the hole on this one. I put 30k on it when I first bought it and felt I was on par with the market values for a bit but then of course the market fell out. So what am I going to do...what can I do??
I played around with a mortgage calculator and figure that going into the 7th year of payments of the 20yr loan my interest is about 50% of the payment. The loan accrues $14 a day of interest and my current payment is $828 a month. My plan is to split the payments up into bi-weekly automatic payments along with bumping the amount up by $100 on each payment for a total of $1028 for the month. I have to call the lending agency to verify they'll accept the pre-payment to offset a balance of the interest accrual but..if this works...I would be taking steps to reduce the overall interest on the loan as well as pre-payment of the principal.
So just short of an act of god..i.e. I win the lottery or lightning bolt strikes the boat and it becomes the property of the insurance company I'll have to just take this one slow and steady to climb back out.
For those that bought with cash...good for you. I bought my little boat with cash too.
For those that have loans, what is your loan/debt situation like and what might you be doing?
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Wellcraft 290 Coastal twin F225
Hydra-Sports 20 CC F225
My boat when I purchased it sold for 195k in fact the guy in the room next to me was buying the same boat as me just a different color for sticker and I payed 129,999.00 and I thought I was good on the buy. I did put money down but unfortunately it all went towards the negative I had in my donzi that I was tadeing so I ended up financeing 147k after taxes and trailer. Now Ive only payed off 7 ot 8k and im being told the boat is worth around 75 to 80k on trade and 110 if im lucky on retail. I wanted to step up to a 38 fountain but unfortanetly my buisness needs to wait for the economy to turn so I can afford to come out of pocket.
With all the talk about foreclosures, the thought occurs that somebody give the boat back to the bank, then buy it at auction.... only half-kidding, here.
Quote:
Originally Posted by Oh Reely!
My boat when I purchased it sold for 195k in fact the guy in the room next to me was buying the same boat as me just a different color for sticker and I payed 129,999.00 and I thought I was good on the buy. I did put money down but unfortunately it all went towards the negative I had in my donzi that I was tadeing so I ended up financeing 147k after taxes and trailer. Now Ive only payed off 7 ot 8k and im being told the boat is worth around 75 to 80k on trade and 110 if im lucky on retail. I wanted to step up to a 38 fountain but unfortanetly my buisness needs to wait for the economy to turn so I can afford to come out of pocket.
Unless your trying to get out........................who cares?...............don't worry about it..................If you need to get out, then plan on writing a check at the closing......................Best thing you can do is forget about it and use it and have fun!
Its a bit like a gambling debt. You asked the house for a credit line. You played your chips and lost. Now you have to pay the house back even though you have nothing to show for it.
I had to come up with $12,000 out of pocket to get the title when I sold my Sea Fox back in 2004. Taught me a huge lesson. My current boat is 100% paid for, title in hand.
My boat was paid for a few years ago with a small personal loan. Minimum of $80/month, have had a $140/month automatic payment since the beginning.... Loan was for $6k (the bank minimum), boat ended up being $4k, I think my payoff right now is $2k. Figure the boat's worth about $6k once I finish re-wiring.
That's how you can own a boat as a full time student (I'm not anymore, but with a mortgage now I'm letting the boat payments continue instead of trying to just pay it off... $140/mo isn't too much to worry about)
A friend, who moved to the Philippines, tried to sell his pursuit for almost a year before he stopped making payments, after taking all his money out of the bank holding the loan. Bank finally took it about six months later. Worked out for him but he has no intention of moving back to the states anytime soon!
I don't think there is anything wrong with financing a boat, as long as you stay within your means. I am in the process of buying a new boat, which I will finance. I took out a 10 year loan and the payments will be about $400/month. My truck is paid for, my Ducati is paid for, and my wife's 09 Pathfinder is paid for.
I see nothing wrong with financing this boat, and I don't think $400/ month will kill me. When I first buy the new boat, the depreciation would put me a little underwater, even with 10% down. Although anything can happen to anyone at any time, I still feel this is relatively low risk.
Now if I still owed money on my old boat and I was rolling that debt forward into a 30 year boat loan, then yes I would feel that I was living beyond my means. I treat it like a car payment, and we don't like to have more than one car payment at a time, so no new cars until this boat is paid off.
Had I paid cash for the boat, that would have left my reserves a little lower than I would feel comfortable with. I feel that this would actually be riskier. Let's say I paid cash, and after the boat, slip sales tax, prep, rigging, etc I put out 50k. Now my savings accounts have been decimated. Then let's say I lose my job and still have a mortgage payment. I would go through my remaining savings rather quickly. But at least my boat is paid for, that I cannot even enjoy at this point.
If I financed the boat and have the same loss of income, that 50k still in the bank will take care of both my boat payment and my mortgage for over a year.
Why would I NOT finance it? My point is that sometimes financing makes sense, as long as you live within your means.
And despite the free-falling values of boats in general, some people still buy new...
Sorry in advance to the boat manufacturers...but in my opinion you'd need far more money than brains to buy a new (production) boat these days. The depreciation hit out the door is unjustifiable from a financial perspective.
A friend, who moved to the Philippines, tried to sell his pursuit for almost a year before he stopped making payments, after taking all his money out of the bank holding the loan. Bank finally took it about six months later. Worked out for him but he has no intention of moving back to the states anytime soon!
As the owner of a small business, my business has no debt because banks are loathe to lend money to small businesses.
So, I get a loan where I can for other things ... like boats!
I bought my boats used for a reasonable price ... did get a loan ... then performed the renovation with cash. End result is I could fire sale the boats for what I owe in a crunch.
The best news is ... when I don't owe too much, I'm less likely to want to sell. It's the big debt burden that can make the toy not so much fun anymore.
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1984 Bertram 54
1981 Bertram 28
Northport, ME
Chesapeake Bay, MD
I was thinking the same thing. If he couldn't sell his boat for a year, then he was most likely asking too much for it, so rather than doing the right thing, he walked away to let someone else clean up his mess.
For those that gripe that we have to jump through hoops for financing, and that we have to put down a large down payment or spend money on PMI for a house, it's because of people like that friend.
Unless your trying to get out........................who cares?...............don't worry about it..................If you need to get out, then plan on writing a check at the closing......................Best thing you can do is forget about it and use it and have fun!
My nephew was way, way under water on a boat and could no longer make the payments. The bank took the boat last week and will likely lose nearly $100k when it sells. What should he expect the bank to do to try and recover the loss ?? Has anyone else had this experience ?? What did your bank to to recoup the loss ??
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Cincinnati, OH
Boston Whaler 305 Conquest
A friend, who moved to the Philippines, tried to sell his pursuit for almost a year before he stopped making payments, after taking all his money out of the bank holding the loan. Bank finally took it about six months later. Worked out for him but he has no intention of moving back to the states anytime soon!
I think if I had a friend that did this, I wouldn't tell that story
Got no prob with boat loans, but I don't have any. If yer upside down, but hadn't planned to sell the boat, then no issue. If the opposite is true, well, then yer screwed...
CMP
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It takes a teachers' union to bankrupt a village
How deep upside down are you in your boat loan
(I'm not anymore, but with a mortgage now I'm letting the boat payments continue instead of trying to just pay it off... $140/mo isn't too much to worry about)
