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New Boat Build Equity Deposit?

Old 01-13-2021, 02:27 PM
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Default New Boat Build Equity Deposit?

Hi All,
Is it normal for a dealer to charge a 10% non-refundable equity deposit to order a new boat? My concern is after paying this deposit financing falling through, etc. and then being out 10k. My finances are in order, I have a large down payment but from deposit to build will be 4-5 months. Boat approvals are only good for 60 days..

Has anyone dealt with this before, is it normal?
Old 01-13-2021, 02:31 PM
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When I ordered 2 of my boats to be built (one in 2013 and again in 2016), both times I had to submit 10% deposit to order with my local dealer. I don't remember the language if it was non-refundable or not.
Old 01-13-2021, 02:31 PM
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100% non-refundable?

what exactly does the contract say?

post it up.

a deposit is normal, but usually refundable under several circumstances...
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Old 01-13-2021, 02:47 PM
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Ask your finance agent about extensions....
Get a home equity loan....

10 % not uncommon....some custom ordered vessels require additional payments at various stages of construction so that at vessel completion the builder has most of the money, with final payment at delivery. have your attorney review the contract language....maybe alter it to something you can both live with.

Maybe consider buying a boat off the lot to avoid the issue.....

The issue of finance isn't the only thing that could put your 10k at risk.....suppose your situation changes and you want out of the deal? I know a fella who lost his $35k down-payment on a deal he backed out on due to a serious health issue that popped up.
Old 01-13-2021, 02:56 PM
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Ordered my boat this past October. $1000 deposit to build. The deposit is refundable. I would be wary of 10% deposit. Unless your build is something crazy where the dealer would have a difficult time selling.
Old 01-13-2021, 03:01 PM
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you should always have out clauses for acts of god, war, financial hardship or lender changes. I would make sure you have an out in case anything in your situation changes in the near future
Old 01-13-2021, 03:02 PM
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Guess it depends what you’re building. How big, brand, how custom, etc. A bank could and probably would work with you depending what you’re doing. Never hurts to ask them and tell them the situation. As far as no refundable 10% deposit same as above, depends what you’re building. Imagine being the build of some big custom build and guy pulls out half way through and now you have a boat no one else may want, or have to put a lot of money to make something people would want.
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Old 01-13-2021, 03:27 PM
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This is not a crazy build and the total will be right around 114 with a trailer. It is a Dargel 250HDX. Frankly, the only options I am getting that they do not typically rig with are 12" Garmin, Radar, VHF and AutoPilot.

I could understand if this was some crazy build that they would have trouble selling but I feel like this boat would sell in short order if something happened to me.

The exact language in the contract is this: 'Custom ordered boats require a nonrefundable 10% nonrefundable equity payment to secure order.'

This is going to be a non-starter for me and I will try other dealers. I understand that custom orders will require a down payment, or even a payment to secure my build slot. However, putting up over 10k that I would never get back if I got sick, or my wife would not get if something happened to me is absurd, IMO.

Thank you all for the replies. This is the first time I will be ordering a boat, and I am not familiar with the process. I have had a boat or two since I was in my early 20's but could never afford exactly what I wanted, new. My lawyer has already told me not to sign this but he is not familiar with new boats either.
Old 01-13-2021, 03:33 PM
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Yes, this is normal if you are ordering a new boat. Put yourself in the dealer’s position. If you default they still have to take delivery of the boat from the manufacturer and have to find another buyer and need some protection in the event they have to hold the boat a while before they sell it.
Old 01-13-2021, 03:45 PM
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I would be careful. Not sure what kind of boat you are ordering but there are delays on engines, parts, etc.. You could easily put $10k out and not get the boat until after next season.
Old 01-13-2021, 04:08 PM
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Non refundable for a small boat is obscene. Wouldn't consider it.
Old 01-13-2021, 04:20 PM
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I see there are several used on the market and, apparently, a new one at marine max san antonio.....
Old 01-13-2021, 04:39 PM
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Order a CV $5k deposit.
Old 01-13-2021, 04:58 PM
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You’re an unsecured creditor. A lot of people on here don’t know what that means much less how a bankruptcy judge is going to redress your claim should the builder not perform.

If you’re buying a Sea Hunt for example I wouldn’t sweat it. For other builders, well, perhaps they need your “deposit” to finish someone else’s boat. You either accept that risk or deposit elsewhere.
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Old 01-13-2021, 05:05 PM
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I had to put down 5k on a 120K boat. They told me I could have it back if I didn’t want the boat when It arrived. They actually tried to talk me out of buying it because someone saw it and offered more. If you order something attractive they shouldn’t keep your money if the deal falls through.
Old 01-13-2021, 05:55 PM
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Marine Max does not actually have the boat in stock. That add is a touch misleading. I will call the builder tomorrow and see what they will offer. This language is from a Dargel dealer.
Old 01-13-2021, 06:00 PM
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Originally Posted by bryan281 View Post
Marine Max does not actually have the boat in stock. That add is a touch misleading. I will call the builder tomorrow and see what they will offer. This language is from a Dargel dealer.
Try to negotiate the contract deposit only refundable pending financing approval or something along those lines. If you've been approved already & they know it is only good for 60 days they know your credit score already & may be willing to work with you or not??
Old 01-14-2021, 02:31 AM
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Contracts are almost always negotiable. Give the dealer concrete examples of what you are worried about. For example, tell the dealer about your financing worries, maybe you lose your job, maybe someone gets sick (God forbid), and anything else you are reasonably worried about. Then, tweak the contract. You can include a proof requirement (bank rescinds loan offer in letter, you are on unemployment, doctor note, etc.). If dealer still says no, then move on as they are unreasonable.
Old 01-14-2021, 02:36 AM
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What's a Dargel?
Old 01-14-2021, 04:31 AM
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Going through this right now on a sub $100k boat. Dealer wants 10% to change an existing order they have coming up. They claim it’s fully refundable, but I haven’t seen the contract yet. Still deciding if I entertain that or not. I’m sure “fully refundable” has limitations. I understand their position to a point but this is not a custom manufacturer, this is a Robalo with a set price no negotiating...

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