Initial costs

[hyperope]

I am looking at purchasing a boat to go cruising in 4 years. But want to procure the boat sooner so I can become familiar with it before I spend much of my cruising time learning all the systems, doing maintenance and refit, and learning the quirks of the boat. With that said, I plan to finance a $100,000 boat. My credit Union will finance it (pending valuation; they state age of the boat is irrelevant to them) putting 20% $20,000 down. Because I live in Georgia and will register it here, I am assuming I will pay Georgia State tax on it. I am trying to budget for that initial chunk of cash. Right now, if we assume the boat needs no immediate work for it to be sea worthy, I see $20,000 down payment, $7,000 tax, $2,000 survey, $3,000 for extra expenses like insurance, registration, diesel to take it from Florida to Savannah, GA, initial dockage, etc. for a grand total initial cost of $32,000. Does this seem realistic? Is there anything else I'm missing?

[travellerw]

Originally Posted by hyperope

Right now, if we assume the boat needs no immediate work for it to be sea worthy

Hhhmm.. I won't say that a boat like that doesn't exist.... BUT... What the PO thinks is seaworthy and what you think is seaworthy are 2 different things.. I would add at least $3000-$4000 for "upgrades" after purchase.

[hyperope]

Guess I didn't clarify very well. Will have a good cash flow after the purchase and plan to do upgrades, refits, maintenance in time. Just trying to get an idea of the figure I'll need when I sign the papers. When I say seaworthy, I mean in good enough condition to safely travel to my home port without fear of a significant system failure that would jeopardize the boat.

[Greenhand]

What initial fees are associated with the loan or will they be rolled into the loan amount?

While it may not need much to be sea worthy, folks don't tend to do things like update the bottom paint on a new boat.

If you are planning on buying away from home, you will also have travel costs, probably multiple times to find the one you want and go back for the survey and sea trial.

Why not save for an extra year or two and buy the boat outright? That would come to an extra $10k in interest, plus the maintenance and docking for those years, to add to your cruising kitty.

[hyperope]

Thanks all. Initial plan was to pay cash. Now plan to finance very short term, instead. We sail infrequently as I hate spending my money chartering other people's boats. We need more experience. Getting pretty good with Beneteaus and Jeanneaus that are clean and pretty and running flawlessly. But I want something more stout, that I can get my hands dirty and really learn about it. Am willing to trade the cost of one BVI/SVI charter for the $$ interest while getting experience on MY boat. I'm getting old (49), and am willing to trade some money for time. Don't want to wait until my mini-retirement starts and waste that time fixing the boat and learning about it. Want to be confidently cruising in 4 years. Loan fees are not something I accounted for. In my days, I have purchased 2 homes and many cars. Is large boat loan more similar to a mortgage or car loan? I'm sure that will vary among lenders, just wanting a general idea.

[zboss]

Originally Posted by hyperope

When I say seaworthy, I mean in good enough condition to safely travel to my home port without fear of a significant system failure that would jeopardize the boat.

That's really the only type of boat you should consider buying!

I think your budget seems just fine.

[Oceanghost]

Most banks want give a loan to a boat older than seven years. If the boat your looking at is older that seven years you will have to look at other means of financing such as a home equity loan.


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[WindwardPrinces]

Don't forget carrying costs.

It's not just the loan, but the slip fees, maintenance, registration, etc.

It adds up.

[hyperope]

Yep. I have budgeted $40,000 for down payment, survey, registration, tax, initial dockage and extras. I have increased my "extras" budget. Assuming $100K boat, $20,000 down payment, $7500 tax and registration $$1000 initial dockage and insurance payment, $3000 delivery (maybe zero if I get a boat closer to home. Then the "extras". Maintenance and ancillaries will be no problem as I have good cash flow to handle them. Do not want to wait another 2 years to pay cash. I want to start sailing my own boat instead of chartering. Also, doing boat work helps me lose weight by being active and having fun. I have found several sources for financing an older boat and have received several insurance quotes for a 33 year old boat, which was a challenge. Because I have a good bit of equity in the house, have lived here for 13 years and have a stable, good-paying job, and excellent credit, I have found several sources that will finance an older boat. Am on track to purchase in June. Have the search down to 2 boats; I have already seen one. Going to see the other one in January. My research and planning for this started 5 years ago. Boat shows, magazines, internet forums like this. It has been a painstaking process, made more difficult not living near the ocean. I am very excited for what the next few months hold. I Will update my progress. Thanks.