NEED HELP WITH FUNDING...EXCELLENT CREDIT

[TwinkleD]

I have excellent credit, make good money but the boat can't be found using NADA or BUCvalue and no one is willing to lend me money.

I'm attempting to buy a 2001 Charter Cat, Wildcat 35. Looking to finance $100,000 ...

Can anyone please recommend someone?

Thank you!!!!


Aimee

[rw58ph]

Originally Posted by TwinkleD

I have excellent credit, make good money but the boat can't be found using NADA or BUCvalue and no one is willing to lend me money.

I'm attempting to buy a 2001 Charter Cat, Wildcat 35. Looking to finance $100,000 ...

Can anyone please recommend someone?

Thank you!!!!


Aimee

I would first have a survey done which would include an estimated value of comparable boats. There are many old boat out there that the mfg is no longer in business or very few left. The Eagle is a 1978 RoughWater with only 5 left in the world, so there is not direct comparison. However, for insurance and financing purposes have the boat surveyed. Moat bank/finance has a preferred surveyor list which helps getting finance if you use one on the list.

Also the banks/finance want a significant down payment, 20%+ and/or other assets to show you are worth the loan, so its not just credit alone.

[denverd0n]

In case you don't know, cross-posting in multiple sub-forums is consider very poor netiquette.

[captainjay]

The bank is doing you a favor find a different boat.
Jay

[MBLittle]

Originally Posted by captainjay

The bank is doing you a favor find a different boat. Jay

What's wrong with a Wildcat 350?

[avb3]

Originally Posted by MBLittle

What's wrong with a Wildcat 350?

You may want to read the Bumfuzzles blog. Serious issues with delamination.

[jkindredpdx]

Save money liquidate assets and pay cash... When you find the right boat. BTW, they don't have to cost $100k IMO.

[MBLittle]

Originally Posted by avb3

You may want to read the Bumfuzzles blog. Serious issues with delamination.

Personally, I don't believe a single word in the bumfuzzle blog

[TwinkleD]

Survey came in 15% more than asking. I'm putting down 30%

[GordMay]

Greetings and welcome aboard the CF, Aimee.

[belizesailor]

Originally Posted by avb3

You may want to read the Bumfuzzles blog. Serious issues with delamination.

One very overhyped blog, about 1 boat, by inexperienced owners...who in the end liked the boat that carried them safely across the Pacific. Many experienced and happy W35 and Jag 35 owners.

Charter Cats did have wildy varying quality of build issues, so survey carefully, but they built some good boats too.

Re financing. My 2c is that a boat, any boat, is almost 100% certain to be a bad financial decision, so why make it worse by financing it? If you plan to work the boat in charter (and the W35 is a good charter layout) thus producing income and potentially being able to take depreciation then it makes marginally more sense.

[belizesailor]

Originally Posted by jkindredpdx

Save money liquidate assets and pay cash... When you find the right boat. BTW, they don't have to cost $100k IMO.

+1. Cash is King, especially when a depreciating, non profit producing asset is involved. Certainly on par with another common bad practice...financing a car.

[wanderlust42]

Hi everyone, I've been a longtime lurker/knowledge absorber on CF as I prepare for the next phase in my life . . . which will hopefully involve breaking my ties with a land-based life, buying a sailing home, and cruising around indefinitely until the time ever comes for something different.

So, with my very first post, I'd like to challenge some conventional wisdom that I often see repeated but I personally haven't ever been able to accept as true--and that is the notion that it is generally not a good financial practice to finance the purchase of a boat. The common advice is to pay cash for a depreciating, non-profit producing asset.

But in today's low interest rate environment, coupled with a US tax deduction for interest paid on a boat loan if it's also your home, it seems to me that putting 20-25% down and then financing the remainder at a low fixed interest rate can be a financially prudent decision if you take the other 75-80% of the cash that you would have used to purchase the boat and put it to work in other investments. Basically, if you can achieve a higher rate of return on your investments than the after-tax interest rate you are paying on the boat loan . . . then why wouldn't you finance? Depreciation doesn't answer that question . . . you'll incur the same depreciation on the boat under either scenario.

What am I missing? I'll be faced with a decision in a couple of years to pay cash or finance a used ~45' catamaran in the $400k-$600k range and I just can't see why in the world I would plunk down 100% cash up front instead of leveraging 75-80% of that amount over the term of a 10-20 year boat loan.

Thanks in advance for your thoughtful responses!

[Sam Plan B]

The basic problem is this. It is nearly impossible to get financing on a boat over 10 years old. You need to have some kind of collateral against which to borrow. That can be realestate or a mutual fund, for example. You will be limited to about 30% of your equity position. I had about $100,000 in an equities mutual fund. It was no problem borrowing $25,000 to buy my boat. If you don't have something like that available you will have to stop shaving. The money you save on razor blades will pile up quickly.

[Capt.Alex]

Originally Posted by Sam Plan B

The basic problem is this. It is nearly impossible to get financing on a boat over 10 years old. You need to have some kind of collateral against which to borrow. That can be realestate or a mutual fund, for example. You will be limited to about 30% of your equity. I had about $100,000 in an equities mutual fund. It was no problem borrowing $25,000 to buy my boat. If you don't have something like that available you will have to stop shaving. The money you save on razor blades will pile up quickly.

Not true. I had no problem financing my 16 year old Hylas. A well maintained quality vessel with a good survey can be easily financed with good credit and 20% down payment.
I agree with the OP 's premise. My funds are returning more in the market than the 4% interest rate I'm paying on my boat loan. Another factor to consider- In the unlikely event of a catastrophic loss to the vessel, I won't have nearly as much at stake to fight with the insurance company over. The bank has a whole stable full of attorneys to do battle with the insurer. Let Goliath fight it out with Goliath. The bulk of my assets will still be safely locked inside my bank.