Sail Cruising - Finance or Own Boat?

[David_Old_Jersey]

Originally Posted by gabilo

What does his boating history have to do with his posting? Where is he going to fast and need to slowdown?
He asked 2 questions and supplied the forum with basic background info related to his questions.

+1

On CF we tend to start by assuming that an OP on a thread is not a complete idiot , even though full life story not included with every question..........That does not always turn out to be the case - but we like to start that way .

[nimblemotors]

My opinion is pay cash for what you want.
Look at the interest you pay and see what it really costs to buy something.
A friend bought a new car with a 10 year loan, she paid a total of $40k for a $20k car.

I have a similiar view on insurance. If you can't afford to lose something, you can't afford to own it. Look at how much you pay in insurance over the time of ownership, to see what ownership really costs.

So look at what you have and what you can afford to lose, and buy a boat accordingly.

[Lespilot57]

What does OP stand for ?

[Rlrsalem]

Originally Posted by Lespilot57

What does OP stand for ?

Original poster

[Lespilot57]

Thank you

[Rocketman]

Originally Posted by nimblemotors

My opinion is pay cash for what you want.
Look at the interest you pay and see what it really costs to buy something.
A friend bought a new car with a 10 year loan, she paid a total of $40k for a $20k car.

I have a similiar view on insurance. If you can't afford to lose something, you can't afford to own it. Look at how much you pay in insurance over the time of ownership, to see what ownership really costs.

So look at what you have and what you can afford to lose, and buy a boat accordingly.

+1,

I bought my boat with a loan, but I had the money in the bank to buy it out right. Looking back, this was stupid.

In order to get a loan I had to look at newer boats, some of the boats that I was concidering were great boats but due to there age, no one would loan on them. Next I had to have full coverage insurance, which cost a lot. So now the cost of ownership is more. The insurance dictated where I could go and not go. More and more restrictions to live a carefree life style, is this realy what you want.

Experience does matter, try getting insurance on a boat when you have never done an ocean crossing. It's going to be very expensive or you can't get it. They will also now dictate who and what equipement you must have to do your trip.

In the end, I just paid the boat off, I am so much happier and now no one can tell me what I can do and can not due except fot the wife of course.

[Rocketman]

In my last post I ment to say:

Try getting insurance to do an ocean crossing when you have never done one before. Of course you will be able to get insurance if you are a low time sailior but try planning an ocean crossing with little or no experience. Most of the insurance companys willnot insure you.

[scoobert]

Originally Posted by cvick76

My wife and I are considering purchasing a sailboat and cruising the Caribbean for several years then possibly on to a pacific crossing and further. We are pricing boats in the $150K-$200K range. We are planning to sell everything at some point which will leave us roughly $350-400k to purchase the boat and fund this lengthy excursion. We are interested to know if fulltime cruisers are financing their boats in this situation. While we could pay in full, it would obviously leave us more cash by financing. The biggest downfall being the continued monthly payments vs. no payments. Would the interest rates eat us up? In addition, do lenders require cruisers insurance? We are just trying to get a feel for the way it is most often done when working on a modest budget.
Thanks,
Vick

dont finance, unless you finance by getting a loan on your home equity.

[OnTour]

Originally Posted by nimblemotors

My opinion is pay cash for what you want. Look at the interest you pay and see what it really costs to buy something. A friend bought a new car with a 10 year loan, she paid a total of $40k for a $20k car. I have a similiar view on insurance. If you can't afford to lose something, you can't afford to own it. Look at how much you pay in insurance over the time of ownership, to see what ownership really costs. So look at what you have and what you can afford to lose, and buy a boat accordingly.

You can finance a car for 10 years ?!? That's crazy!!

[Doodles]

Originally Posted by scoobert

dont finance, unless you finance by getting a loan on your home equity.

Why..?

[scoobert]

Originally Posted by Doodles

Why..?

home equity loans are the cheapest loans out there.
on a quarter of a million dollar boat, you will saves 10's of thousands on the interest.
my boat loan (on my powerboat) is at 6%, i have not found a much better rate.... but i guess if you have an 880 credit score....

[barnakiel]

Liability insurance is obligatory in some areas. It is such a minor cost that is not much worth discussion.

Full insurance is opted for by some cruisers but I know many long-term cruisers in older boats that sail far and beyond without - some out of their own choice, others because insurers ask wild money for insuring these boats and these sailing styles.

If you feel you need full insurance, you need it!

b.

[scoobert]

Originally Posted by barnakiel

Liability insurance is obligatory in some areas. It is such a minor cost that is not much worth discussion.

Full insurance is opted for by some cruisers but I know many long-term cruisers in older boats that sail far and beyond without - some out of their own choice, others because insurers ask wild money for insuring these boats and these sailing styles.

If you feel you need full insurance, you need it!

b.

i didn't find the price quote that crazy, on $120,000 value full coverage they quoted me $3000 =/- 500

thats not taking into account the survey they all want.

[barnakiel]

Originally Posted by scoobert

i didn't find the price quote that crazy, on $120,000 value full coverage they quoted me $3000 =/- 500

thats not taking into account the survey they all want.

You found a great insurer then.

Our boat value 10.000 monetary units. Quote from insurance broker +500 units p.a., and NOT to cover blue water passages. Sure, we have a 30 y.o. boat that is going to disintegrate pretty soon.

When that broker implicitly stated that I have 5% chance of sinking my boat it did make me feel like I do not want to deal with them anymore ;-)

As the boats gets bigger, the percentage yields a possibly important boat item - new seacocks, a new sail, new standing rigging ... So, when it is either or you are basically done. When you can have both, you count yourself lucky and go for the insurance.

There is plenty of psychology involved in selling and needing insurance methinks.

b.

[scoobert]

Originally Posted by barnakiel

You found a great insurer then.


b.

that was for east coast and carib.