In the market for a used 280, any feedback on price...

[BrentJones]

If all of the little stuff doesn't eat up your $10k, then taxes, registration and titling will. I don't know what other payed in tax, but in NYC it's 8.25%. That's nearly 10% of the cost of the boat. I wanted to personally kill 9 of the 10 people working at the DMV, the 10th was cute.

When you document your boat with the Coast Guard, don't you just pay a fee and a "in lieu of tax?"

 

[comsnark]

One thing to consider or not to consider is a home equity loan. If i'm not mistaken, If you take out a home equity loan and buy a boat with it, your home is now tied to the boat and visa versa. could be wrong though.

The 280 does qualify as a second home.

Also, you don't want to get upside down on the boat, put down enough and make your payments big enough to stay ahead of depreciation. The last thing you want to do if you sell your boat is write a check to cover the difference.

I don't think a home equity line will tie the boat to the house.

You can take a home equity loan and take the money to Atlantic City if you want. . you have no restrictions.

So if you SELL the boat, you still will owe the home equity loan to pay. If the boat SINKS, and the insurance doesn't pay up, you still owe the home equity loan.

If you take a loan on the boat, and the the boat SINKS: You still owe the boat loan. But in that case, you have the option to default the loan and ruin your credit WITH NO RISK TO THE HOUSE. The fun part would be watching the loan guys try to repossess the boat.

___________________

Regarding being "upside down" on a boat: I never understand this term either for cars or boats.

Let's say you buy a $100K boat, with a $90K loan. After one year, the boat is worth $80K, and you still owe $85K. Some say because you owe $5K more than the sales price you are "upside down". Presumably, you are in the hole $5K.

I say you are in the hole $25K -> Because last year you had $100K. Now you have $80K. If you had invested the $100K, you would now have $105K. $105-$80 = $25. And this excludes maintenance costs.

Bottom line: Boats are not investments. They are expenses. Don't put any money into a boat that you will need 5 years from now for something else.

 

[poormonkey]

Well, I called Scott Financial, Key Bank, and a local credit union. It appears all can offer 6.99% on a 20 year loan. If the borrowed amount is between $75k to $150k. It appears rates aren't too attractive any more like the 6.5% that I have seen on some of their websites. Anyone know of anyone else I might try to get a great rate at? Most places they want all your paper work before you can even get a rate quoted. However, I am just looking for what the best rate could be based upon good credit rating and our credit to debit ratio....

 

[BrentJones]

Well, I called Scott Financial, Key Bank, and a local credit union. It appears all can offer 6.99% on a 20 year loan. If the borrowed amount is between $75k to $150k. It appears rates aren't too attractive any more like the 6.5% that I have seen on some of their websites. Anyone know of anyone else I might try to get a great rate at? Most places they want all your paper work before you can even get a rate quoted. However, I am just looking for what the best rate could be based upon good credit rating and our credit to debit ratio....

6.99% seems like a decent rate considering where interest rates have been lately. I've heard a lot of great things about Scott and Key on this board. I will probably have one of them do my next loan. How much are they requiring down?

 

[poormonkey]

The 6.99% is zero down. If you put 15% down, you can get as of today 6.75%

 

[BrentJones]

The 6.99% is zero down. If you put 15% down, you can get as of today 6.75%

Hmmm, I wonder how that would work. Say you buy a boat for 75k. If you fiance that for 20 years, zero down at 6.99%, your payment would be $581. Now say you want to put 15% down, that puts your loan amount at $63,750. I wonder what their interest rate would be for that, usually the lower amount financed has a higher interest rate, like you said, 75k threshold. So does that 6.75% interest rate apply? You probably would have to have a term of no more than 15 years too?

 

[poormonkey]

From Scott Financial it was 6.75% for 15% down or 6.99% for 0 down, and that was both for 20 years and if you borrowed $75k or more. Keybank was 6.99% at 15 years and that was from 0 to 10% down, and that depends on credit scores, etc.....
I think they realize that most people don't mind paying the interest over a long term because of the benefit of the 2nd home write off.
You can always go with a 20 year, get the lower paymens and make principal payments along the way, so that the loan never goes 20 years.

 

[comsnark]

75K, 6.99%, 20 year = $581 per month
64K, 6.75%, 20 year = $485 per month (12K upfront)
64K, 6.75%, 15 year = $569 per month (12K upfront)

Hmmm. . .I think that people do the 20 year loan because they are fixated on the lower monthly cost, not the total cost of the loan.

I guess a 20 year boat loan is no different than a 40 year house mortgage. You never pay it off. Either you default, or pay it off early. Certainly, the thought of keeping the boat 20 years is ridiculous.

How many people on this board are upgrading every 2 years?

My instinct would be to avoid the monthly bill and drain the savings account. . . but I am atypical. (and could not afford a $75K boat). I suspect for a depreciating asset, you want to eliminate the loan as quick as possible; but the bottom line is "what else would you do with any money you save". With 12% investment returns. .typically you want to maximize the loan. With 3% returns. . .you want to minimize the loan.

______________

Side note: Having a second mortgage or a home equity loan does not help once you start hitting AMT limits. . .

 

[poormonkey]

Well my gut feeling on us still being able to pull the trigger on the new 2005 280 with warranty and buying it, well it doesn't look good. Our friend at the dealer needs to move this boat, and he doesn't have the time to give us a month or two, to come up with a hefty down payment, so we aren't borrowing the entire amount with a loan. It is a nice deal, but there comes a time when you just have to take a reality check and say, is it smart to have a $700 plus boat loan a month. So, I am going to start looking hard into either a 2002 280 or perhaps something 1997-1999 290. I hate to walk from this one, but when you don't have the large cash deposit to put down, it just doesn't look good. :smt089
If we go with something older, we will have the bugdet as well not to sit at the dock when we go to the boat, we can actually use it. So, there is a plus side. :smt038

 

[comsnark]

Poor monkey;

There are times to become cash poor. . .and times not be become cash poor.

Investing in a house and becoming cash poor is sometimes the way to go. . if the market is going up and you need a place to live.

But it is NEVER a good idea to be cash poor with a boat. Boats are money pits. There are times when you have to HEMMORAGE money when you are boating. To buy a new boat is *nice* but the high cost option.

Don't listen to salesmen regarding maintenance costs: Annual maintenance is not cheap. If you do the annual maintenance, the "unexpected" maintenance won't be bad. Won't make the flip the overall costs.

Last year, I bought a 1997 boat. That was about 5 years older than I wanted. BUT. . it was the RIGHT boat. And the price was right. SURE I have had some maintenance issues. But The mid-season stupid unexpected maintenance has not exceed the expected planned maintenance.

And I have money left over for upgrades :thumbsup:

 

[poormonkey]

comsnark....

I really do hear ya, and know what you talking about. I guess the frustration part is finding that "right" used boat. My wife jokes with me, but I probably spend 2 hours a day looking online at used boats. I would love to find a nice 1997-1999 w T-5.7 and gene with low hours on it. But, I suppose everyone else is looking for that boat to... :thumbsup:

We have a $40k in a stock, but we really don't want to cash that in for a boat. So, back to the drawing board and onto searching for a nice used 1997-1999 290 <=That year and model seems to be the closest to the newer 2002-2005 280....

 

[thomas]

Poormonkey,
Don't be to hard on yourself. There are many NICE used boats on the market today that won't break the bank.
As I mentioned before, I feel 2007 and 2008 for sure will be a buyers market.

The new 2005 280 is a great deal. Being in the marine business myself, I know how your friend feels holding on to a new 2005 boat. Interest on floor plans can be VERY EXPENSIVE.

 

[poormonkey]

Does anyone think the T-4.3 in the 1998-1999 290 were not enough motor? I see you could step up to the T-5.7 if you wanted more power. Anyone have an opinion on this?

I noticed in 1997 the T-4.3 were the largest you could go. Then in 1998 you could step it up to the T5.7. Didn't they add a lot of weight to the 290 between 1997 and 1998?

 

[BrentJones]

75K, 6.99%, 20 year = $581 per month
64K, 6.75%, 20 year = $485 per month (12K upfront)
64K, 6.75%, 15 year = $569 per month (12K upfront)

Hmmm. . .I think that people do the 20 year loan because they are fixated on the lower monthly cost, not the total cost of the loan.

I guess a 20 year boat loan is no different than a 40 year house mortgage. You never pay it off. Either you default, or pay it off early. Certainly, the thought of keeping the boat 20 years is ridiculous.

How many people on this board are upgrading every 2 years?

My instinct would be to avoid the monthly bill and drain the savings account. . . but I am atypical. (and could not afford a $75K boat). I suspect for a depreciating asset, you want to eliminate the loan as quick as possible; but the bottom line is "what else would you do with any money you save". With 12% investment returns. .typically you want to maximize the loan. With 3% returns. . .you want to minimize the loan.

______________

Side note: Having a second mortgage or a home equity loan does not help once you start hitting AMT limits. . .

I look at a boat loan like a car lease. Usually people lease cars because they know they will be moving on to something else in 2-3 years and accept that they will always have a loan. And of course there are people who lease for business purposes. I don't know of too many people who own a 30' cruiser and don't have a loan. I don't know anyone except for those my parent's age who have a home that they don't have a loan on. So, I don't think there is anything wrong with a 20 year loan on a 30'+ cruiser, but I wouldn't compare it to a 40 year house loan. I know a lot of boat owners with a 20 year loan, I don't know of anyone who has done a 40 year home loan and I sell homes. This also goes into putting money down. In my opinion, put as little down as possible, but understand that you will have to keep up with depreciation. What's the difference in putting money down when you buy a boat, or when you sell that boat. Either way you will have to write a check. I'd rather hold on to my money and let it work for me. The goal is to keep up with depreciation, that is important to understand. So if you do a 20 year loan, try to pay extra per month, but when things are tight, you can pay less. Put money down at the beginning, or put it down at the end. Just know that you will have to put it down.

 

[Bridog]

Either way you will have to write a check. I'd rather hold on to my money and let it work for me. The goal is to keep up with depreciation, that is important to understand. So if you do a 20 year loan, try to pay extra per month, but when things are tight, you can pay less. Put money down at the beginning, or put it down at the end. Just know that you will have to put it down.

Brent that makes perfect sense. :thumbsup: You forgot one thing. Once you buy a bigger boat you will not have any money left.....period!! So... you will not have money "working for you", you wont be able to pay extra or will you be able to write that check later. The only thing you will have is a boat with a very large loan :smt043 Good luck, Brian

 

[fwebster]

I guess you guys are going to have to educate me........and this is probably going to start something, but I always figured that the debt service on leased autos, a 40 year mortgage, and a 20+ year boat loan eats such a big hole in your income that you have a hard time accumulating anything.

I've always just saved up until I could pay cash and did some investing and it worked for me........I retired at 44, drive a Lexus and have a decent boat.

What am I missing?

 

[BrentJones]

I guess you guys are going to have to educate me........and this is probably going to start something, but I always figured that the debt service on leased autos, a 40 year mortgage, and a 20+ year boat loan eats such a big hole in your income that you have a hard time accumulating anything.

I've always just saved up until I could pay cash and did some investing and it worked for me........I retired at 44, drive a Lexus and have a decent boat.

What am I missing?

It's not what your missing, its what you have. Patience. But I think you have made a very good income too. I don't know what the percentages are, but 44 year old retirees are pretty rare. You've obviously made some good investments, but being in your situation makes you in the minority. I've only been in the real estate field for 8 years, but I've learned that people don't buy houses like they used to. There was a time when it was unheard of that someone buy a home with less than 20% down, not that is rare. I know we are talking about two different things here, but there are some similarities in thinking. People are definately not as conservative with money and it will probably take something like a world war II type of event to change peoples' spending habits. I wouldn't call myself financially conservative, but I'm no George Bush when it comes to spending. I pick and choose where I want to be frugal and where I want to be impulsive. I just don't think I have the time or money to ever pay cash for a new $30,000+ car or a $75,000+ boat. Maybe 20 years from now, but I'd like to enjoy some of those things while I'm in my 30's and while my children are young. The best I can do is continue to save money, earn equity in my home, make some investments and pay down my debt as fast as possible.

 

[Turtlesboat]

I'm with Frank on this. I've never financed toys. I just saved my pennies and paid cash. When I start to figure how much something costs me in real money over time financing it???? I can't swallow it. I don't make a lot of money, but I own a car, house, business, boat and more junk than I have room to store, and i'm debt free. Everything was paid for in cash. I've considered financing and investing the money but it just doesn't sit well with me to give someone money to borrow their money. I have a lot of investments that I buy over the year with the money I don't spend on loans. I guess it's patience. I've wanted a boat for 8 years and started saving then. As I saved, my "boat" went from a 17' to a 280. So I figure I skipped a few upgrades in there as well.

 

[fwebster]

Nope, I never had a huge salary. We lived conservatively, and still do, always paid cash for everything except my first house, invested in equities and real estate again, with cash and we found that it doesn't require expensive toys to enjoy spending time with your kids............but you are right. We enjoyed delayed gratification so we could retire early enough to enjoy life without a walker.

I guess its a matter of life style choice..............

 

[comsnark]

That is the difference. . .delayed gratification vs. "I want it, and I want it NOW".

I have seen lots of 20 somethings do the finance game. They have lots of nice stuff. . .and live large. The problem is that they are not *saving* anything. So later in life, they basically have *nothing*.

This is true for cars, boats and stereos. Houses are different. The difference here is that a house *appreciates*. Many can win this bet, because you are getting a 5% return on a $250,000 investment. . and only putting out maybe $25,000 to start. That is a leverage investment. Works great.

Assuming you don't have a housing crash.

And assuming you don't then fill the house full of depreciating junk like cars, boats and stereos. Don't forget a big house has big carrying costs (utilities, maintenance, landscaping, taxes)

_ _ _ _ _ _

Put me in the "cash" camp. While I acknowledge the logic of leveraged houses, and borrowing money at 4% to re-invest at 8% -> its funny how that never seems to quite work out correctly.