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loan rates


Ifinallygota21v

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2 hours ago, vanamp said:

 

I don't understand why some people get so  bent out of shape about boat loans but when someone spends $200 on cable TV and a case of beer they don't even bat an eye. 

Everyone spends money on entertainment.  If someone does not take out a boat loan it's not like that money is going into savings.  It will be spent on other forms of entertainment. 

Making a loan payment in January does suck a little but we spend sooo much time on the water during the summer that the winter break is a good time to get caught up on house projects and any other things I put off doing during boating season. 

Couldn't have said it better myself and that's exactly how my wife & I look at it.  Everything gets put aside in the summer so we can be at our lake, on the water making memories (and doing the nasty on the boat when no ones around).  Winter is for catching up on projects & putting a few pounds on.

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On 9/15/2017 at 8:05 AM, KirkB said:

Any other bad reviews on Essex?  I used them for my current loan and they're offering 3.99 right now.  Beats Good Sam's 4.89 by a good margin.  Can anyone vouch for Good Sam's loan process?  Such as how they fund everything?  My experience with Essex, not sure if this is normal as this is my first boat, but once I picked out what I wanted they wanted it inspected and a report was written on it.  Then they decided they didn't want to loan what I needed for the boat so I had to come up with more money down than what I was originally going to use.  On top of that they took forever to fund.  Luckily the seller was patient and wanted to get me in the boat so it all worked out but it was kinda stressful.  Was curious if this is typical.

I'm looking at boats out of state and if I need to go through all of that with other lenders as well I'm wondering if I should just stick to something closer.

Good sams club all the way, was easy process from start to finish. 

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@racer808 how do you deduct your boat loan interest?  Only thing I can find in the tax code says that you can deduct loan interest on a boat as if it were a second home but only if it has a galley, head and berth.  

Edited by oldjeep
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I agree that boat loans are Ok.  With the prices of these boats many of us will never have the cash to buy one outright.  

To be fair to the loan critics, it is prudent to have an adequate amount of down payment to protect the bank, shame on them if they don't require it.  In the last downturn, I saw a lot of stress and heartache when people couldn't make their payments, but couldn't sell it because they were upside down.  It trashed their credit as well.  Be smart, my friends, you can have a awful lot of fun on a 2006 Malibu instead of a 2016.  

I am positive I do not have three times as much fun on my boat that cost three times as much as my previous boat.  

Edited by TallRedRider
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9 hours ago, racer808 said:

Oh this post is too good not to tear to shreds.  First off there is not such thing as a fixed HELOC, your rate can adjust & they have adjusted since the feds raised the prime.  You make a comment about not having a house but buying a boat?  So your dumbass is advocating putting a boat loan attached to your house, so if things went wrong in that persons like they can lose both instead of just the boat?  My boat loan rate is lower than my HELOC & a boat loan is deductible as well, I get a thing from the bank every year & write the interest off.  If you're gonna come on here guns blazing at least get your s*** together first.

Lastly, many people, myself included are well aware we will never have 50k or more cash handy to spend on a boat, my payment is a lease on fun & time I will never get back with my family as my kids grow.  I have also made money on every boat purchase so far, so frankly they were investments at that point.  You can't put a price tag on memories with your kids & if you spent all your time with them saving for your future & now you have money & they're gone, I feel sorry for you.  Cause all their memories are going to be the good times they had at college getting plowed, not the time they spent with you.

The fact that the rate is variable does not mean the rate isn't low. In fact, variable rates have worked better than fixed rates for at least the last 15 years for mortgages. Trust me, I've got my S*** together, that's why I think it's weird to see someone willing to borrow $100K for a toy. 

Boat loan interest is not deductible unless you're using the boat for business or living in it as a second home or something. Good luck in an audit. You must be thinking of your student loan or mortgage or something. 

https://ttlc.intuit.com/questions/3416623-can-i-deduct-interest-paid-on-boat-and-atv-loans

https://www.irs.gov/taxtopics/tc505.html

I'm sorry to hear you'll never have $50K of cash handy to spend on a boat. What do you plan to spend on your retirement or your childrens' education? At least you'll have memories to carry you through and I guess the kids will have to borrow money to get plowed...and the cycle continues.

Edited by SomeYeahoo
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9 hours ago, oldjeep said:

@racer808 how do you deduct your boat loan interest?  Only thing I can find in the tax code says that you can deduct loan interest on a boat as if it were a second home but only if it has a galley, head and berth.  

I will dig through my files later tnght to find the form.  I just get a thing in the mail much like you do for your home loan that shows the interest & I input in turbotax.

 

Edit;  You're correct, I just dug up the slip, now I am not sure if I've ever entered it or not?  Should probably hope I didn't..  

Edited by racer808
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7 hours ago, TallRedRider said:

I agree that boat loans are Ok.  With the prices of these boats many of us will never have the cash to buy one outright.  

To be fair to the loan critics, it is prudent to have an adequate amount of down payment to protect the bank, shame on them if they don't require it.  In the last downturn, I saw a lot of stress and heartache when people couldn't make their payments, but couldn't sell it because they were upside down.  It trashed their credit as well.  Be smart, my friends, you can have a awful lot of fun on a 2006 Malibu instead of a 2016.  

I am positive I do not have three times as much fun on my boat that cost three times as much as my previous boat.  

Agree 100% and after all the demos I've been on & other peoples boats there is nothing in my mind that justifies the price tag of the Bu, Mastercraft, tige, etc.  My buddys about to blow 100k on a MXZ & I just don't get it.  Storage, hull, etc same as Axis.  Has cool billet stuff, sea deck better upholstery & fancy boy touch screens.  I hate that my MB is loud underway, that MXZ was actually louder.  Wave wise, sure it's good but isn't as good as my MB's wave.  I was hoping the power wedge was gonna be so bad a** it would be required if I was gonna buy an Axis.  I thought it was useless after 2 clicks from steep, made the wave long & mellow but there was no push.  I think it'd be harder to teach a newb on that wave than it would be to just keep it steep.  Based on that, I think manual wedge is fine.   Talking with the sales guy my theory is correct, the only reason these boats are fetching 100k plus is because they can & it's driven by demand.  I think saw dealer invoice for a loaded LSV was around 59k?  I wish I had better surf boards when I had my VLX, going off memory that wave was every bit as good as the Axis & Malbus I've been on recently, it was just so slammed to get it & the low free board made it sketchy so I would want newer in that regard.  

For being prudent, I thought with boats 10-20% down was required?  I always put 20% down on mine just for the reasons you stated, in case I have to sell it.

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5 hours ago, SomeYeahoo said:

The fact that the rate is variable does not mean the rate isn't low. In fact, variable rates have worked better than fixed rates for at least the last 15 years for mortgages. Trust me, I've got my S*** together, that's why I think it's weird to see someone willing to borrow $100K for a toy. 

Boat loan interest is not deductible unless you're using the boat for business or living in it as a second home or something. Good luck in an audit. You must be thinking of your student loan or mortgage or something. 

https://ttlc.intuit.com/questions/3416623-can-i-deduct-interest-paid-on-boat-and-atv-loans

https://www.irs.gov/taxtopics/tc505.html

I'm sorry to hear you'll never have $50K of cash handy to spend on a boat. What do you plan to spend on your retirement or your childrens' education? At least you'll have memories to carry you through and I guess the kids will have to borrow money to get plowed...and the cycle continues.

I sure as hell wouldn't borrow 100k nor would I buy a 100k boat.  I just went & found the thing, it's a note from the bank that shows the interest & that's it deductible, where I input it into turbotax I don't know, I just answer the questions, I am not a tax guy & I blindly trust turbo tax so I can move along.  As for my kids education, laughable, those bastards on their own , they can work through school like everyone else & get plowed in their free time like the rest of us did.

 I am saddened as well that I'll never that much cash at my disposal to blow on a boat, it has to sit in savings, my 401k, HSA, etc.  I am not a smart financial guy, I work for the man, I don't know how to make wealth, I can't even come up with an idea for second stream of income besides some rental property.  But what I do know is my dad just worked, saved, we never did these fun things and one day he just dies at 57.  There isn't many people who climb past where I am at in life & even less than climb into the big money cash club never have any debt.  I personally don't care if I lose everything tomorrow, I'll still have my house, I'll always have a job & my smile is twice as big as most peoples even with my resting b**** face.   

Edited by racer808
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16 minutes ago, bamaboy said:

Hear that boys?  If you take a loan out to buy a boat your kids will be stuck in a cycle of poverty.  They will be eating low protein gruel while surfing their own 23 LSVs.

 

Let me throw out my personal scenario for you.  My last boat was 80K out the door with tax, title, reg.  My wife suggested we pay cash.  I told her that was the dumbest thing she ever said.  (not really but I wanted to).

Our credit union rate is 3.24%.  We also get an annual rebate based on credit union performance which generally depends on the economy overall.  Last 4 years we got 75% back.  This effectively reduces my rate to 0.81% if it holds.  Last 10 years, credit union members have gotten more than 50% back.  So at most I will assume a 1.62% rate.  

I'm not a market whiz, but I know that I can make a lot more than 1.62% investing 80K in pretty much anything including Bitcoin.

 

I realize that not everyone can get that rate but the point is that everyone's scenario is different.  Many people choose to take loans out because it is a smarter financial decision.  You seem to presume that you know a lot more than you actually do.  

 

Time to take a step down from your high horse there new guy

 

So is that an actual argument?   Or just another DP takedown for the fun of it.  lol

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1 hour ago, bamaboy said:

Our credit union rate is 3.24%.  We also get an annual rebate based on credit union performance which generally depends on the economy overall.  Last 4 years we got 75% back.  This effectively reduces my rate to 0.81% if it holds.  Last 10 years, credit union members have gotten more than 50% back.  So at most I will assume a 1.62% rate. 

Interesting. I'm also one who never understood why people would take out loans to buy boats, especially over some of the longer terms I've heard thrown around.

I know nothing about credit unions but maybe I should?

Edited by gobble
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29 minutes ago, gobble said:

Interesting. I'm also one who never understood why people would take out loans to buy boats, especially over some of the longer terms I've heard thrown around.

I know nothing about credit unions but maybe I should?

I view as a lease.  I have no intention of ever paying off the boat, I use them 3-4 years sell them, upgrade.  I don't buy brand new so I am not taking the deprecated hit & with surfing blowing up, the cost of new boats the used boat market just goes up every year.  So far I've come out ahead on every purchase & will come out ahead when I sell this one.  I guess in my mind my pyt money is tied up but I get it all back when I sell and I get a new toy.  I might be in trouble if things fall to total s*** but I think the economic pessimism is over blown.  

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22 minutes ago, racer808 said:

I view as a lease.  I have no intention of ever paying off the boat, I use them 3-4 years sell them, upgrade.  I don't buy brand new so I am not taking the deprecated hit & with surfing blowing up, the cost of new boats the used boat market just goes up every year.  So far I've come out ahead on every purchase & will come out ahead when I sell this one.  I guess in my mind my pyt money is tied up but I get it all back when I sell and I get a new toy.  I might be in trouble if things fall to total s*** but I think the economic pessimism is over blown.  

 

Replace "used boat market" with "housing" and welcome to 2007.  Anecdotally, the house I bought in February 2001 and sold in 2007 for less than I paid for it was last sold in 2014 for less than I sold it for.  So there was a 14 year downturn, and this was not in Las Vegas or anything, it was in Ann Arbor, MI.

 

I don't really care what individuals do.  But you are going to be very hard pressed to find any sort of money manager who tells you that personally financing a depreciating asset is ever a good idea.  And that is ESPECIALLY the case for a luxury* item.  The economy takes a downturn, one's income takes an unexpected hit, or one's expenses take an unexpected hit, and it puts that person in a tight spot.  If they don't pay their cable bill, it gets turned off, no biggie.  But if they don't pay their debt obligations (and that is what a loan on a boat is), their credit is shot.  And if they owe more on the asset than the market will bring, then they had better either have enough in liquid assets to cover the difference (and payments until they can sell it).  And then if they need to relocate to have a job that can bring the income they seek, their hands may be tied due to the inability to either finance a house, or even get a rental due to poor credit.

 

Again, I don't care.  I financed our first boat, albeit only four years.  I'm not trying to pass judgement.  Just trying to explain the perspective of folks who say that financing one of these things (especially over 15 years or whatever) is not wise.

 

*luxury meaning non-essential (like cars, or whatever). 

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16 minutes ago, 67King said:

 

Replace "used boat market" with "housing" and welcome to 2007.  Anecdotally, the house I bought in February 2001 and sold in 2007 for less than I paid for it was last sold in 2014 for less than I sold it for.  So there was a 14 year downturn, and this was not in Las Vegas or anything, it was in Ann Arbor, MI.

 

I don't really care what individuals do.  But you are going to be very hard pressed to find any sort of money manager who tells you that personally financing a depreciating asset is ever a good idea.  And that is ESPECIALLY the case for a luxury* item.  The economy takes a downturn, one's income takes an unexpected hit, or one's expenses take an unexpected hit, and it puts that person in a tight spot.  If they don't pay their cable bill, it gets turned off, no biggie.  But if they don't pay their debt obligations (and that is what a loan on a boat is), their credit is shot.  And if they owe more on the asset than the market will bring, then they had better either have enough in liquid assets to cover the difference (and payments until they can sell it).  And then if they need to relocate to have a job that can bring the income they seek, their hands may be tied due to the inability to either finance a house, or even get a rental due to poor credit.

 

 

Again, I don't care.  I financed our first boat, albeit only four years.  I'm not trying to pass judgement.  Just trying to explain the perspective of folks who say that financing one of these things (especially over 15 years or whatever) is not wise.

 

*luxury meaning non-essential (like cars, or whatever). 

I hear you, but it's not like I am living pay check to pay check I would just rather make a pyt than part with a large chunk of my savings.  I am lucky that in my industry I will always have a job that pays close to if not more at some places even in a down turn.  Finance experts will also tell you to not invest unless you have 6 months salary in savings, very few people ever reach that.  If I had to sell in a down turn I still think I'll be okay because I put enough down that I could sell it for what I owe easily to get out from it or maybe bring some cash to the table.  However I will note, even during the downturn when housing took a hit, boat sales were still strong & continued to climb.  Perhaps that says people put toys over living but whatever, I only live once & I am not going to be able to do this stuff when I get older, my knees are shot, my shoulders are shot & I've broke more bones than I can count racing dirt bikes, I fully expect to have a lot of mobility issues when I hit 60.  Spend now, worry later, it's the American way.

I think it should be noted, a good majority here had better financial upbringings, have more money than most so it's easy to say these things when you have both financial safety & a new Malibu.  My kids / wife will be fine when I die as the insurance policy is better than anything I have in savings to pass down.  So I got that going for me

Edited by racer808
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10 minutes ago, racer808 said:

However I will note, even during the downturn when housing took a hit, boat sales were still strong & continued to climb.  Perhaps that says people put toys over living

This is just not true.  08-09 (and probably even as late as 10) new boat production fell through the floor.  I'm too lazy to find it but there are graphs and charts that are part of MBUU's public filings.  And on the used market there were many many many below cost and upside down (i.e. "short sale") boat deals going.

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4 hours ago, racer808 said:

Talking with the sales guy my theory is correct, the only reason these boats are fetching 100k plus is because they can & it's driven by demand.  I think saw dealer invoice for a loaded LSV was around 59k? 

This isn't true either... not even close. 

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3 minutes ago, racer808 said:

Yeah you're right, that was for the VLX.  LSV much more.  Here's a link though that shows invoice 

http://www.seedealercost.com/boats

 

 

Not true for the VLX either (loaded or otherwise)

I have no idea where that site gets its "data" but it's been discredited before. Frankly, I have never believed it. 

You can believe whatever you want to, like boat interest being tax deductible. :Doh:

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Basic scenario.  Pay cash for boat or boat loan in my name only.  

If i get hit by a bus today do i want my wife to have 100k in cash, with a boat loan that she can default on if she chooses, with ZERO impact to her.  Or do i want her to have a boat free and clear and 100k less in savings.

Pretty simple answer in my family, especially with low interest loans.

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1 minute ago, IXFE said:

Not true for the VLX either (loaded or otherwise)

I have no idea where that site gets its "data" but it's been discredited before. Frankly, I have never believed it. 

You can believe whatever you want to, like boat interest being tax deductible. :Doh:

Couldn't that be accurate for the base price of the boat?  40% markup it appears on most models.  I would say that is probably accurate wouldn't you?  So if you are paying 40% off you are basically getting it at cost.  

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2 minutes ago, bamaboy said:

Couldn't that be accurate for the base price of the boat?  40% markup it appears on most models.  I would say that is probably accurate wouldn't you?  So if you are paying 40% off you are basically getting it at cost.  

Racer specified "loaded LSV"

I have no direct knowledge of dealer margin, but I'm quite certain it's not 40%

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10 minutes ago, DarkSide said:

Basic scenario.  Pay cash for boat or boat loan in my name only.  

If i get hit by a bus today do i want my wife to have 100k in cash, with a boat loan that she can default on if she chooses, with ZERO impact to her.  Or do i want her to have a boat free and clear and 100k less in savings.

Pretty simple answer in my family, especially with low interest loans.

Or just carry a lot of life insurance so that the loan is covered along with everything else.

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48 minutes ago, shawndoggy said:

This is just not true.  08-09 (and probably even as late as 10) new boat production fell through the floor.  I'm too lazy to find it but there are graphs and charts that are part of MBUU's public filings.  And on the used market there were many many many below cost and upside down (i.e. "short sale") boat deals going.

Here you go...

 

US Performance Boat Sales.jpg

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