What's the depreciation vs. boat loan on a 20 year loan

[BadgerBoater55]

Ah... the financial planner in me loves this thread! I will be back later with a bunch of popcorn to sift through this.

Again... not soliciting, advertising, giving advice, because like some VERY SMART people commented, I don't know anything about actual details... BUT if my client(s) were at all worried about the fact of coming out ahead going one way or another on the financing, it probably isn't a good idea to get a boat.  It doesn't matter that it PROBABLY won't be an issue so much as the constant thought/worry about the financial mechanics behind the boat will greatly erode the enjoyment of the boat.  Its a boat... not an investment, treat it as such.  It is all about checks and balances and knowing worst case scenario, what are you willing to give up to make sure other areas of your finance don't get wiped out.  Boats have held value well (even increased in some cases!), market has been up up and away, it would be interesting to rewind to 07-08 and see what conversations would be had at that time!

Side note... I really want to start producing purely informative videos/podcasts/blogs together (not pitching my services) about the financial aspects of "boating"/"lake lifestyle" because it puts two of my favorite topics into one package.  What are some topics y'all (forgive me, I am moving to Dallas in August so just getting my practice in) would like to know more about?  My braindump so far has me going into a comprehensive approach into each component of lake lifestyle (boat, home, dock, patio areas, etc.) and what to know about how financial topics blend into each of those pieces, what average costs are, and what to look out for when considering to take on these financial commitments.  I so often see "is this a good deal?",  "how much is this boat lift?", "what are good boat insurance rates?" and since I don't sell any of those things... I can stay in my unbiased / no conflict of interest voice. 

If this is "de-railing", feel free to bump me to a new thread.  

[rsutton1223]

41 minutes ago, hethj7 said:

All the seats are loungers at the local theater so tickets alone were $90.  I rounded up a bit to 200 total, but we spent just under $100 on pretzels, drinks, popcorn, etc.   We don’t go to the movies often so we splurged.  Anyways, I didn’t mean to derail this thread.  Carry on!

We have the same thing here. Seats are assigned and reclining. 

[Nitrousbird]

4 hours ago, vanamp said:

What always kills me about these threads is the "never finance a toy" crowd seems to completely ignore that everyone should have some funds budgeted for entertainment/recreation monthly.  So by the never finance a toy logic it is somehow more fiscally responisible to have a really expensive cable TV package and play alot of golf.  Is paying for an over priced beer from the cart guy/gal more responsible than paying interest on a loan?s

So if you lose your job, what is harder to do.  Cancel cable or pay a boat note?  Not exactly apples to oranges.  

[vanamp]

34 minutes ago, Nitrousbird said:

So if you lose your job, what is harder to do.  Cancel cable or pay a boat note?  Not exactly apples to oranges.  

You have obviously never tried to cacel cable.  

Lets just call this person who is barley hanging on to their job, has no savings, has no backup plan and is financing a $100k boat bigfoot.  We are not talking about a sweet dodge neon with spinners and a bumpin' system....despite what we see at the boat ramp people buying these types of toys are probably not idiots and have to be able to afford gas for them, skis/boards, registration and all the other accessories needed to make them fun. 

 

[Eagleboy99]

43 minutes ago, vanamp said:

people buying these types of toys are probably not idiots and have to be able to afford gas for them

Wrong and credit are the two words.

[ctvandy23]

See again plenty of you love to be judgy!  Live and let live guys and gals!  If some want to take a loan why do you care?  Do I care that you liquidated every penny to buy a boat in cash??  Hell no, it’s your ride!  Come on, this has been beaten and beaten some more!  Some do loans, others don’t.  Bottom line we all share the same passion!   

Enjoy your boat no matter how you pay for it!  It’s great family and friend time and at the end of the day that’s what matters!  Happy 4th to loaners and anti-loaners

[carguy79ta]

My thinking is if I lose my job, I have less monthly expenditures that have to be met. Easier to go into hunker-down mode.

[vanamp]

24 minutes ago, carguy79ta said:

My thinking is if I lose my job, I have less monthly expenditures that have to be met. Easier to go into hunker-down mode.

Hell yeah, if I lost my job I would immediately save $30k a year in daycare costs for our two little ones. If I got a decent overnight job I might come out ahead cash wise. 

[hethj7]

If I lose my job, liquidate the boat.  I would say one personal key is staying in positive equity territory with them.   And yea I know - recession, blah, blah, blah.  

[jjackkrash]

I have not read the thread, but note that, with a non-recourse secured loan, if the s really hits the fan and the economy tanks there is less personal risk carrying no equity or being under water so to speak on the loan.  Then it is the bank taking the risk of a tanking economy.  If things go south you hand the keys to the bank and that's it.     

[Chattwake]

Here’s how I explain it to my friends:  most families spent at least $5k a year taking a week long family vacation.  You come back from that with memories only (maybe a sunburn).  Skipping that week and exchanging it for a full summer of lake days also makes a lot of sense. Sure, with a long term loan, you are locked in, and unless you get a deal or put money down, you may wind up upside down on a boat. But, if you have a stable income and buy a boat you really can afford, it’s absolutely with it.  Plus, you’ll eventually have a paid off asset, not just memories.  

 

With kids, they’d rather learn to surf and swim with their friends than lay on a beach in Mexico.

[bamabonners]

Honest question: If I had $140k in cash, why would I drop it down on a boat?  Why not finance that boat and invest the cash to make more money. Let’s be honest, none of us financing for 12+ years are planning on keeping it until its paid off anyway.  We’re planning on a cheap payment for a couple years and selling, hopefully the market stays high.  I’d actually be interested in leasing a boat, obviously if the teens were good.  To those that are debt free and pay cash for everything, well good for you.  Nothing wrong with financing either.  As long as you feel comfortable, then rock on in your favorite toy. 

Edited July 5, 2019 by bamabonners

[shawndoggy]

On 7/4/2019 at 6:58 AM, jjackkrash said:

I have not read the thread, but note that, with a non-recourse secured loan, if the s really hits the fan and the economy tanks there is less personal risk carrying no equity or being under water so to speak on the loan.  Then it is the bank taking the risk of a tanking economy.  If things go south you hand the keys to the bank and that's it.     

Are there really lenders out there doing nonrecourse consumer boat loans?

[Murphys]

On Thursday, July 04, 2019 at 8:58 AM, jjackkrash said:

I have not read the thread, but note that, with a non-recourse secured loan, if the s really hits the fan and the economy tanks there is less personal risk carrying no equity or being under water so to speak on the loan.  Then it is the bank taking the risk of a tanking economy.  If things go south you hand the keys to the bank and that's it.     

Can you actually obtain a non-recourse loan on a boat?

[carguy79ta]

Would you really want to walk away from a loan and hand the keys to the bank. Quite the ding on the credit history. ...Oh well we are delving into the alternate universe of "Hypothetical situations"...

[Eagleboy99]

12 minutes ago, carguy79ta said:

walk away from a loan and hand the keys to the bank

People do it all the time with houses, so why not boats?

[carguy79ta]

I would imagine plenty of people do. Especially in the fall.

[Chattwake]

Why the hell are you bumping threads from the Stone Age?

[bboozer]

On 6/30/2019 at 1:40 PM, Whitecap said:

“No one plans to keep them 20 years typically and probably not even 10.”

Your view may not be true for all cases.  More than a few of us here, either live on the lake full time, or have a lake house that they use often.  Most likely that home will have a covered boat slip.  The boat that they buy will be an integral part of their children’s, grandchildren, and extended family’s development.  It will be one of the central focal points of the family.  “Family boat time!”

If you are going to buy and hold, a Malibu is a great boat for that.  Some members here will buy a five year old Malibu at a great discount, take great care of it, and help build their families memories around it.  They will also use it to teach safety, responsibility, accountability,  and to also teach those kids and grandkids how to take care of the family investment - another great life lesson to learn.  More than a few of us here, I’m guessing,  will buy a Malibu, treat her right, grow old with her, and hold on to her for a long time.

Buying a boat can be a horrible financial decision for a family.  Buying a boat can be a fantastic memory maker for a family.  (Everyone needs to find their own balance between family development and financial security. We are free to find that balance).

For me........I can make more money - I can’t make more time.

just my .02 cents.

I agree with your take... I had a '96 Mastercraft Prostar 205 (I bought new) and then upgraded to a '07 Wakesetter VLX (bought new).... I would love to upgrade again, but the price keeps doubling and our current living situation is that the new boats won't fit in the garage... Our boat still looks almost new and has almost 1000 hours on it.... We are on it just about every weekend when the weather is warm enough... But I doubt that most that finance for 20 yrs will have anything that is worth an $800 payment when they are at the end... We are fortunate to have somewhere to store ours out of the weather and we paid for it in full at purchase... The next one probably will have to be financed.... But we are still a few years away...