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

[rsutton1223]

We always budget so that if one of us lost our job (wife or myself) our lifestyle wouldn't change. We might not eat out as much but we can afford everything we have and won't lose our investments. Has worked for us so far...but a two income family like us isn't common either.

Also if you buy smart the hit isn't nearly as bad. Our last boat we sold for $4k less than we paid for it after 5 years of use. 

Edited July 2, 2019 by rsutton1223

[kylesullens]

My last boat was a '99 Centurion Elite V.  I bought it in 2009 while the economy was in the tank.  The original owner bought it on a 15 year loan in 2000.  He had lost his job (contractor of some sort) and was liquidating his many toys so he could keep his house.  I asked him what he owed on it and he showed me his bank statement - $14,500.  I offered him $500 more than he owes on it and he accepted.  So I got the boat for $15k in 2009.  The boat was well maintained and had about 200 hours on it.

We outgrew the boat and I bought the Malibu at the end of summer 2017.  I sold the Centurion (now at 500 hours, plus a custom cover, FAE, some other goodies) for $19,500.

I throw out this story to illustrate how exposed boat values are to market conditions.  if the economy slows (or tanks, as it did in 2008), values of high-end toys take a HUGE dive.  People just aren't buying, and if they are, they are savvy cash buyers looking for a killer deal.  This is how I got into the Centurion, which I would not have been able to afford at the time had it been at its true market value of ~$26k.  The original owner lost all of his investment (other than the enjoyment).  He sacrificed all of the interest and equity that he had in the boat in order to eliminate the payment. 

This is a very real possibility when you do long-term financing on toys.  One of the main reasons I choose to buy only toys that I can afford to pay cash for.

[UWSkier]

26 minutes ago, rsutton1223 said:

We always budget so that if one of us lost our job (wife or myself) our lifestyle wouldn't change. We might not eat out as much but we can afford everything we have and won't lose our investments. Has worked for us so far...but a two income family like us isn't common either.

Also if you buy smart the hit isn't nearly as bad. Our last boat we sold for $4k less than we paid for it after 5 years of use.

Considering most new boats depreciate more than that in the first 20 hours of use, I'd be curious to see the details of this.  That's some great work.

[rsutton1223]

1 minute ago, UWSkier said:

Considering most new boats depreciate more than that in the first 20 hours of use, I'd be curious to see the details of this.  That's some great work.

That one we bought used but it only had 35 hours on it. The reality is that if you buy the right brand for the right price, the cost of boat ownership is not nearly as much as people think (outside of regular maintenance and gas).

My racing habit was MUCH more expensive than boating with 0% return on anything. Chasing horsepower/mph/et is literally like paying someone to light your money on fire.

[rsutton1223]

Now that this thread has basically gone sideways into other people's opinions on how everyone should handle their finances...as all threads like this on any pleasure industry does. The truth is that no one has the right to comment on other people's money. I watched guys max credit cards on car parts but unless they asked for advice...it wasn't mine to give. Everyone's situation is different and you never fully know what that is. Who knows...maybe they wanted the points and I was just assuming. 

[NWBU]

+1

And nobody has ever yet changed their own opinion based on some random internet stranger's view on their finances. Such a waste of energy, although it makes fun reading.

Edited July 3, 2019 by NWBU

[kerpluxal]

1 hour ago, NWBU said:

+1

And nobody has ever yet changed their own opinion based on some random internet stranger's view on their finances. Such as waste of energy, although it makes fun reading.

I always take advice of the internet and the internet is always truth

 

[mofaster]

My 2005 23LSV is worth more now, than when I bought it (used) in 2010.  Still looks amazing and only 250 hours.  I am fortunate to be retiring early in my life next year and thought about buying a new 23 LSV with all the bells and whistles....but, then when I priced one out, I was shocked at how much they have gone up.  The $120K boat build a few years back is now $180K.  I will stick with my 2005 and be thankful for the great deal I got on it at the time.

Crazy the prices of used Malibu's too.

 

 

[TallRedRider]

This thread is not quite as bad as everyone says.  Yes, there are differences of opinion on how to manage these things, but I find some of the insights valuable.  Yes, advice on how I should spend my money is given, but so far it has been respectful.  I also find how some people think to be eye-opening.  

For those who think that they will just live it up and send the boat to the bank if things go south...the real reason that gets the financial misers all in a tizzy is because some of the money the bank loses comes from folks who didn't manage their finances that way.   Irresponsible financing hurts all of us.  Or when people fall into the safety net of government programs, those who did not live it up are the ones paying.  That is one of the main reasons why the 'don't finance your boat for so long with so little down' crowd feels so passionate.  

[Eagleboy99]

2 hours ago, NWBU said:

changed their own opinion based on some random internet stranger's view

And yet it influences voting.  Go figure.

[Nitrousbird]

Everyone talks about money being cheap, earn x% in my investments, etc.  That's fine and dandy until the market tanks, a job is lost and the value of that luxury item of choice took a huge market driven depreciation.  Then what happens?  

The getting is good until it isn't. Preparing for the "isn't" is just as important as maximizing investments.  

[DUKENO1]

21 hours ago, vanamp said:

That made so much sense that I sold our boat and bought what I can afford with cash.....

Now my wife and kids are pissed and I'm not sure why.  Do you think you could talk some sense into them for me?

 

With that pool and view they should bow down to your greatness lol

[carguy79ta]

Yeah I am in the pay cash camp. All my stuff is paid for including my 50x100 shop. Except for my house, get a TD for that. My house is modest only 2300sf. I mentioned a couple yrs ago on one of these threads that if I lost my job, blablabla I dont have the payment. Or any payments on non essential stuff. No way I could stomach a loan on a 140k or whatever boat. I would lose sleep.

I dont criticize others for a boat loan. I have told people that as much fun as it is boating with friends and fam, it would have been worth it to get a loan on a boat. But back then I just couldn't take the plunge.

Edited July 3, 2019 by carguy79ta

[justgary]

I just keep asking myself how much I need in the bank to retire and not worry about money until my wife and I die.  No pension, so it's all on me. 

The numbers I keep cooking up are enormous, so that's what keeps me from borrowing money for anything. 

[rsutton1223]

It’s all perspective. You can’t let your own experience let you judge others. I remember a time in my life when $50 jeans seemed obscene. 

Edited July 3, 2019 by rsutton1223

[hethj7]

Kudos to all as this is the most civilized thread on this topic ever.  Glad to see we all have our perspectives and can respect for the most part whatever it is each of us chooses.  

 

[minnmarker]

I'm in the pay cash camp but y'all do whatever seems right.  Just glad at my age that I have the funds and am in good enough condition to still enjoy water sports and cruising with the kids and grand kids.

[Five Cent Worth]

Keep in mind, the geographic locations of some discussing these points.  Born and raised in NE Ohio, I would never embark on a new boat while living there.  At best 12 - 15 wks of boating up there when factoring in rain and cold.  Makes sense that some wouldn't fork over the cash / depreciation on a new boat with such a limited window.  Living in the SE - you literally can boat, without wet suit, from March to early Nov.  I think this drastically changes the equation IMHO.  

[vanamp]

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?

[Michigan boarder]

14 hours ago, justgary said:

I just keep asking myself how much I need in the bank to retire and not worry about money until my wife and I die.  No pension, so it's all on me. 

The numbers I keep cooking up are enormous, so that's what keeps me from borrowing money for anything. 

+1

[Eagleboy99]

Unless you are gunning for a spot on "Deadliest Catch", a boat is not a financially sound investment (classic Rivas and Chris-Craft barrelbacks excluded).  But they can be a wonderful family investment.  Get something within your financial means and enjoy the heck out of it. There's no calculating the return on investment from smiling faces and days in the sun on the water.

[hethj7]

I dropped $200 on taking my family of five to see Toy Story 4.  Boating seems cheap compared to that - but, I saved until I could afford it and paid cash, so it’s all good

[Eagleboy99]

Must have bought a lot of popcorn!  Went last night $20 CAD for two tickets - 3D.

[hethj7]

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!

[MadMan]

16 hours ago, rsutton1223 said:

. I remember a time in my life when $50 jeans seemed obscene. 

For me, that time is now.