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lease options?


Chrismoe

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Hello all,

Does anyone know of any leasing companies that also lease boats? It may just be me, but I doubt it, who gets a new boat once a year. In theory this could make leasing a boat an explorable option. Is anyone aware of any leasing companies that also lease boats?

TY,

Chris

Edited by Chrismoe
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47 minutes ago, Chrismoe said:

Hello all,

Does anyone know of any leasing companies that also lease boats? It may just be me, but I doubt it, who gets a new boat once a year. In theory this could make leasing a boat an explorable option. Is anyone aware of any leasing companies that also lease boats?

TY,

Chris

I am guessing the numbers would never really work out in your favor.  Any financing company that did put together a 1 year lease deal on a $180k MSRP boat is quickly going to make the residual so low to limit risk (like 50% of MSRP in 12 months) that it would make the deal unpalatable for the someone compared to just flipping.  (IE: MSRP = $180k, you negotiated to a sales price of -30%/$126k, lease residual @ 12months/50 hours = $90k.  So your lease payments would be $3k/months + the lease factor/interest (which I am sure would be a crazy high number)+ monthly tax.  But maybe your accountant can find a way to write off that ~$40+k.?  I think there is just too much uncertainty in boat pricing (everything from what they actually cost new vs what they are worth in a year, three years, five years, etc.)  And how do you define normal wear and tear on a boat (we all have a VERY different definition... some people treat their boats like boats should be treated, but other people have no problem beaching their boat, letting people spray sunscreen, etc.)  I like the idea... I just think it won't work unless you have a unique tax situation (ski school, etc.)

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1 hour ago, gregtay said:

I am guessing the numbers would never really work out in your favor.  Any financing company that did put together a 1 year lease deal on a $180k MSRP boat is quickly going to make the residual so low to limit risk (like 50% of MSRP in 12 months) that it would make the deal unpalatable for the someone compared to just flipping.  (IE: MSRP = $180k, you negotiated to a sales price of -30%/$126k, lease residual @ 12months/50 hours = $90k.  So your lease payments would be $3k/months + the lease factor/interest (which I am sure would be a crazy high number)+ monthly tax.  But maybe your accountant can find a way to write off that ~$40+k.?  I think there is just too much uncertainty in boat pricing (everything from what they actually cost new vs what they are worth in a year, three years, five years, etc.)  And how do you define normal wear and tear on a boat (we all have a VERY different definition... some people treat their boats like boats should be treated, but other people have no problem beaching their boat, letting people spray sunscreen, etc.)  I like the idea... I just think it won't work unless you have a unique tax situation (ski school, etc.)

Hey Greg,

TY for the time and mind-share you put into your reply. Great stuff. 

Are buyers really getting 30% off MSRP? 

Chris

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I don't think you will find a lease company that does marine but your dealer might be able to work with you. Basically buying on a traditional financing term and looking pre predicting trade in and loss over the term of ownership, obviously you can't predict exactly what will happen in the future but it's worth a shot. Every dealer does things a but differently, the larger ones will be able to work with you the most but you will want to be local of course. 

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Leasing companies make money.  I doubt you could find a deal that would work.  With with the ever-escalating prices, an annual refresh would likely cost a lot less.  I know a couple of people who get a new boat every year; one guy takes a haircut (but has more money than God) and the other guy sells trucks to his dealer so they work out a deal.  Given the shakedown cruises and the (IMHO) incremental annual benefits, I can't see the point of  a new boat every year.  YMMV.

Edited by Eagleboy99
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2 hours ago, Cole2001 said:

I don't think you will find a lease company that does marine but your dealer might be able to work with you. Basically buying on a traditional financing term and looking pre predicting trade in and loss over the term of ownership, obviously you can't predict exactly what will happen in the future but it's worth a shot. Every dealer does things a but differently, the larger ones will be able to work with you the most but you will want to be local of course. 

TY Cole for your input. Good stuff. I have the funds to buy the boat outright and likely will just to avoid taking any more of a hit when I sell the boat in a year. I was just wanting to avoid tying up that much cash for 1 year. 

Chris

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1 hour ago, Eagleboy99 said:

Leasing companies make money.  I doubt you could find a deal that would work.  With with the ever-escalating prices, an annual refresh would likely cost a lot less.  I know a couple of people who get a new boat every year; one guy takes a haircut (but has more money than God) and the other guy sells trucks to his dealer so they work out a deal.  Given the shakedown cruises and the (IMHO) incremental annual benefits, I can't see the point of  a new boat every year.  YMMV.

Hey Eagleboy,

Thanks for weighing in. I do not have more money than god nor do I have anything to barter with at my Bu' dealership. So, I will try and get the best possible price I can on a boat \ color scheme and options I hope will be popular when I sell. BTW I will not be selling in 1 year to buy (yet) another boat. January, 2022 the wife and I plan to make big changes to include selling our ranch and relocating out of state. So this will likely be my last boat for some time - enjoy the season and then sell and move onto the next chapter.

Best,

Chris

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19 hours ago, COOP said:

You could look into Freedom Boat club. See if they have boats on your lake. Plus with the premier membership you can get boats at any of their locations world wide.

TY Coop!

Chris

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Good timing for this topic. With used prices the way they are, I wonder if it might be a good investment to buy and then sell in one year? Maybe the hit could be minimized and you enjoy a new boat with warranty, etc, then up-grade and repeat again.

Steve B.

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On 11/10/2020 at 6:03 PM, Chrismoe said:

Are buyers really getting 30% off MSRP? 

I suppose you could come closer to that if you can convince your dealer that you really will be back for a new one every year. 

In any event, a lease company might get a really good deal if they are buying a fleet of boats every year.

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18 hours ago, justgary said:

I suppose you could come closer to that if you can convince your dealer that you really will be back for a new one every year. 

In any event, a lease company might get a really good deal if they are buying a fleet of boats every year.

TY Gary for your input. Good stuff.

Be well,

Chris

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Coming from an auto finance guy for my point of view here. Financing longer term at the lowest rate possible is similar to a lease wowing the exception that you are the one at risk for market fluctuations. In an auto lease, you are only paying for half (ish) of the car over 3 (ish) years with a rent charge (similar to an interest rate). @Eagleboy99, Manufactures actually make less money on a lease than they do on a purchase but the upside for them is repeat business after 3 years. There’s more to it but the manufacturer is only interested in moving units. Dealers have a vested interest in leased vehicles in both the initial sale, the repeat biz and the sale of the returned vechicle along with a few other factors. As an auto dealership (at least my store), we make less on leases than we do on purchase by a large margin. Repeat business doesn’t come close to making up the difference. As for a boat lease and the long term financing, it would usually only work if you could secure a good deal at time of purchase and most importantly, live in a state that doesn’t charge sales tax OR a state that only charges the difference between the trade in value and the purchase price of a new boat. In a state like Ca., it doesn’t really pencil since you pay 8% (ish) of the purchase price regardless of trade. That eats up equity quickly. If you could get a good deal, put minimal down to secure good financing, and then flip the boat 1,2 or 3 years later and sell for a decent price, it would be similar to a lease where your cost is you initial investment plus payments and then factor in the profit/loss at time of sale when you’re done. Again, most importantly, the risk at the end is on your hands and not the bank as it is in an auto lease. The risk is huge in my opinion. If you have the cash to buy it outright, that’s the cheapest and least risk option but you have to look at your profit potential of using your money for investment opportunities to determine if that is the right way for you. IMHO, there’s no RIGHT/WRONG way to buy a boat IF YOU CAN AFFORD IT. Just have to look at your financial situation and do what’s right for you. There’s risk no matter how you slice it. 

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isnt the saying in the auto business, “sure you can have it for that, PLUS a low low note”

leases are so bad you pay “lease factor interest” or financing on the sales tax on the non residual amount your financing (or more)  of car at acquisition  plus sales tax on the note and (on other types of equip for business leases at least) , property tax.  they register the leases with the local county just like a mortgage and this generates a property tax bill

but for businesses needing equip, its the easiest and quickest way in to financing and acquisition to meet a need

for cars i really dont get it because of the ease of financing for funding and cheap interest when purchasing

equip financing through banks is expensive and if cheap your likely wrapped up/into the SBA which is no picnic for qualifying or  if your late on payments 

UNLESS your driving all the time and need warranty for ever but then you run in to mileage charges ( they dont negotiate much on residual, lease factor, or mileage)

Edited by granddaddy55
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