CASH or FINANCE ???

[RCorsa]

Yeah I have an 820 credit score But my understanding is that simple interest loans are short term loans (typically 4-5 year max although now 72 and 84 month terms are more common now). Most boat loans are 15-20 years and amortize like home loans as far as I know.  I’m sure there are some that don’t but I’m not sure as I’m a cash buyer now and just paid cash for a 2022 M240 

[dwc032]

1 hour ago, RCorsa said:

Yeah I have an 820 credit score But my understanding is that simple interest loans are short term loans (typically 4-5 year max although now 72 and 84 month terms are more common now). Most boat loans are 15-20 years and amortize like home loans as far as I know.  I’m sure there are some that don’t but I’m not sure as I’m a cash buyer now and just paid cash for a 2022 M240 

Baller bro!  Maybe you can post your net worth spread sheet next....lol....jk 

[RCorsa]

Lol. Fair. That was a bit obnoxious - sorry. My point I was trying to make (poorly)  is that boat loans no matter your credit or ability to pay/  cash holdings are not great financial offerings.  The post prior was trying to say that he/she got great simple interest boat loans due to good credit somewhat implying that my description of loans was somehow related to pour credit worthiness? 

[shawndoggy]

18 minutes ago, RCorsa said:

Lol. Fair. That was a bit obnoxious - sorry. My point I was trying to make (poorly)  is that boat loans no matter your credit or ability to pay/  cash holdings are not great financial offerings.  The post prior was trying to say that he/she got great simple interest boat loans due to good credit somewhat implying that my description of loans was somehow related to pour credit worthiness? 

Like you I've only bought boats with cash.  That said I think you are wrong about the compounding interest loans, at least for wake boats?  All the online loans I can find are for simple interest loans.  I think you might be thinking of yacht/boats-with-a-pooper loans?

[hethj7]

Although I do have good credit, I am not aware of front loaded interest only (wake)boat loans.  Ours have always been simple straight line interest with no pre-payment penalties.  

[RCorsa]

Not implying the front end is interest only but you have to look at and ask for the amortization schedule on the loan if you want to see if you are really getting what is advertised by the broker. In many cases it can be different that what people think.  Probably the best loans out there are based on margin from investments with a large scale money managers (Meryl Lynch, JP Morgan, Goldman etc? They can offer things not available to branches.  I actually considered it for my m240 but I’d like to have that option for some other things I’m considering. 

[4mc]

4 hours ago, RCorsa said:

Not implying the front end is interest only but you have to look at and ask for the amortization schedule on the loan if you want to see if you are really getting what is advertised by the broker. In many cases it can be different that what people think.  Probably the best loans out there are based on margin from investments with a large scale money managers (Meryl Lynch, JP Morgan, Goldman etc? They can offer things not available to branches.  I actually considered it for my m240 but I’d like to have that option for some other things I’m considering. 

If anyone needs financial advice from an internet forum, they should reconsider their boat purchase because it is likely a bad decision.

 

[bboozer]

On 10/12/2021 at 11:08 PM, Stevo said:

I voted finance , but the caveat is a decent chunk of the purchase price is a down payment 40-50% then make accelerated payments to pay it off early our 2017 purchase with a 15yr loan was paid off in 3yrs. 

 

This will probably be the route that we go, on our next purchase. But, I will talk with our financial advisor about the best way to use our money... He has a new boat budgeted into our future. We paid cash for our '07 but the prices have way more than doubled since then and it seems like tying up that much cash this time around may not be the best decision.... But I can see everyone's point of view... 

[BigCreek]

The only way you can talk me into financing a purchase is when you can show me how my cash can provide a better return than the interest I'm paying on the loan. Looking backward at the last 5+ years that I have owned a clear titled boat, I should have financed it and put the cash into the stock market. My investment would probably have enough gains over that period to damn near pay off the loan by now, providing me with a "free" boat. However, the market could have fallen off, and I'd have 1/2 the money in the investment account and still 15 years of payments to make. 

Bottom line - I can't sleep when I owe $$ on stuff I play with. I try to go loan-free, and when I can't, I try to pay it off ASAP. 

[carguy79ta]

Another thing to consider is inflation. If you buy with cash ..then the cash is at least doing something instead of sitting in a no/low interest acct. If you buy on time..then 5 or so yrs from now, you will be making payments with inflated dollars. 

I can see either way.