Tell me everything you know about boat loans.
April 1, 2016 9:36 AM   Subscribe

Partner is studying for charter boat captain's license. You gotta log 1,000 hours and you gotta have a good boat. Looking to spend 5k -15K on a USED dive/fishing power boat. I don't know the first thing about boat loans but would prefer to work with a place that specializes in this sort of customer. Willing to join whatever credit unions, organizations, associations to make this work. Looking for advice, mistakes not to make and rules of the road (or sea). Thanks.
posted by caveatz to Travel & Transportation (6 answers total) 1 user marked this as a favorite
Since you're asking for general advice, mine would be that if you're looking for a loan to finance a $5k boat, boat ownership may not be in the cards for your partner. It depends a lot on your location, but generally, boats are very expensive to run and store, especially relative to their purchase price. Consider looking harder at non-ownership routes to 1,000 hours before hunting for a good loan.
posted by craven_morhead at 10:23 AM on April 1, 2016 [6 favorites]

Yeah, I'm not a boat owner, but my in-laws have been for decades. Their joke is that "BOAT" stands for 'Break Out Another Thousand.' From what little I know, $5-$15K doesn't buy much boat; it'll either be tiny or need a lot of work.
posted by jon1270 at 11:29 AM on April 1, 2016 [2 favorites]

You are in heavily used territory - the kind of territory where most sales will be "as is" and "no warranty" and where everyone you know who bought a boat starts their tale of woe.

In such a case it's probably safe to assume that you won't be able to use the boat itself to secure the loan. So really you're just talking about a personal loan, and the fact that you want to buy a boat with it will be unimportant to the bank.
posted by jon1270 at 12:13 PM on April 1, 2016 [1 favorite]

I can't help with financing, though I believe most banks will assist with this. However, I do have some insights on buying boats in that price range -- if you want a boat that's not a junk pile, for that price you are going to have to get creative. The best place I've found to pick up a decent boat at a good price is Rio Dulce in Guatemala. It's a massive harbor where thousands of boats spend the hurricane season before heading out on the island circuit. Many, many wealthy people buy boats, take one trip down the Caribbean, and decide they hate it. These boats are in good shape and go for relatively small amounts of money.

If you get yourself down there, plan to stay for several weeks to find the right boat for you. It might take longer. Even there, expect to pay on the higher end of your price range for a newer boat.

Additionally, you should expect to spend between $6 and 10k per year to maintain the boat, if you do a lot of that work yourself, not including slippage fees, insurance, and licensing. Boats are expensive.

What's the different between a well and a boat? A well is a hole in the *ground* you throw money into ;)
posted by ananci at 12:29 PM on April 1, 2016 [4 favorites]

Boat loans work a lot like car loans and around here (Maine) banks are very familiar with them, especially in the context of fishing. Some banks will work with a buyer on a repayment schedule that fits with the fishing season so that payments are made when the boat is making a lot of money. They usually look for 10-20% down.

One thing to consider is that if you want to take more than 6 passengers you will need to buy an inspected vessel (the search term you are looking for is "COI") which will increase the cost of the boat significantly.

I also second that the annual maintenance will be a lot regardless of how little you spend on the boat. If you buy a trailer too you could haul, launch, and store the boat yourself which would significantly cut down on costs.

Another thought regarding getting a captains license, you can't legally run a dive boat until you have your license so you won't be able to make money with the boat while you build up your sea time. I'm pretty familiar with this type of thing so feel free to memail me if you have specific questions.
posted by unreasonable at 12:39 PM on April 1, 2016 [2 favorites]

My credit union does boat loans up to 100% of NADA book value. NADA value on boats tends to be lower than actual selling price in most markets though.

I'd push the budget closer to $25k assuming we're talking about a saltwater fishing boat that people would actually want to charter.

As a former boat owner, you can save a lot of money doing maintenance yourself. But there are specialized tools and skills needed and it can be quite the time sink if you're learning as you're going.
posted by LoveHam at 1:21 PM on April 1, 2016 [2 favorites]

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