240 Months??!!

[Shuck Water]

I went to the DFW boat expo this weekend to check out the new 242x and kept looking at the pricing information in confusion. The price was almost $75k, but the "payment" side read under $500 per month. I had to look at the fine print to see that they are now financing these boats up to 20 years! Holy crap! You'd be under water for nearly 15 years! I get that you see many cruisers 20, 30, heck even 40 years old on the water, but 20 year financing on these boats just seems like another bubble in the making.

 

[Julian]

For someone like me who only has a loan on his house (and hates that), I cannot fathom having a loan on a "toy", let alone a 20 YEAR loan on a toy!!! Car loans I get....for many...you don't have a choice....but long loans on luxury items....yikes...

 

[Shuck Water]

I personally took advantage of the 15 year loan (@ 2.99%), but have been making double payments. I looked at it as a safety net should I need the cash in a crisis and could get away with minimal payments, but 20 years??

I asked the GM of the dealership about it and he was said at least 60% of the sales were taking the 20 year deal.

 

[GiddYupJoe]

I can say that financing our boat was the only option in order to get our children out at a young age. I didn't want to finance "toys" either but it was either get it now while they are young and enjoy the family time together or wait another 5-7 years to pay cash. By that time my boys would be in middle school and sports etc. To me it was worth the 4% for the family time. But 20 years!!! Wow. Maybe if I could live in it!

 

[MattFX4]

I do not have a boat yet, but am planning to purchase within the next year. I plan on financing for 15 years, and see nothing wrong with that if I can get a loan for 3 to 4% interest. I am not really a fan of debt, and only have a mortgage at this point. I would much rather keep my $ liquid, and in the bank. I plan to put down 15-20%, and pay extra each month so if I ever did need to sell, I wouldn't be upside down. Personally, I do not see why some (not calling anyone out on this thread!) bash others for doing this. I have seen it elsewhere, but not here. Oh, but yeah 240 months is stretching it. 180 would be my absolute max.

 

[Scuba_ref]

We live in a society that values immediate gratification above fiscal prudence. This means that big ticket items need to be made financially available to the masses. Many consumers only look at the monthly payment, they don't care what the interest rate is or how long the term is. This is why the average person in the US carries $16,000 in credit card debt.

We purchased our first boat (an 18 foot Maxum bow rider with a 3.0 liter engine) for cash. We had that boat for 5 years until we absolutely out grew it. It wasn't flashy or fast or hip or phat or lit or whatever other word my kids use. It was fun and cheap. Once we decided that it was time to upgrade we didn't upgrade to a brand new boat, we bought a 10 year old Yamaha AR230 for which we paid 50% cash with a plan to pay off the balance within 2 years (done).

Would I like to have a brand new boat with all the bells and whistles, you bet I would. Do I want to pay $70,000 for it or finance it for an extended period of time, not a chance. I don't begrudge those with a risk tolerance lower than mine; I also don't have a problem with dealers offering financing for 20 years. Someone has to provide inventory for the used boat markets! I just hope that I've educated my kids well enough to understand the potential burden that debt can be and to lean to the more prudent side of consumerism.

 

[bobbie]

I bought our boat with the knowledge I would be coming into an inheritance in a couple of years. I financed it for 15 years at 2.99 and paid it off in about 18 months. Something very satisfying having title in hand.

 

[Nick Hughes]

I financed 100% for 2.99% for 60, 180 amortized. Could of paid cash, but no reason to, when you can make more than 2.99% in the market. Plan to pay off before the 60-180 rate hike, it becomes a near wash by then.

 

[MattFX4]

We live in a society that values immediate gratification above fiscal prudence. This means that big ticket items need to be made financially available to the masses. Many consumers only look at the monthly payment, they don't care what the interest rate is or how long the term is. This is why the average person in the US carries $16,000 in credit card debt.

We purchased our first boat (an 18 foot Maxum bow rider with a 3.0 liter engine) for cash. We had that boat for 5 years until we absolutely out grew it. It wasn't flashy or fast or hip or phat or lit or whatever other word my kids use. It was fun and cheap. Once we decided that it was time to upgrade we didn't upgrade to a brand new boat, we bought a 10 year old Yamaha AR230 for which we paid 50% cash with a plan to pay off the balance within 2 years (done).

Would I like to have a brand new boat with all the bells and whistles, you bet I would. Do I want to pay $70,000 for it or finance it for an extended period of time, not a chance. I don't begrudge those with a risk tolerance lower than mine; I also don't have a problem with dealers offering financing for 20 years. Someone has to provide inventory for the used boat markets! I just hope that I've educated my kids well enough to understand the potential burden that debt can be and to lean to the more prudent side of consumerism.

Well said. My thought process is if I have 9-10 months worth of living expenses in savings, investing in 401k and Roth IRA's, no other debt other than mortgage, able to comfortably afford the boat payment along with all the other expenses associated with boat, and keep my debt to income ratio very low, then I am willing to take that risk. The issue is some will opt for the payments and not be in a sound position to do so. That is when you get in to trouble.

 

[robert843]

240 months is crazy. I feel the same way as many on here I don't like payments but will do it when it makes sense. For example my boat is currently financed but my credit union gave me 1.9% interest at 60 months so the total interest I will pay over those 60 months is low and I would rather hold my liquid cash. 15 year loans I'm a little more Leary of being a financial win by holding my money especially if you plan to pay it off short term any way as you will drastically over pay in interest on the automization schedule.

 

[robert843]

Most staggering thing I got from this is the average American having $16,000 in credit card debt is that a true figure? Thats crazy if it is is I can't stand charging anything on my cards I couldn't imagine not paying them in full every month. I would be sick to my stomach everyday if I had that kind of credit card debt.

 

[Peelz]

think they'd do that on a 190?

<counts pennies>

 

[rkluck]

Agree with all the comments. We financed at 1.99 for 15 years. For what little we pay in interest it is worth it. Boat will be paid off shortly (paying extra every month). We have cars with no interest or very low interest loans. If needed I can always pay the boat off but no reason too yet. I thought 15 years was crazy for a boat (or a car or anything like that). 20 years is way out there.

 

[BoaterGuy]

Barring a bailout, the risk on the 240 month is all on the lender. They are the ones that take the hit for both upside down loans and defaulting borrowers.

When you take a loan out for that long there is no risk to the borrower if they dont sink a large down payment into it.

Just my 2 cents...

 

[Andy S]

Most staggering thing I got from this is the average American having $16,000 in credit card debt is that a true figure? Thats crazy if it is is I can't stand charging anything on my cards I couldn't imagine not paying them in full every month. I would be sick to my stomach everyday if I had that kind of credit card debt.

Since I found this on the internet it must be true.

 

[Wayloncle]

Most staggering thing I got from this is the average American having $16,000 in credit card debt is that a true figure? Thats crazy if it is is I can't stand charging anything on my cards I couldn't imagine not paying them in full every month. I would be sick to my stomach everyday if I had that kind of credit card debt.

Truthfully, I thought it would be higher.

I've worked with a lot of people that shocked me when I found out how much they owe on Credit cards, and those cards had ridiculous rates. One guy that worked for me was always struggling financially, he had a 15 year old truck that he had owned for a year, his interest rate was 34%. He told me it was the only way he could buy a vehicle, what perplexed me even more is he had $200K handed to him about 3 years before this, all money was gone with nothing to show for it and further in debt than he had been before he fell into the $$. It took me a while to understand how he accomplished that task.

I've never been monetarily wealthy. My first wife set me back pretty bad for the short time we were married and it took me a couple years to pay off what debt she left me.
After that, I've been comfortable and smartly afforded some toys with smart decisions with money. I got a loan for my boat, we thought about paying cash but it just didn't make sense to with the interest rate I got with it.

My wife asked my 9 year old the other day if he thought we were rich, he said "yeah, kinda", she replied with "we are far from being rich....". I gave them my thought on how it is relative, to people that make millions of dollars a year we are not rich at all but to other people that are struggling they see us as being very rich because we have a nice house, boat, decent vehicles, we get to do things that some people can't afford and don't do things that some people can afford and we can't (or won't).

It bothers me sometimes how my wife makes comments like we are struggling to our son:-/

 

[robert843]

Since I found this on the internet it must be true.

View attachment 33023

Wow the average American has 50k in student loans as well holly crap! no wonder they finance boats for 20 years it sounds like that's the only way the average American can afford it.

 

[mattschepker]

Eventually is going to buy them in the butt. Nothing's getting cheaper just more expensive. Before you know it will have 30 and 40 year car loans and boat loans

 

[Julian]

I do not have a boat yet, but am planning to purchase within the next year. I plan on financing for 15 years, and see nothing wrong with that if I can get a loan for 3 to 4% interest. I am not really a fan of debt, and only have a mortgage at this point. I would much rather keep my $ liquid, and in the bank. I plan to put down 15-20%, and pay extra each month so if I ever did need to sell, I wouldn't be upside down. Personally, I do not see why some (not calling anyone out on this thread!) bash others for doing this. I have seen it elsewhere, but not here. Oh, but yeah 240 months is stretching it. 180 would be my absolute max.

Yeah...everyone's situation is different for sure, and everyone's tolerance for debt is different too. No reason to bash someone for taking bigger risks...it is just a different approach.

When my parents got into boating we bought a dirt cheap Imperial I/O...I spent months hunting the newspaper ads for a boat under 10K that had a decent engine and well maintained outdrive. Bought it for $7500 and kept it for 7 years. My dad made it very clear that buying a new boat was not in the cards....and to this date he never has himself. The first boat I personally bought was my Yamaha LX210, it was 20K new and I think we financed some % of it for 3 years and paid it off in 1. Bought my SX230 with proceeds from the sale of LX210 and cash. Will probably finance the next one as I have an eye on the 24' E-Series boats....but 3 years at most.

 

[MattFX4]

Yeah...everyone's situation is different for sure, and everyone's tolerance for debt is different too. No reason to bash someone for taking bigger risks...it is just a different approach.

When my parents got into boating we bought a dirt cheap Imperial I/O...I spent months hunting the newspaper ads for a boat under 10K that had a decent engine and well maintained outdrive. Bought it for $7500 and kept it for 7 years. My dad made it very clear that buying a new boat was not in the cards....and to this date he never has himself. The first boat I personally bought was my Yamaha LX210, it was 20K new and I think we financed some % of it for 3 years and paid it off in 1. Bought my SX230 with proceeds from the sale of LX210 and cash. Will probably finance the next one as I have an eye on the 24' E-Series boats....but 3 years at most.

Ha that reminds me of my past. My sister and I talked our parents in to buying a boat when we were younger. I was 11 years old at the time, but was determined to find a boat for us. I searched and searched boat trader for a good used boat because buying something new was not even an option for my parents. We ended up finding a 1990 Thundercraft 1650ss with an 88 hp outboard Johnson engine who a family friend agreed to sell us for $3,500. This was in 1993 so the boat was only 3 years old at the time. My parents still own this boat, and it runs like a champ. My dad has kept it up really well over the years, and it looks great to be 26 years old. Amazing how things have changed since then.


lol found a pic of my parents boat behind my truck from last summer. Little thing gets tossed around in the wake of all the bigger boats.