Boat loans – how long?

[bigwaves]

@biffdotorg - one of the marinas near us is selling Montara surfboats now. They look like a pontoon up top but have a monohull with V drive. They look neat for space and whatnot but one of the things I can't abide with pontoons in general is the fact that in heavy seas, your chances of stuffing the bow are substantially higher than a boat with actual gunwales.

Damn! Now I don’t know what to do! I was all set on getting a HeyDay! Now you show me a Montara! Which one!??????

 

[swatski]

I am hoping to buy a new (or gently used) boat next year, after we move into our new home. I never like to be underwater on any loans on a depreciating asset, so when I buy my new boat, I likely will put 15% down and finance the rest.

I’m wondering how many years folks typically get a boat loan?

Does anyone think “X” number of years is too long? If so, why?

Jim

If you want to keep the loan, I wouldn't go over 5-6 years.

Most popular boat loans these days are for 15-20 years. What you get with it, say a stated interest rate is 5%, you pay over 50% actual interest, annually, for the first 5-10 years.

You will literally pay above 70% effective interest rate for the first few years... Being upside down is a given there. With notable exceptions of sudden, unsustainable (i.e. short term) market fluctuations upward, such as it was the case last year, but those are not normal conditions.

Many people do not think about it, but it is true. You lose so much money early on, it makes most sense to pay those longer loans off immediately, or keep them for the term. But how many of us are keeping a boat for 20 years?

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