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Seek recommendations for sources of boat loans
- Thread starter Gratitude
- Start date
Don and Brenda
New member
Hi Jim
My C-Dory was through Bank of America, but I believe they changed their loan policy now to very large boat loans only. US Boat finances but on the west coast they did not have a bank to service them, but they will give you some names. If you buy Honda power they usually have financing the whole boat and motor. My current boat was done by a broker which was Trident funding, all paperwork will be via email and fax. My rate in Sept. on the Ranger tug was 4.99%
Don
My C-Dory was through Bank of America, but I believe they changed their loan policy now to very large boat loans only. US Boat finances but on the west coast they did not have a bank to service them, but they will give you some names. If you buy Honda power they usually have financing the whole boat and motor. My current boat was done by a broker which was Trident funding, all paperwork will be via email and fax. My rate in Sept. on the Ranger tug was 4.99%
Don
Since most boats are play toys and not necessities (like a car), one thing to consider is that most boat (and RV) loans require a 20% down payment.
On the other hand, some boats (like a C-Dory) can qualify as second homes and then the loan interest can be a tax deduction. To qualify as a home, the boat must have a separate sleeping area, cooking facilities, and a toilet. If you have a C-Dory with berth, stove, and a porta-potti, it qualifies. You have to spend at least 14 nights a year on it to claim the deduction.
On the other hand, some boats (like a C-Dory) can qualify as second homes and then the loan interest can be a tax deduction. To qualify as a home, the boat must have a separate sleeping area, cooking facilities, and a toilet. If you have a C-Dory with berth, stove, and a porta-potti, it qualifies. You have to spend at least 14 nights a year on it to claim the deduction.
Matt Gurnsey
New member
Key Bank usually has pretty good boat loan terms. People's Bank has a boat loan program.
On an older boat you will probably need a survey to determine value, as NADA and other guides don't value C-Dory's properly.
On an older boat you will probably need a survey to determine value, as NADA and other guides don't value C-Dory's properly.
USAA is certainly excellent. We have used them a number of times in the past for various vehicle loans. One of the issues with the C Dory is also price. NADA does not reflect the going prices of a C Dory (even with the outboard and trailer allowance). You have to refer the bank to this web site to see the selling prices.. You may have difficulty with a boat which is over 10 years old. Agree that a survey will help. Although I don't normally recommend this-you can consider a second on your home. You won't get the deduction, but it may be a far better rate. (I know that seconds are harder to get these days). It helps to have the loan pre-approved when you are negotiating on the boat.
potter water
New member
What you don't need when your are buying a C-Dory with all of its mystique and luring qualities and your "really want it" bone in high chat, is someone to give you a treatise on using caution in boat buying. BUT...not knowing your age or situation in life, I have a few thoughts that may be useful, or downright insulting. They are however based on my middle class background and having bought and lost a LOT of money on motorized toys over the years.
1. There is nothing wrong with wanting a nice boat and the C-dorys are in fact, very nice boats.
2. Boats fall into two classes, disposables, and C-dorys. The disposables have common names, familiar to us all...bayliner being one of many. Some people call them milk-bottle boats. In any case, C-dory and a very small group of other boats are built for the maximum pleasure over the longest period of time. So, you are on the right track for a boat.
3. All boats, including C-dory, over the first year or two are never as thrilling as they seem in the beginning. The new boat buyer needs to be particularly aware of his or her ability to choose quality and long term enjoyment over immediate gratification of something powerful and painted nice and equipped for maximum escape from the humdrum of daily life. (Hmmm, kinda sounds like picking a wife or husband.) Another way to put it is that some boats are marketed to front load the pleasure to get you to put out the maximum price. The letdown comes a couple year later. You won't find that with C-dorys.
4. If you haven't bought a lot of boats over the years, consider carefully buying a well used, but well maintained C-Dory, even if it is 20 plus years old. If it has been maintained, you will be buying a nice boat for 20 or 25 grand instead of 50 to 70 grand.
How does this obvious stuff relate to your post? Even if full financing is available, it is a sucker deal over the life of the loan. And, stuff happens and that big ol' monthly payment may be a real albatross in the future. The 20% rule is a good one. My boat and other powered toy buying has always been with 50% down. That way I KNOW that I can get out from under that loan within a week or two because my boat will sell easily and at least cover the loan balance even if I have to sell it in the off season.
Consequently, in my personal financial position, that keeps me in the used boat market. That is a rich market. After all, a well built and maintained boat has a near infinite life when re-powered and re-electronic'd over the years.
So, I would always recommend that you find a boat that fits your ability to put 20 to 25% cash down, or even more if you can, and end up with payments that are relatively trivial to your own financial position.
You will be able to find C-dorys that are solid and with long life left on motors and electronics for half or a third the price of a new one. Someone else will have taken the major depreciation hit of the first year of two.
Now, if you are one of those folks who can pony up the money for a brand new boat, then god bless you. Without folks buying the new ones, then there would be fewer good used boats on the market for guys like me.
In any case, a boat is only as valuable as the amount of time you spend using it. Some boats cost their owners a thousand dollars and hour over the life of the owners owning that boat. because they use is so little. Others will own that same boat and only be paying a few bucks an hour because they put so many hours on their boat.
I hope you are or will be the latter.
So, there are my stream-of-consciousness thoughts which may or may not apply to your situation.
Oh, to comment on what you asked, I've done all of my boat and toy buying through a credit union. They seem to have more understanding and flexibility than any bank I've ever worked with.
Cheers, and happy C-Dory...ing.
1. There is nothing wrong with wanting a nice boat and the C-dorys are in fact, very nice boats.
2. Boats fall into two classes, disposables, and C-dorys. The disposables have common names, familiar to us all...bayliner being one of many. Some people call them milk-bottle boats. In any case, C-dory and a very small group of other boats are built for the maximum pleasure over the longest period of time. So, you are on the right track for a boat.
3. All boats, including C-dory, over the first year or two are never as thrilling as they seem in the beginning. The new boat buyer needs to be particularly aware of his or her ability to choose quality and long term enjoyment over immediate gratification of something powerful and painted nice and equipped for maximum escape from the humdrum of daily life. (Hmmm, kinda sounds like picking a wife or husband.) Another way to put it is that some boats are marketed to front load the pleasure to get you to put out the maximum price. The letdown comes a couple year later. You won't find that with C-dorys.
4. If you haven't bought a lot of boats over the years, consider carefully buying a well used, but well maintained C-Dory, even if it is 20 plus years old. If it has been maintained, you will be buying a nice boat for 20 or 25 grand instead of 50 to 70 grand.
How does this obvious stuff relate to your post? Even if full financing is available, it is a sucker deal over the life of the loan. And, stuff happens and that big ol' monthly payment may be a real albatross in the future. The 20% rule is a good one. My boat and other powered toy buying has always been with 50% down. That way I KNOW that I can get out from under that loan within a week or two because my boat will sell easily and at least cover the loan balance even if I have to sell it in the off season.
Consequently, in my personal financial position, that keeps me in the used boat market. That is a rich market. After all, a well built and maintained boat has a near infinite life when re-powered and re-electronic'd over the years.
So, I would always recommend that you find a boat that fits your ability to put 20 to 25% cash down, or even more if you can, and end up with payments that are relatively trivial to your own financial position.
You will be able to find C-dorys that are solid and with long life left on motors and electronics for half or a third the price of a new one. Someone else will have taken the major depreciation hit of the first year of two.
Now, if you are one of those folks who can pony up the money for a brand new boat, then god bless you. Without folks buying the new ones, then there would be fewer good used boats on the market for guys like me.
In any case, a boat is only as valuable as the amount of time you spend using it. Some boats cost their owners a thousand dollars and hour over the life of the owners owning that boat. because they use is so little. Others will own that same boat and only be paying a few bucks an hour because they put so many hours on their boat.
I hope you are or will be the latter.
So, there are my stream-of-consciousness thoughts which may or may not apply to your situation.
Oh, to comment on what you asked, I've done all of my boat and toy buying through a credit union. They seem to have more understanding and flexibility than any bank I've ever worked with.
Cheers, and happy C-Dory...ing.
DuckDogTitus
New member
Matt Gurnsey":2xrepk84 said:Key Bank usually has pretty good boat loan terms. People's Bank has a boat loan program.
On an older boat you will probably need a survey to determine value, as NADA and other guides don't value C-Dory's properly.
I called around and most seem to agree that keybank is one of the best for boats. However, they appraised my boat at half what I paid. I still used them and covered the other half creatively. My boat is 25 yrs old. Keybank did not care about what cdorys sell for, surveys, or anything else, only nada, and then minus a percentage.
Bank of the West has an excellent boat loan program , thats who we write through exclusively. Used boats are always an issue with C Dory if they are older and in good shape. 2 things affect rate , loab to value [your equity] and credit score . Have written 3.99% loans this year on larger purchases with correct parameters met.
Marc
Marc
Call a few local credit unions. In WA that's where I had the best luck.
HAPO Community Credit Union finances 100% of appraised value plus tax/licensing (if needed) with rates 5.99% and up on older boats.
BECU will finance up to 20% with required 20% down but at rates of 3.99%. And for those of you in WA, they will finance up to 100% of appraised value at 3.99% if you already have a loan through another lender. I had purchased my boat through HAPO but then ended up swapping to BECU only 2 months later after learning that. No fees and took about 4 hours. They both used my marine survey/appraisal for the value vs. NADA/BUC.
Troy
HAPO Community Credit Union finances 100% of appraised value plus tax/licensing (if needed) with rates 5.99% and up on older boats.
BECU will finance up to 20% with required 20% down but at rates of 3.99%. And for those of you in WA, they will finance up to 100% of appraised value at 3.99% if you already have a loan through another lender. I had purchased my boat through HAPO but then ended up swapping to BECU only 2 months later after learning that. No fees and took about 4 hours. They both used my marine survey/appraisal for the value vs. NADA/BUC.
Troy
DuckDogTitus
New member
tcr_pnw":30j6fysj said:HAPO Community Credit Union finances 100% of appraised value plus tax/licensing (if needed) with rates 5.99% and up on older boats.
In my experience, the appraisal is the hard part with lenders. They appraise c-Dorys far under what they actually sell for.
Just to be clear, are both the Home Equity Loan or a boat loan tax deductible? I know that we get a statement each year for the interest paid on our Home Equity Loan. Would we get the same interest statement from a boat loan, and is the interest on that loan also tax deductible as a second home.
Gratitude":3jxqovze said:Just to be clear, are both the Home Equity Loan or a boat loan tax deductible? I know that we get a statement each year for the interest paid on our Home Equity Loan. Would we get the same interest statement from a boat loan, and is the interest on that loan also tax deductible as a second home.
The definitive answer to boat loan/home equity loan questions are answered at http://www.irs.gov/taxtopics/tc505.html
starcrafttom
Active member
BECU has loaned me money on my 27 c-dory and three used cars. ( all cars are paid off now). They are great to work with on boats mostly because they have no idea what a boat is. As long as the surveyor tells them the boat is worth what you need to borrow they will lend you that amount. I only put 20% on a used boat and they lent the rest at 3.45% at that time.
Gratitude, You really need to talk to your accountant about something like this. Having said this--here is a statement from the Marine Banker's Association, prepared by an accountant in Newport Beach, CA:
"According to IRC section 163(h)(4), a boat will be considered a qualified residence if it is one of the two residences chosen by the taxpayer for purposes of deductibility in the tax year. A qualified residence must have basic living accommodations including sleeping space (berth), a toilet (head), and cooking facilities (galley). If the boat is also chartered, the taxpayer will have to use the boat for personal purposes for either more than 14 days or 10% of the number of days during the year the boat was actually rented, to qualify for the interest deduction in accordance with IRC section 280A(d)(1).
Form 1098, issued by lenders, is not necessary in order to claim the qualified interest deduction. In accordance with IRS instructions for Schedule A, form 1040, if the taxpayer does not receive form 1098, deductible mortgage interest should be reported in line 11 instead of line 10 on Schedule A.
Interest paid on a home equity loan to buy a boat also may not be deductible. Home mortgage interest deduction is limited to interest paid on home equity loans up to $100,000. By using a home equity loan, you may limit the amount of interest that is deductible, if a boat loan balance exceeds $100,000.
Borrowing against a stock portfolio to purchase a boat creates complications in regard to interest deductibility. Second home mortgage interest deduction is limited to interest paid on second homes that are secured by that second home. A written collateral agreement (security agreement) from a broker indicating the boat as collateral is something brokers are not inclined to provide.
Also get insurance as soon as you have closed the deal on the boat, before it is moved one inch. There are stories of boats having accidents on the way home on a trailer--including one C Dory which was either totaled, or nearly totaled. There is a very sad thread on The Hull Truth currently about a man who bought a boat, with a loan of about $60,000. The boat appeared to not have been rigged properly, and the dealer came to pick the boat up--at the buyer's home about 200 miles away. Somewhere in the next few hours, the boat/trailer were involved in an accident and totaled. He had no insurance--the dealer did not tell him right away about the accident, and had him sign a hold harmless waiver…then hours later told him about the accident. Currently the dealer is refusing to disclose the details of the accident. So you can see how bad things can go south very rapidly….Lets say that someone was hurt in this accident (we don't know)--and they went after the boat owner…you can see all sorts of scenerios--probably the owner would prevail--but after a lengthy legal struggle, paid by him--not an insurance company!
"According to IRC section 163(h)(4), a boat will be considered a qualified residence if it is one of the two residences chosen by the taxpayer for purposes of deductibility in the tax year. A qualified residence must have basic living accommodations including sleeping space (berth), a toilet (head), and cooking facilities (galley). If the boat is also chartered, the taxpayer will have to use the boat for personal purposes for either more than 14 days or 10% of the number of days during the year the boat was actually rented, to qualify for the interest deduction in accordance with IRC section 280A(d)(1).
Form 1098, issued by lenders, is not necessary in order to claim the qualified interest deduction. In accordance with IRS instructions for Schedule A, form 1040, if the taxpayer does not receive form 1098, deductible mortgage interest should be reported in line 11 instead of line 10 on Schedule A.
Interest paid on a home equity loan to buy a boat also may not be deductible. Home mortgage interest deduction is limited to interest paid on home equity loans up to $100,000. By using a home equity loan, you may limit the amount of interest that is deductible, if a boat loan balance exceeds $100,000.
Borrowing against a stock portfolio to purchase a boat creates complications in regard to interest deductibility. Second home mortgage interest deduction is limited to interest paid on second homes that are secured by that second home. A written collateral agreement (security agreement) from a broker indicating the boat as collateral is something brokers are not inclined to provide.
Also get insurance as soon as you have closed the deal on the boat, before it is moved one inch. There are stories of boats having accidents on the way home on a trailer--including one C Dory which was either totaled, or nearly totaled. There is a very sad thread on The Hull Truth currently about a man who bought a boat, with a loan of about $60,000. The boat appeared to not have been rigged properly, and the dealer came to pick the boat up--at the buyer's home about 200 miles away. Somewhere in the next few hours, the boat/trailer were involved in an accident and totaled. He had no insurance--the dealer did not tell him right away about the accident, and had him sign a hold harmless waiver…then hours later told him about the accident. Currently the dealer is refusing to disclose the details of the accident. So you can see how bad things can go south very rapidly….Lets say that someone was hurt in this accident (we don't know)--and they went after the boat owner…you can see all sorts of scenerios--probably the owner would prevail--but after a lengthy legal struggle, paid by him--not an insurance company!
Captains Cat
New member
My kids just used the First Bank of Dad again for a car. Not sure if I'd do boats or not... :roll:
Good luck!
Charlie
Good luck!
Charlie
BECU also has the loan on my boat. It took them some digging to come up with a value on the boat, but they came up with a good value and had no problem granting me a loan.
I talked to some other lenders and they had problems getting a decent value (probably used the NADA guides which undervalues these boats due to low volume). I guess BECU might has more experience with boat loans because of their location.
Most lenders will require a 20% down payment on boats (and RVs) because they are luxury/discretionary items, not necessities like cars and homes, and because boats and RVs can depreciate pretty fast.
I talked to some other lenders and they had problems getting a decent value (probably used the NADA guides which undervalues these boats due to low volume). I guess BECU might has more experience with boat loans because of their location.
Most lenders will require a 20% down payment on boats (and RVs) because they are luxury/discretionary items, not necessities like cars and homes, and because boats and RVs can depreciate pretty fast.