You may be surprised to learn that you can finance a new boat just like a new car. Like car dealers, bankers and boat dealers can help you obtain affordable financing to make your dream of owning a boat a reality. The information below will lead you to information to help you navigate the ins and outs of boat loans and make the process smoother.
Boat Loan Sources – Find a Specialist
Not too long ago, finding a lender that made boat loans was a difficult task. Today the more difficult task may be to decide which lender to use from many to choose. When lenders discovered that most boat buyers were excellent clients for loans, many added boat loans to their more traditional auto and real estate offerings. Some of these lenders decided to specialize in the boat loan business, devoting funding and staff for the purpose. Many of these lender specialists are members of the National Marine Bankers Association. In any active boating market, there will be several sources for boat loans. It's a good idea to compare rates and terms offered by several loan sources to determine the financing best suited for the intended purchase. Lenders include:
- Banks - Many local, regional, and national banks are members of National Marine Bankers Association and offer boat loans directly to their customers. Start with your own bank and call them or check their Website to see if they finance boat purchases. Inquire about rates and how long a loan term is available for the boat you are considering. Some banks advertise in boating magazines and publications. They seek your business and will have boat-savvy people available to address your needs.
- Financial Service Companies - Financial service companies maintain relationships with local, regional, and national lenders, giving them broad access to finance programs. They are experts in the marine lending field, and many are members of the National Marine Bankers Association. You will see their advertisements in boating publications, so call for rates and terms and get an idea of anticipated application turn around and funding time.
- Credit Unions - If you are a member of a credit union that makes boat loans, be sure to contact them. They usually have attractive rates for their members, and many are interested in making boat loans. If they have marine lending specialists on staff, they should be able to offer a competitive loan.
- Dealers - They usually have established relationships with several finance sources and have access to extended warranty programs that can be included in your financing. Dealers may have special finance programs on certain brands or models because of their relationship with boat manufacturers. These programs can be advantageous to you, such as a delayed first payment, no interest for several months, or lower rates for a limited time
Fore more information about boat financing, visit http://www.discoverboating.com/buying/financing/default.aspx
Boat insurance policies can vary widely from one company to the next, unlike home or auto insurance. Which type is best for you? Boat U.S., the nation's largest recreational boat owners association, has some tips for you.
- Ask around: One way to find a good insurer is to ask friends who have had a claim in the past. Insurance companies may be good at taking monthly premiums, but how a company lives ups to expectations when something goes wrong is a better indicator. You can also research potential insurance carriers at www.ambest.com/ratings The ratings are the industry's benchmark for assessing an insurer's financial strength; look for an "A" rating (excellent) or better. State insurance regulatory agencies are also a good reference and can be found online.
- Homeowner's or separate policy for the boat? Consider buying a separate insurance policy for the boat, rather than adding it to your homeowner's policy as the latter often limits certain marine-related risks such as salvage work, wreck removal, pollution or environmental damage. Whatever amount the boat is insured for, it should have a separate but equal amount of funds available for any salvage work. This means that you're compensated for the loss of your boat and not having to pay additional, out-of-pocket costs to have a wreck removed from a waterway.
- Agreed Value vs. Actual Cash Value: These are the two main choices that boater's face and depreciation is what sets them apart. An "agreed value" policy covers the boat at whatever value you and your insurer agree upon. While it typically costs more up front, there is no depreciation if there is a total loss of the boat (some partial losses may be depreciated). "Actual cash value" policies, on the other hand, cost less up front but factor in depreciation and only pay up to the actual cash value at the time the boat is declared a total or partial loss or property was lost.
- Your needs first: A good insurer will tailor your coverage to fit your needs so there will be no surprises. For example, bass boaters may need fishing gear and tournament coverage as well as "cruising extensions" if they trailer their boat far from home. You may want "freeze coverage" if you live in a temperate state because ironically, that's where most of this kind of damage occurs. "Hurricane haul-out" coverage helps foot the bill to move your boat to dry ground.
This is information is presented by Boat U.S., the nation's largest recreational boat owners association.
To learn more about Insurance options for your boat, review our helpful FAQs (http://www.discoverboating.com/buying/insurancefaq.aspx)