Don’t let yet another summer pass you by fantasizing about owning your very own dream boat. Consider financing as a way to get you on the open waters sooner rather than later.
According to Will Walker, president of Walker Financial Services, it’s about timing. “Would you rather be boating this year? Or how long would it take you to save up the money to buy that boat? It accelerates things.”
Walker believes it is in one’s best interest to finance a boat rather than spend their own money, even if the have it readily available. “A boat is a depreciating asset,” he says. “If I had the cash, there are a number of things I could do with that. It is recommended that you use other people’s money for a depreciating asset and keep your own.” He suggests investing in stocks for example. “Stocks give you the ability to sell them in case of an emergency where you might need the money…A lot of people work hard for their money. That’s their nest egg. It increases your financial flexibility by having money in the bank and a loan.”
In some ways, financing a boat is comparable to financing a car. But the big difference between the two is the length of time that the loan can be spread out. “Car loans can go from 5 to 7 years while boat loans can go as long as twenty years. It helps keep the payments low,” says Walker.
With the convenience of the internet, you can be approved for a boat loan in a matter of minutes. “If you are squeaky clean, you can be approved as quickly as it is to type in the application,” he says. This process varies, of course, depending on each person’s situation.
According to Walker, when someone applies for a boat loan, the banks ask two important questions: “Is the person able to make the payments and do they have a habit of making their payments?” Walker also mentions that they may consider a snapshot of their assets. “Are they fiscally responsible?” For example, if someone has held a steady job for about 20 years and has no assets or rrsps to show for it…where is his money going?”
If you are deciding between purchasing a new or a used boat, keep in mind that there really is no difference between financing a new boat and a boat that is less than 7-10 years old and from a dealer. “But if you purchase the boat from someone’s front lawn or it is ten years old then the rates will vary,” says Walker.
Rates vary depending on how much you borrow. The higher the loan, the lower the rate. But the rates remain competitive and can change from day to day.
According to Walker, at Walker Financial Services they do everything they can to find the best deals for their customers. “We are pooling 250 dealers together. We have access to the best rates out there. Small dealers don’t always get the best rates,” he says.
Their approach is to find packages that suit their customers’ needs. “Each bank has a slightly different program. Not all deal with boats and the ones that do, vary slightly. We can customize the loan to the customers’ best interests knowing how each bank and firm varies. By interviewing we are able to go to the source and find the right package for them,” says Walker. “We try to get the lowest rate, the lowest down payment or the lowest monthly rate. We choose one depending on the client.”
When it comes to packages, Walker says most, “…can go up to 20 years. There is usually a fixed rate for the first five years. No collateral. And there are no penalties for early pay out.”
His says his best advice to customers is to at least put the taxes down. “…so that they are not financing the taxes. Many people want to trade their boat after a few years. The boat may hold its value but it won’t hold its value plus taxes,” he says.
He also advises that, “Because loans are open, don’t be too aggressive with your monthly payments. You want to be able to afford your boat. Keep the payments at a level where you can enjoy your boat.”
For more information along with access to a loan counter (where even the latest rates are taken into account) please visit: www.toyloan.com