Getting my first boat, here we go again
Jay Dee
used boat we were looking at. After going on a test ride, we shot it
down. The boat was woefully underpowered.
ANYWAY, we are now looking, very seriously, at a brand new Sea Swirl 250
aft cabin. I would like to ask if you all out there think this is a fair
price (their first offer), and other tips and tricks on buying a new boat.
The boat:
1998 Seaswirl 250 aft cabin
LOA 25'9" 102" beam
5.7l Volvo stern drive, 280 max HP
5,400 lbs
68 gal tank
The trailer
Calkins (sp) 6000lb with brakes
The asking price:
43,000 at 10% for 15 years (them)
43,000 at 9%ARM for 6 years (our bank)
This does not include any ground tackle, electronics (other than
instruments and AM/FM/cassette, or CG required equipment.
Looking at it in the lot, is seems to fill our needs very well, and we
really like the layout of the whole boat.
Another note. We can't check for similar boats at other dealers, as this
guy is currently the ONLY new boat dealer on the island of O'ahu.
Any comments, positive or negative would be appreciated.
RBStern
>The asking price:
>
>43,000 at 10% for 15 years (them)
>43,000 at 9%ARM for 6 years (our bank)
>
I can't comment knowledgeably on the boat, but here's a couple of comments on
the financing:
I would recommend against a 9% ARM unless you are very clear on the adjustment
formula. Many ARMs use a "teaser" initial rate with a formula that nearly
guarantees a rate increase in future loan years. In a climate where interest
rates are basically close to rock bottom, most ARMs are not a good bet.
I have also noticed that many consumer banks are not competitive with boat
finance companies. It's not their main business, they don't know the risks
well, hence the interest rate has a large fudge factor to cover their extra
exposure. Last time I asked my bank about a boat loan, they gave me a 13%
quote when boat finance companies were quoting 8%.
If you own your own home and have $43,000 or more of equity in it, you can get
a second mortgage. That should come in a couple of interest points lower than
what you've been quoted for boat loan. It can be 15 years, 25 years, 30 years,
and you can pay it off faster if you want a shorter loan.
Also, look around some at more boat lenders. With good credit, you should be
able to get in the low 8% range (fixed rate) for that size loan for 10 or 15
years.
A comment for folks out there who want some tax benefit from your boat loan:
Boats with living facilities (potty, stove, bunk) can be considered a second
home and interest on a loan for that boat can be claimed as a deduction on your
taxes. For folks who's boats don't qualify as a second home (runabouts, center
consoles, etc.), if you finance it with a home equity loan, the interest can
usually be deducated from the tax bill.
Don't know if most people realize that, so I figured I'd throw it in.
Ugh. Writing about taxes makes me realize that I have to go finish mine...
Good luck.
Rich Stern
Russ Glindmeier, CFP
RBStern wrote in message <19990406100215...@ng-ch1.aol.com>...
This just happens to be an area that I am familiar with at a professional
level as well as personal. All off Rich's information is accurate. Since
the 25' aft cabin would qualify as a second home, I would use a marine loan
to finance and get the second home deduction, unless of course you already
have a second home and are currently using the deduction (you only get one).
I would leave the HECL option open for other needs, since the boat gives you
its own tax deduction.
The best thing about borrowing through the dealer is convenience. The worst
thing is the cost. You didn't think the dealer was going to sell you money
without a (deserved) markup did you? If you are willing to do the leg work
yourself, you can save that cost. Also, Rich's comments about most banks
not being competitive with marine loans is also true. Use a marine lender
or loan broker. I just finished refinancing my boat. The interest rate is
a fixed 7.75% over 168 months (weird term, but it was the remaining term on
the old loan). The lender is First Union Bank, but I did the loan through
Essex Credit Corp., a major marine loan packager. They have offices up and
down both coasts, but I did all my stuff over the phone, fax, and FedEx. My
contact was Jim Vorhees at 800-366-1133 at the Newport Beach, CA office.
I don't have any input regarding the Seaswirl. We no longer have a dealer
in our area and haven't seen one in years. I believe they are an OMC
company, near the lower end of OMC's price point strategy with their boat
companies. For a good comparison, see if you can look at a Four Winns 268
Vista. Four Winns is also an OMC company, and I believe they have
positioned themselves a notch above the Seaswirl line. Not saying the
Seaswirl isn't a decent boat, but it the closest comparison I can think of.
Russ
Jeff
<ru...@att.net> wrote:
>
>The best thing about borrowing through the dealer is convenience. The worst
>thing is the cost. You didn't think the dealer was going to sell you money
>without a (deserved) markup did you? If you are willing to do the leg work
>yourself, you can save that cost. Also, Rich's comments about most banks
>not being competitive with marine loans is also true. Use a marine lender
>or loan broker. I just finished refinancing my boat. The interest rate is
>a fixed 7.75% over 168 months (weird term, but it was the remaining term on
>the old loan). The lender is First Union Bank, but I did the loan through
>Essex Credit Corp., a major marine loan packager. They have offices up and
>down both coasts, but I did all my stuff over the phone, fax, and FedEx. My
>contact was Jim Vorhees at 800-366-1133 at the Newport Beach, CA office.
>
I went through First Union directly (I also have several other
accounts with them). They offered me a 7.49% fixed rate or a 6.99%
adjustable. I went with the fixed rate. Terms for the loan were up
to me, and I chose 9 years to get payments down. During the winter
months (all two of them here in NC), I'll slip in some extra payments
to get ahead.
For comparison, the Coastal Federal Credit Union (old IBM CU) only
offered something like 12%. Terrible rate, especially for a CU. My
boat dealership was offering 8.99% fixed, through Nationsbank. Many
of the super low rates offered by marine lenders have minimum amounts
to borrow, be sure to ask.
Shop around, you can save some serious bucks.
Jeff
Sorry, but email address disguised due to unscrupulous spammers. Please respond in Usenet.
Gould 0738
price of
$38,900.
Apparently, the one you are considering is a
"new" boat, and will be so until 1.6 seconds after you take delivery.
The BUC price doesn't include the trailer, and many used boats will have extra
equipment aboard acquired by the previous owner.
At $43k for a new boat, with trailer, it sounds lke a reasonably fair but not
barn burning deal.........but I have no accurate knowledge of the local market
conditions in Hawaii.
In a humorous vein, it is often rather pointless to try and proceed in a
careful and logical manner when doing anything as illogical (or as happily
rewarding) as buying a boat.
Good luck.
Russ Glindmeier, CFP
Jeff wrote in message <370a386a...@news.mindspring.com>...
>
>I went through First Union directly (I also have several other
>accounts with them). They offered me a 7.49% fixed rate or a 6.99%
>adjustable. I went with the fixed rate. Terms for the loan were up
>to me, and I chose 9 years to get payments down. During the winter
>months (all two of them here in NC), I'll slip in some extra payments
>to get ahead.
>
>For comparison, the Coastal Federal Credit Union (old IBM CU) only
>offered something like 12%. Terrible rate, especially for a CU. My
>boat dealership was offering 8.99% fixed, through Nationsbank. Many
>of the super low rates offered by marine lenders have minimum amounts
>to borrow, be sure to ask.
>
I called First Union directly, and unfortunately they do not do loans direct
to customers in my state, so I was forced to go through a dealer/broker. I
would assume that the broker is getting the .25% that I am paying over your
rate, which is reasonable. The reason I refinanced was because the previous
lender had some serious customer service shortcomings. I went with First
Union because I was looking for a lender that sends monthly billing
statements that shows receipt and application of the previous month's
payment, including the principal and interest breakdown. I was told that
First Union sends such a statement, but I haven't received my first one yet.
Has that been your experience with them, Jeff?
Russ
Jeff
I haven't made my first payment yet, it comes up on the 20th of this
month. With a previous installment loan from FUNB, they did not do
that. I would imagine that you have to specifically request that
information. I do recall that you can get payoff information, payment
due dates, last payment, etc. via a 24hr access telephone number.
danny dickerson
(15-20') boats with notes of 11 years.
Many advertise rates of 10-12%. Consider
what that adds to the cost of the boat!!!
The most I would go on these is 6 years.
If I had to go longer than that, I would figure
that I could not afford the boat.
Danny
Jeff wrote in message <370a386a...@news.mindspring.com>...
Russ Glindmeier, CFP
Jeff wrote in message <370a6f8b...@news.mindspring.com>...
>>
>>
>
>I haven't made my first payment yet, it comes up on the 20th of this
>month. With a previous installment loan from FUNB, they did not do
>that. I would imagine that you have to specifically request that
>information. I do recall that you can get payoff information, payment
>due dates, last payment, etc. via a 24hr access telephone number.
>
>
information and mine conflicted re FUNB, I went back and reviewed my notes.
As it turns out, my new lender is in fact Nations Bank, not FUNB. It will
sink in as soon as I get my copies of the docs back and set up the loan in
Quicken.
Russ
Russ Glindmeier, CFP
danny dickerson wrote in message <7ee51p$ooa$1...@remarQ.com>...
>It amazes me that dealers can sell small
>(15-20') boats with notes of 11 years.
>Many advertise rates of 10-12%. Consider
>what that adds to the cost of the boat!!!
>
>The most I would go on these is 6 years.
>If I had to go longer than that, I would figure
>that I could not afford the boat.
>
>Danny
Your position is conservative and probably the most appropriate strategy for
most people. However, there is a concept called arbitrage, and while
certainly more aggressive, can make sense as well. In my case, my boat is a
27 foot cruiser and the original term of the loan is 15 years. I will never
own the boat for anywhere near 15 years. Even though I bought the boat at
about $10k under retail book value, I will never build a large amount of
equity in the boat. Why would I enter such an arrangement? First, equity
in a depreciating asset isn't all it's cracked up to be. Second, and more
importantly, thanks to the combined effects of the current interest rate
environment and current tax policy, I am able to borrow the money at an
after-tax cost of about 5%. That is cheap money, assuming you feel
confident that you can put the money to work elsewhere and earn a multiple
of the cost. I feel the chances of that are very good in this economic
environment and feel comfortable assuming the inherent risks of playing the
spread (the arbitrage). Based on that posture, it makes sense for me to
leverage the boat to its maximum and build the equity in an appreciating
asset rather than a depreciating one. For the concept to work, not only
must the cost/earnings spread be in my favor, but obviously it requires me
to have the necessary discipline to capture the cash flow created by the
loan terms and get it working. Food for thought.
Russ
Russ Glindmeier, CFP
Jay Dee wrote in message <7ec2d5$838$1...@mochi.lava.net>...
>Here we go again. I would like to thank those who gave me advice on the
>used boat we were looking at. After going on a test ride, we shot it
>down. The boat was woefully underpowered.
>
>ANYWAY, we are now looking, very seriously, at a brand new Sea Swirl 250
>aft cabin. I would like to ask if you all out there think this is a fair
>price (their first offer), and other tips and tricks on buying a new boat.
>
>The boat:
>
>1998 Seaswirl 250 aft cabin
>LOA 25'9" 102" beam
>5.7l Volvo stern drive, 280 max HP
>5,400 lbs
>68 gal tank
>
>The trailer
>
>Calkins (sp) 6000lb with brakes
>
>
>43,000 at 10% for 15 years (them)
>43,000 at 9%ARM for 6 years (our bank)
>
>instruments and AM/FM/cassette, or CG required equipment.
>
>Looking at it in the lot, is seems to fill our needs very well, and we
>really like the layout of the whole boat.
>
>Another note. We can't check for similar boats at other dealers, as this
>guy is currently the ONLY new boat dealer on the island of O'ahu.
>
>Any comments, positive or negative would be appreciated.
>
>John
>jayd...@hotmail.com
Another thought did come to mind: Since you made the comment that the
earlier boat you looked at was woefully under powered, it occurs to me that
you might have some of the same feelings about a 25' cruiser with a single
small block. Having owned a 25' cruiser with a big block, and feeling that
more horsepower and torque is always better than less in a boat, I would
recommend that you give serious consideration to upgrading the power plant
in the boat to the 7.4 liter package, assuming it is offered (and it ought
to be). Not only will it enhance your enjoyment of the boat, but it will
enhance resale as well. The long term cost of upgrading is probably not
that much. Also, get the Duo-prop and EFI.
Russ
Thomas Komadina
existing boat, however. I have a 96 Seaswirl cuddy, 20 footer with the 5.0 EFI and it is a nice engine for this boat. Seaswirls are well made if my experience is any indicator. They are solid and they did the things that should be right, right ie the hull is solid with a beautiful gelcoat that doesn't oxidize ( so far ). The workmanship is good. It isn't as fancy as a Cobalt, or Chaparral but the value is hard to beat. I think you will find it to be a fun boat that does what you want it to and you won't have buyers regret. I looked at a Four Winns here in Reno and I wasn't as impressed as I was with the Seaswirl. They also are relatively easy to sell ( I live in the Lake Tahoe area), should you decide to upgrade at some point. When Tahoe gets its afternoon wind and 4 foot waves, there are plenty of boats I wouldn't want to be in but the Seaswirl does fine.
Tom
Jay Dee
Thanks for the advice! I'm seeing that buying a new boat is a lot like
buying a new car.
The only problem we have with a used boat, is an appalling lack of quality
used boats in the area, especially power boats. Sailboats are cheap, with
30 footers going for 10-15k. However, we want the speed to go interisland
that only a powerboat can provide.
Your first and last paragraphs are sooooo true.. <grin>
Thanks again.
John