Can you get a loan for a used boat?
Buying a boat is an exciting prospect, conjuring up dreams of days on the water well spent, soaking up the sun and having fun with friends and family. But new boats don’t come cheap with price tags that can run into the hundreds of thousands of dollars. Ouch.
As a result, buying a second-hand or nearly-new model for a lower price can seem like a tempting prospect. After all, the less you pay, the lower your cost per year of ownership will be.
But can you get a loan for an older boat? And, if so, how old a boat can you finance?
The good news is you can get a used boat loan. However, you’re more likely to find competitively priced financing when the boat is less than five years old. And the older the boat, the trickier that becomes.
That’s not to say it’s impossible to finance an older model, but your options will be more limited. And the reason why comes down to how boat loans work.
How do boat loans work?
There are two main types of boat loans:
- Specialist marine finance – these use the boat as security for the loan
- Unsecured personal loans – which don’t use the boat as security for the loan
Secured boat finance is seen as less risky than an unsecured personal loan, because the lender has an asset they can sell should you subsequently default on the loan. As a result, a secured boat loan usually comes with lower rates and better terms.
Fantastic. But there’s a catch. The older the boat is, the more difficult it can be to resell. As this makes it more challenging for the lender to recoup its money, it’s more likely your application will be rejected if the lender thinks the boat is too old.
As lenders’ policies vary, it can be a good idea to work with an experienced finance broker like National Loans if you want used boat finance. We can find you a great competitive rate while saving you from damaging hits to your credit score.
Things to consider before buying a used boat
Finance isn’t your only consideration when buying second-hand. And, as you don’t want your dream boat to turn into a financial nightmare, it’s important to do everything you can to avoid buying an expensive lemon.
This can include:
- Having a pre-purchase survey done to get a professional’s opinion on the boat’s condition
- Requesting the boat’s history, including maintenance records and the number of previous owners
- Checking the Personal Property Securities Register (PPSR) to see if the boat has any money owing on it (financially encumbered)
- Asking the seller how many hours the boat has done (an average boat should do about 50 hours per year)
- Knowing what on-board gear is included in the purchase – and what isn’t
You should also consider the hidden costs of boat ownership, so you don’t get any nasty surprises. These expenses can soon add up and include:
- Insurance, registration and licence costs
- Fuel and lubricants
- Storage and mooring
- Boat trailers and winches
- Safety equipment, accessories and spares