Sea Loans™ Tip of the Month: Financial Planning & Boat Ownership
~Capt. Gerald Pitts
Whether you’re financing a new or pre-owned boat, it’s important to consider how long you plan to own the vessel. Work with your finance program provider to plot the anticipated depreciation of the boat and fine tune the term of the loan so that you are “even” or “in equity” at the point at which you think you’ll sell or trade for a new boat. Click ere to learn more.
A little pre-planning will prevent you from having to show up at the sale with a large check because you were farther out of equity than you expected. That’s just no fun!
Here’s an example:
Purchase Price
Annual depreciation
Term of ownership
Accumulated depreciation
Market value in 60 months |
$50,000
$3,500
Five years
$17,500
$32,500 |
If you chose a 15-year term and financed the entire purchase, the payoff in 60 months would be about $39,000 – leaving you short by $ 6,500.
If you chose a 12-year term the payoff in 60 months would be about $34,400 – still $1,900 short.
But, if you chose a 10-year term the payoff would be $29,600, leaving you with about $2,900 in your pocket. The shorter term accelerates amortization and results in a modest increase in the monthly payment.
If you have questions, or would like to receive a FREE quote from Sea Loans, call Capt. Gerald Pitts at
(410) SEA-LOAN (732-5626) or e-mail info@sea-loans.com today!
Jerry Pitts is the general manager of the Sea Loans program and senior business manager for Russo Marine Financial Services, the Sea Loans administrator. He holds a U.S. Coast Guard Masters License, 100-ton, 100-miles near coastal. |
