Financing a boat.

[So]

I still haven't talked myself out of a day cruiser and have been looking at ten year old, and older, Windy boats.

It has just occurred to me (I am quick on the uptake, me) that I wouldn't buy a ten year old car. I would buy a new one and sell it before it needed money spending on it.

I haven't looked into new boats, but is it sensible to buy new on the drip and sell on after three years?

PH disclaimer: I COULD buy a new boat with cash, but I would prefer to keep the cash for the next big business deal (which hasn't materialised in ten years, but it will as soon as I don't have cash.)

[Simpo Two]

It depends how much money you want to lose. If you buy a new boat on finance you'll lose shedloads on depreciation and in paying the employees of a finance company.

If you buy a 2009 boat it will have done most of its depreciation; look after it and it will retain most of its value.

The only benefit in buying new is that you can specify the interior and extras. I only bought a new boat because I wangled about a third off list. Hence seven years on it's still worth what I paid for it. So maybe get your butt round to Windy along with a suitcase of cash and keep them busy in the quiet season...

[So]

Simpo Two said:

It depends how much money you want to lose. If you buy a new boat on finance you'll lose shedloads on depreciation and in paying the employees of a finance company.

If you buy a 2009 boat it will have done most of its depreciation; look after it and it will retain most of its value.

The only benefit in buying new is that you can specify the interior and extras. I only bought a new boat because I wangled about a third off list. Hence seven years on it's still worth what I paid for it. So maybe get your butt round to Windy along with a suitcase of cash and keep them busy in the quiet season...

I don't understand the economics of boats. When we have bought cars lately we've managed to get big discounts plus finance very cheaply, presumably because the manufacturer needed to shift units. I don't know if boat manufacturers have similar imperatives.

[NickCQ]

So said:

I don't understand the economics of boats. When we have bought cars lately we've managed to get big discounts plus finance very cheaply, presumably because the manufacturer needed to shift units. I don't know if boat manufacturers have similar imperatives.

New car finance works because there's enough volume to package it up into securitisations and sell it cheaply into the capital markets. This means that the average dealer can make enough fees on the finance package to allow them to reduce the margin on the car to very little. There is no such parallel with boat finance.

Other issues, as previous posters have alluded to, are that the depreciation curve on boats is much steeper and they are much worse collateral to lend against - higher costs and longer time to sell (less liquidity ), no tracking of the asset through ANPR cameras, easy to hide / move offshore, more expensive to insure etc etc.

[So]

NickCQ said:

So said:

I don't understand the economics of boats. When we have bought cars lately we've managed to get big discounts plus finance very cheaply, presumably because the manufacturer needed to shift units. I don't know if boat manufacturers have similar imperatives.

New car finance works because there's enough volume to package it up into securitisations and sell it cheaply into the capital markets. This means that the average dealer can make enough fees on the finance package to allow them to reduce the margin on the car to very little. There is no such parallel with boat finance.

Other issues, as previous posters have alluded to, are that the depreciation curve on boats is much steeper and they are much worse collateral to lend against - higher costs and longer time to sell (less liquidity ), no tracking of the asset through ANPR cameras, easy to hide / move offshore, more expensive to insure etc etc.

All interesting stuff thanks.

To be honest unless the finance were quite cheap I would probably buy cash.

[NickCQ]

So said:

To be honest unless the finance were quite cheap I would probably buy cash.

Agreed - the other advantage with a lot of car financing, which you won't get with boat finance, is that you can lay off the depreciation risk to the dealer with the ability to hand back the car at an agreed minimum value.

[Audis5b9]

You shouldn't have too many reservations about buying a 10 year old Windy.

I owned a 2007 35 Khamsin for 2 years from when it was 8 years old.

In the two years, the only additional costs we had were a new belt for the sliding backrest and a fridge controller. Windy's are built incredibly well, the important bits of the boat will go on and on. It's just the bits bolted on that will need replacing as and when they fail.

I would be looking for boats which have had the teak (if it has any) replaced by this stage, and also the navigation equipment as it will be getting on now. Most boats will have Volvo engines, good service history is key.

If you PM me, I am happy to help with the search. (Full disclosure, I am a yacht broker...)

[So]

Audis5b9 said:

You shouldn't have too many reservations about buying a 10 year old Windy.

I owned a 2007 35 Khamsin for 2 years from when it was 8 years old.

In the two years, the only additional costs we had were a new belt for the sliding backrest and a fridge controller. Windy's are built incredibly well, the important bits of the boat will go on and on. It's just the bits bolted on that will need replacing as and when they fail.

I would be looking for boats which have had the teak (if it has any) replaced by this stage, and also the navigation equipment as it will be getting on now. Most boats will have Volvo engines, good service history is key.

If you PM me, I am happy to help with the search. (Full disclosure, I am a yacht broker...)

I may well yet PM you thank you. However I need to get my ducks in a row first.

Out of interest though - Windy 25 or 28? Which is better as a first boat do you think?

[Simpo Two]

NickCQ said:

...easy to hide / move offshore, more expensive to insure etc etc.

I'd say 'depends'. Stealing a 2+ ton inland cabin cruiser that has a top speed of 6mph is not a great prospect nor easy to hide. Possibly because of this, insurance for the same boat worth £45K is about £200pa - very cheap compared to cars.

[Simpo Two]

So said:

When we have bought cars lately we've managed to get big discounts plus finance very cheaply, presumably because the manufacturer needed to shift units. I don't know if boat manufacturers have similar imperatives.

Unlike car makers, boat builders are relatively tiny businesses, often just a handful of staff. They tend to go bankrupt at regular intervals and the moulds bought by a rival. It's more akin to the British sports car scene in the 1920/30s. So yes, if you wade in hard enough and they have staff to pay, 'all bets are on' as they say.

[Audis5b9]

So said:

Out of interest though - Windy 25 or 28? Which is better as a first boat do you think?

Theres quite a bit to think about with this, probably most important is where you will be using the boat and the local weather.

For example if you are looking mostly using it around the Solent and occasional coastal cruising down to the West Country, the 25 will do the job as the Solent is well sheltered, and if you are using it as a day boat you will benefit from having decent weather forecasts in advance. However, if you will be using the boat on the West Coast of Scotland, you would benefit from the bigger heavier boat as it will handle the chop much better.

Then you can get into the debate of 1 vs 2 engines...and how many people you are likely to be taking out.

[So]

Audis5b9 said:

So said:

Out of interest though - Windy 25 or 28? Which is better as a first boat do you think?

Theres quite a bit to think about with this, probably most important is where you will be using the boat and the local weather.

For example if you are looking mostly using it around the Solent and occasional coastal cruising down to the West Country, the 25 will do the job as the Solent is well sheltered, and if you are using it as a day boat you will benefit from having decent weather forecasts in advance. However, if you will be using the boat on the West Coast of Scotland, you would benefit from the bigger heavier boat as it will handle the chop much better.

Then you can get into the debate of 1 vs 2 engines...and how many people you are likely to be taking out.

It's likely to be West coast of Italy and 4 people.

[Audis5b9]

So said:

It's likely to be West coast of Italy and 4 people.

Ok, so either boat will handle the conditions there easily. You either have a lot of wind or none...

Comparing the boats side by side, the 28 will obviously give you more room, and a separate heads compartment down below - which is nice to have if you are spending a longer day out on the water. The cockpit of the 28 also has a sundpad at the back.

If the budget for running costs is tight then the smaller single engine boat may be your better option, as the second engine will add circa £500-800 a year in servicing costs (dependent on the local rates), plus additional fuel.

I personally would also go for a two engine boat over one, mainly due to ease of handling at low speeds/ around marinas. There is also a consideration that having two engines is safer if one were to break down.

[So]

Audis5b9 said:

So said:

It's likely to be West coast of Italy and 4 people.

Ok, so either boat will handle the conditions there easily. You either have a lot of wind or none...

Comparing the boats side by side, the 28 will obviously give you more room, and a separate heads compartment down below - which is nice to have if you are spending a longer day out on the water. The cockpit of the 28 also has a sundpad at the back.

If the budget for running costs is tight then the smaller single engine boat may be your better option, as the second engine will add circa £500-800 a year in servicing costs (dependent on the local rates), plus additional fuel.

I personally would also go for a two engine boat over one, mainly due to ease of handling at low speeds/ around marinas. There is also a consideration that having two engines is safer if one were to break down.

You make some good points thank you.

Where are you based?

[Audis5b9]

So said:

You make some good points thank you.

Where are you based?

We are based in the Hamble, but operate Internationally. Most of the boat sales we do are abroad, and where we never personally see the boat or meet each side of the deal.

We also happily work on co-brokerage deals, where we act as the buyers broker, usually at no cost to the buyer.

[julians]

I've got a 2007 windy 25 (kept in majorca) ,so if you want any specific info about them, just shout.

In general they're a solid boat, things that will need sorting on a boat of that sort of age:-


- Teak decks will be failing by now - especially the teak on the swim platform
- Cockpit upholstery is starting to fail at the seams.
- The engine (assuming volvo penta d series diesel) is basically solid, but bit and pieces will need replacing , repairing etc etc.

[Simond S]

We bought a ten year old boat 4 years ago. Still got her. 50/50 cash and finance over 5 years.

Brokers will have access to marine finance that can be over 15years if required, depending on boat age. We opted for a shorter period / higher payment but..

...we are looking to get a new boat, and will lose less than 10% of the cost when we sell. Broker fee's will be somewhere between £5k and £10k (our value and theirs!)

Id love a new boat, but with a 40ft boat now costing £1/2m plus a five year old at under £200k is a much safer option. Ours at 14yrs old is still £110k.