Do many owners borrow to buy a boat?

WF36 said:
When I bought mine I was told I was more likely to get the list for limited edition ones if I financed (which I didn't).
Click to expand...

Dealerships make a lot of money from finance, so it can be a starting point for deciding which customers get special favours!
 
steveej said:
Interesting thread.

As someone who is in my mid thirties having significantly upsized the house back in October, I am currently capital poor.

The week before Christmas and the Boss pulls me into the office to tell me about a completely unexpected and substantial payrise.

So I am now Capital Poor but Cashflow Rich.

So running the numbers on say a £30k boat, with £5k deposit and £25k personal loan over 4 years, repayments are around £550 per month, total repayments £26,400.

It has cost me £1,400 to have the boat now, rather than wait 4 years time and the loan will be repaid before my 5 year fixed mortgage deal is due for renewal. Must admit it is making a lot of sense to me.

I could do broadly the same with a brand new BMW which are ten a penny these days on a PCP finance deal and at the end of the 4 years have nothing to show for it.
Click to expand...
I can see the sense in that but I’m amazed you can get a personal loan at around 1.5% pa.
 
Frogmogman said:
ha ha. I wish. If it were down to me I'd spend it on a Pogo 36.

Sadly the missus has insisted that we waste it on building an extension and fitting a new kitchen.
Click to expand...

Which raises an interesting point about whether you would have been offered a 0.9% interest rate if, rather than investing in bricks and mortar, you'd told the loan provider that you were investing in a boat?

I've no idea as I've never taken out a loan other than for bricks and mortar.

Richard
 
steveej said:
Interesting thread.

As someone who is in my mid thirties having significantly upsized the house back in October, I am currently capital poor.

The week before Christmas and the Boss pulls me into the office to tell me about a completely unexpected and substantial payrise.

So I am now Capital Poor but Cashflow Rich.

So running the numbers on say a £30k boat, with £5k deposit and £25k personal loan over 4 years, repayments are around £550 per month, total repayments £26,400.

It has cost me £1,400 to have the boat now, rather than wait 4 years time and the loan will be repaid before my 5 year fixed mortgage deal is due for renewal. Must admit it is making a lot of sense to me.

I could do broadly the same with a brand new BMW which are ten a penny these days on a PCP finance deal and at the end of the 4 years have nothing to show for it.
Click to expand...

It’s a personal choice isn’t it. The BMW won’t be worth much in 5 years. Who knows what the boat will be worth in 5 years. Quite possibly round about the same as it is now or a bit less.
The questions are
can you really afford the 550 plus the cost of somewhere to keep the boat.
Will you be happy without a fancy new car for 4 years.
Do you really want a boat.

If the answer is yes yes and yes. Why not?

Good financial advice would be don’t by a boat. Pay down your mortgage or invest in something.

The only thing I regret about buying a boat. Not doing it sooner. I did other stuff. I bought a smaller boat when I could,
Life goes on and you can’t get it back. Best to enjoy it while you can and if you have family. While they are still young.
Is it worthwhile to borrow money to enjoy life.
Hell yeah. So long as you can afford it.

What ever you do. Don’t take financial advice from me.
I’m an idiot.
I went on a Distillary tour last year. Other people bought a bottle of whiskey.
I bought a cask.:)
 
JumbleDuck said:
Of course, but you are conflating two different issues. Even for people who want a new car, personal hire plans are a lousy deal because they cost more than just buying and selling. Evidence: car manufacturers make FAR more from these plans that they do from selling cars.


.

That's definitely a matter of opinion, and confounded by ...





Because in one case the manufacturer is making a whacking great additional profit. What an odd question.



Conflation again. Even if I wanted to throw money away on a new car, personal hire would be a rotten deal because it's a very expensive way of doing it.
Click to expand...

Bit of Fred now, I am curious as to when the market will be full of 3 year old vehicles and then this affects residuals so much that the market collapses causing another run on banks
 
skipper_stu said:
Bit of Fred now, I am curious as to when the market will be full of 3 year old vehicles and then this affects residuals so much that the market collapses causing another run on banks
Click to expand...

PCP deals have been running for so long now that this potential problem would have raised its ugly head years ago.
 
I agree that PCP type deals can be unsuitable for some buyers, but if you know what you're doing, some of the finance deals out there can represent stunning value for money.

A mate of mine was after a Mercedes AMG E63 estate, a 90 grand car at the time. Mercedes were then having a big push to increase their market share, and had some heavily subsidized deals on offer.

Instead of just buying a new one, my mate took out a contract hire deal with M-B. The deal was 3 monthly payments up-front and £540 a month for 23 months; so £14040 to run an E63 for two years, which would be an out of the showroom loss if he'd bought it. Mercedes owned the whole thing.

At the end of the 2 years my pal offered to buy it; Mercedes wanted £60K for it, which was £20K above it's market value at the time, so he walked away and it was Mercedes who lost their shirt.
 
Frogmogman said:
I agree that PCP type deals can be unsuitable for some buyers, but if you know what you're doing, some of the finance deals out there can represent stunning value for money.

A mate of mine was after a Mercedes AMG E63 estate, a 90 grand car at the time. Mercedes were then having a big push to increase their market share, and had some heavily subsidized deals on offer.

Instead of just buying a new one, my mate took out a contract hire deal with M-B. The deal was 3 monthly payments up-front and £540 a month for 23 months; so £14040 to run an E63 for two years, which would be an out of the showroom loss if he'd bought it. Mercedes owned the whole thing.

At the end of the 2 years my pal offered to buy it; Mercedes wanted £60K for it, which was £20K above it's market value at the time, so he walked away and it was Mercedes who lost their shirt.
Click to expand...

I agree. If you hunt around for the good value PCP and PCH deals they can be a much cheaper option than buying the car outright.

I think that some of the posters who objected to these deals are really objecting to the significant loss of value in the first few years of ownership of cars rather than the cost of the acquisition by any type of finance deal. Diminishing this by having a very low finance rate, huge discount on the new vehicle, and artificially high residuals is sometimes a good solution.

Then again, if you just aren’t the sort of person to ever buy a new car, then none of the above is relevant.

The same applies to new boats especially when the opportunity cost of not being able to use the money elsewhere, is taken in to account.

Garold
 
Frogmogman said:
Instead of just buying a new one, my mate took out a contract hire deal with M-B. The deal was 3 monthly payments up-front and £540 a month for 23 months; so £14040 to run an E63 for two years, which would be an out of the showroom loss if he'd bought it. Mercedes owned the whole thing.

At the end of the 2 years my pal offered to buy it; Mercedes wanted £60K for it, which was £20K above it's market value at the time, so he walked away and it was Mercedes who lost their shirt.
Click to expand...

So your pal spent over £14k on a nice car and at the end of 2 years he had nothing to show for the money except the memory?

That's the kind of scenario that causes a Yorkshireman like me to wake up in a cold sweat in the middle of the night. :ambivalence:

Richard
 
RichardS said:
Yes, wholly UK-based sterling returns: https://www.assetzcapital.co.uk/

Richard
Click to expand...

This of course is peer to peer lending and not a 'normal savings account'. I've been investing in this arena for a while and been earning 10%-12%. There are several relatively sound operators but I'd counsel a lot of research before jumping in - there is no FSCS protection so your capital is certainly at risk. The business is mature enough now where you can also use your ISA
A good source of information is: https://www.4thway.co.uk/ - Assetz Capital come out well in their comparisons
 
RichardS said:
So your pal spent over £14k on a nice car and at the end of 2 years he had nothing to show for the money except the memory?

That's the kind of scenario that causes a Yorkshireman like me to wake up in a cold sweat in the middle of the night. :ambivalence:

Richard
Click to expand...

In all fairness that is better than first having to find £90K then being told that his asset was only worth £60K after 2 years- (assuming he could sell it) & his garage/marina was not stinging him £4k PA for the pleasure of storing it whilst it went rusty/weedy
 
You must log in or register to reply here.

Share this page

Top