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rodltg2
10-15-2007, 06:46 PM
a guy on wakeworld posted a question regarding financing a boat. someone there posted that you should never finance a depreciating asset such as a boat. never buy what you can't afford to pay cash for.

sound great, but if that were the case and everyone followed his advice do you think that boats would be what they are today?? MC would hardly sell what they do today and i doubt they would make any large wakeboard boats since it probably wouldn't be profitable to spend all that money on manufacturing let say the xstar , if they are only going to move a few units. i think we'd all be skiing on 85 mastercraft technology. lakes would be nice and calm though! what do you think?

Jerseydave
10-15-2007, 06:50 PM
If buyers didn't finance luxury items (boats, campers, motorcycles, etc.) it would just about kill the industry. They do make it easy at the boat shows (180 month terms) and if you're the type of person who doesn't mind making never-ending payments, you could have a new boat every few years (as long as your never upside-down on the loan).

Nothing wrong with a clean '85 stars and stripes though! ;)

87MCProstar
10-15-2007, 06:52 PM
your rationale works for me. if we only bought things that we payed cash for the world would look much different, not sayin it would be better or worse.

alletric
10-15-2007, 07:33 PM
It is not advice for one purchase but more a way of life. If you are not paying the bank for their money you will save more of yours. Once you save more of yours you have more to spend and return to the economy. If you can swing the payments for a boat for 5 years then you should be able to save enough to buy a boat in five years and have the interest left over. The idea is that this money adds up and when you get ready to buy a boat you just write a check and not ask a bank. This takes more patience than I have but so the theory goes. By saying that if we only paid cash for things we bought is saying that we are buying things on credit for money we do not have. 0 interest loans d not apply. I make two steady payments to GMAC but at least the boke is paid for. It's 18 years old it ought to be.

Chief
10-15-2007, 07:38 PM
I agree pay cash for everything. Too bad I can't afford too................. Can't take it with you I guess. Maybe in my next job will I be able to afford to pay cash, because the Navy didn't pay for crap for the first ten years!

Willytown
10-15-2007, 07:43 PM
Debt in the right situation is not necessarily a bad thing. I could pay off more of my boat if I wanted but I choose to use a credit line on some rental property I have and right off all the interest. Then, with the money I still have, I invest it and make more than what I would be paying in interest. The realized interest right after writing it off is more like 4-5% and Im making 10-14% in the market so it makes sense for me to carry a little more debt to own an X2.

Chief
10-15-2007, 07:50 PM
Disposable income: That's what you do with a boat. Dispose of it! :)

alletric
10-15-2007, 08:00 PM
Debt in the right situation is not necessarily a bad thing. I could pay off more of my boat if I wanted but I choose to use a credit line on some rental property I have and right off all the interest. Then, with the money I still have, I invest it and make more than what I would be paying in interest. The realized interest right after writing it off is more like 4-5% and Im making 10-14% in the market so it makes sense for me to carry a little more debt to own an X2. Debt is not a bad thing, especially when used right it can be a tool. The problem is there are so many tools buying crotch rockets for the lake on their Red Card for money they don't have. You obviously TCB but most have have a boat at home that has a payment bigger than the crackerbox they live in.

east tx skier
10-15-2007, 09:06 PM
I'd still be in an I/O if it weren't for the bank's cheap money. 2.9% and I paid it off early. No regrets. Not for everyone, but I had not problem with it. I don't buy new cars, so money saved elsewhere I suppose.

alletric
10-15-2007, 09:19 PM
Everybody that financed a boat don't think that I am saying you did something wrong. I was trying to shed light on why I thought the poster meant to not fianace a boat. I could care less what you did with your money.

rodltg2
10-15-2007, 09:44 PM
very interesting theories going on. i would just be curious how the boat companies would be doing if no one financed boats. i tend to agree with njskier. i think the boating industry would be dead.

JEREMY79
10-15-2007, 09:46 PM
I have a problem with buying stuff that you cant pay for. Do you know what you really end up paying for that boat??

Slinkyredfoot
10-15-2007, 09:51 PM
Everybody that financed a boat don't think that I am saying you did something wrong. I was trying to shed light on why I thought the poster meant to not fianace a boat. I could care less what you did with your money.

I care about what you do with your money, give it me, I will invest it for you and in about 5 years you can be living like Henry the VIII, and own more than 1 MC....

Leroy
10-15-2007, 09:51 PM
I paid cash, but then again I was 40 when I bought my boat.

I think it is pay cash for depreciating toys....or know that you can REALLY REALLY afford it and not even close.

The last thing anyone wants is a family discussion along the lines: if you hadn't bought that boat......

rodltg2
10-15-2007, 09:52 PM
I have a problem with buying stuff that you cant pay for. Do you know what you really end up paying for that boat??


i would think most peole sell their boat way before the term of the loan is over. that is on the 60K plus wakeboard boats.

lanier92prostar
10-15-2007, 10:01 PM
My MC was the first thing I bought out of college when I got my job. My finance rate was really low and I paid a 4 year loan in 2. I built my credit so my score was such I was able to qualify for better interest rates when I bought my first house 2 years later.

bcampbe7
10-15-2007, 10:03 PM
I have a problem with buying stuff that you cant pay for. Do you know what you really end up paying for that boat??


Agreed...

Having said that, I borrowed the money for our boat but paid it off way early. Same for my vehicles.

If I can help it/have the patience, I will never borrow money for a car or boat again.

I think the boating industry would be OK. For one, you would not see as many $60K+ wakeboard boats. As far as ski boats are concerned, are the newer boats that much better? Which year model PS190 had arguably the best ski wake???

T Scott
10-15-2007, 10:04 PM
I personally choose not to finance any of my "toys". (Ie: Mastercraft, waverunners, jet skis, etc) I am the sole income provider for my family and it helps me sleep well at night knowing that if something happened to me, my family isn't stuck with a big stack of bills for all my toys. Again, I am not trying to knock anyone who chooses to finance things, but just providing my perspective.

alletric
10-15-2007, 10:15 PM
very interesting theories going on. i would just be curious how the boat companies would be doing if no one financed boats. i tend to agree with njskier. i think the boating industry would be dead.
The point is you would still buy the boat because you had saved the money to buy it. If everyone started today and started saving the money every month for a boat for five years that industry would take a hard five years. The fifth year you would buy a boat. The next year you go to trade a boat plus buy a new one. Also in the market is the people that have been saving for four years and this is their fifth year. You are probably right that the boat industry would be dead given today's attitude toward aquiring debt. But it would only be for a short term. The current attitude has us so far in debt to China that they will be owning your body of water before you know it. I didn't mean to go on a rant but if you can't see the difference between "not being able to afford" something through saving and waiting versus "affording" through payments I don't know where to go. Affording would be having the money to actually make the payment. The point on the original post is that in the perfect world we would hope that people would be responsible when buying a boat versus financing a house. This is not about everyone nor was it about wise investing tips. It was to save those poor soles at the boat show in the mall.

Ski-me
10-15-2007, 10:21 PM
Two words--- Dave Ramsey

He would always recomend paying cash for everything. I've listened for a few years now and just bought my 04' 3/4 ton suburban with cash. A good feeling knowing I'm not a slave to the lender. I hope to get our first MC in the spring.....cash as well. It won't be anything fancy but I'll ski better knowing it's paid for. Looking for 95' Prostar 205, great condition.

JEREMY79
10-15-2007, 10:24 PM
i would think most peole sell their boat way before the term of the loan is over. that is on the 60K plus wakeboard boats.

I dont own a 60k boat, nor will I ever.

Just bear with me for a minute.

New car for wife 500/month
new truck for you 500/month
New boat 450/month
House Payment 700/month
Misc bills (electric,ect) 300/month

Grand Total 2450/month
divided by 4 weeks 612.50/week in payments (I' sure I missed a few)This is why the average American household owes average of 8000.00 in credit card debt on an average of 11 cards. (daveramsey.com)

:twocents:

east tx skier
10-15-2007, 10:34 PM
As far as ski boats are concerned, are the newer boats that much better? Which year model PS190 had arguably the best ski wake???


On that line of thinking, some of these theories do presuppose that the boat purchased depreciated. Paying cash for something that depreciates isn't exactly something that makes fiscal sense. Bottom line. It's expensive whether you pay cash or finance it. I'm of course not slighting people who buy new boats. :) But remember ... they're instantly worth less (but not worthless).

alletric
10-15-2007, 10:39 PM
Some of these theories do presuppose that the boat purchased depreciated. Paying cash for something that depreciates isn't good either. I'm of course not slighting people who buy new boats. ;)Eastie I'm pretty sure for this discussion we are talking about a newboat with a zillion payments. If you pick up a nice mid 90's M/C with a 300 monthly reminder so be it.

Leroy
10-15-2007, 10:42 PM
Doug; how can this cheap money be real, if it is I'll take millions at 2.9%....


I'd still be in an I/O if it weren't for the bank's cheap money. 2.9% and I paid it off early. No regrets. Not for everyone, but I had not problem with it. I don't buy new cars, so money saved elsewhere I suppose.

east tx skier
10-15-2007, 10:43 PM
Eastie I'm pretty sure for this discussion we are talking about a newboat with a zillion payments. If you pick up a nice mid 90's M/C with a 300 monthly reminder so be it.

I didn't read the wakeworld thread, so I just assumed it was all financed boat. And less than $300 a month.

Doug; how can this cheap money be real, if it is I'll take millions at 2.9%....

Put it into an asset that won't go downhill and will bring you and your family enjoyment and I'd say great.

Leroy
10-15-2007, 10:48 PM
I think you ended up pretty good with your investment!

Put it into an asset that won't go downhill and will bring you and your family enjoyment and I'd say great.

east tx skier
10-15-2007, 10:50 PM
I think you ended up pretty good with your investment!

Well, I'll confess that I never looked at it as an investment, even when selling it. They're toys. No matter how they're acquired, you'd be better off financially putting the money in the market. But what fun would that be.

erkoehler
10-15-2007, 11:06 PM
I wouldn't say MC wouldn't make boats like the X-star, there are quite a few people out there that do not finance their new MC.

I'd say 60-70% of our buyers write a check.

bcampbe7
10-15-2007, 11:08 PM
I wouldn't say MC wouldn't make boats like the X-star, there are quite a few people out there that do not finance their new MC.

I'd say 60-70% of our buyers write a check.

Really??? 60-70%??? Seems high to me. Good for them though! :cool:

6ballsisall
10-15-2007, 11:32 PM
I dont own a 60k boat, nor will I ever.

Just bear with me for a minute.

New car for wife 500/month
new truck for you 500/month
New boat 450/month
House Payment 700/month
Misc bills (electric,ect) 300/month

Grand Total 2450/month
divided by 4 weeks 612.50/week in payments (I' sure I missed a few)This is why the average American household owes average of 8000.00 in credit card debt on an average of 11 cards. (daveramsey.com)

:twocents:


Dang I wish my mortgage was that small. :(

All said and done I agree with you completely Jeremy. We live in a "me society" thats been trained to buy now, pay later. Its really scary to see the reports of peoples savings accounts for retirement, yet these are the same folks living it large today. What happened to delayed gratification??

I can't say I see it all black and white though. Boat loans have worked out fine for me, but my buying and selling history aren't of the typical. Bottom line, if the bank will loan the money @ 2.9% for example and you are getting 10-11% consistenly on your money than it's really a no brainer to take the loan. HOWEVER, I would make an educated guess to say that alot of buyers don't have those investments making money on the back side and are living payment poor.

Here's my question: How can someone take out 48-52% debt to income ratio and actually survive???? After taxes on your income and feeding the family, how in the heck do you pay those monthly payments???? My stomach would be in knots if I got to even half of those percentages!!

Ski-me
10-16-2007, 12:28 PM
Really??? 60-70%??? Seems high to me. Good for them though! :cool:
I went into the "another" Inboard dealership last summer and the salesman confirmed this cash sales theory. He started going down the list of sold boats....Almost all (85%) of the new, $60k-$70k ski boats were paid for in cash....he probably pointed out 10 different transactions like this.

Then he pointed out the cheaper, I/O new boats. Probably 80% of those were financed. These boats ran in the 15k-25k price range.

Interesting point....the higher priced boats were paid in cash, the lower priced boats were financed.

Ric
10-16-2007, 12:30 PM
I'm making payments on my bote.

dmayer84
10-16-2007, 12:33 PM
I'm making payments on my boat but it was paid for in cash.

BrianM
10-16-2007, 12:35 PM
To each their own. I personally abide by a strict "cash for toys" policy.

mccobmd
10-16-2007, 01:32 PM
I also paid cash for my boat, which is why I'm in an X1 and not an X14. But I agree with the demand, people who buy mastercraft are people who want value. I am equally or more concerned with the value received than the total cost. You can finance or not but the real question is do you only want to know what the payment is or what is the pay off. Those people with high credit card debt never consider paying anything off, they only want to have enough to make the next payment.

rodltg2
10-16-2007, 01:39 PM
im actually surprised that such a large percentage of people pay cash for those large ticket boats. i think around here it might be a different story. the majority of wakeboats i see on local lakes are owned by 20-30y/o. they also tow them with brand new tricked out trucks. the ony way i can figure so many young adults have these 100k+ set ups is by easy financing.

Ric
10-16-2007, 01:39 PM
Rodl, kinda starting the wintertime chats a little early this year

rodltg2
10-16-2007, 01:41 PM
Rodl, kinda starting the wintertime chats a little early this year

we ended up without an indian summer. i think we've had more rain since september than i think we did all last year!

Ric
10-16-2007, 01:44 PM
what do yall think my 05 197 with 180 hours would sell for today? perfect pass, bimini, full mc tower & racks, 07TRAILER, teak platform mcx 1:1, 400 watt cdsound system w/ JL sub & wired remote, led interior accent lighting........... This will give me a feel for how foolish financing the bote might have been.

Muttley
10-16-2007, 01:59 PM
I suppose their point is that it's a bad investment, moneywise. So are vacations, but they sure are a lot of fun!

It's about cost of ownership. What's it worth to you to have something nice? Instead of a monetary return, you get reliability and the latest technology and a warrantee. Not to mention a great boat.

east tx skier
10-16-2007, 02:04 PM
what do yall think my 05 197 with 180 hours would sell for today? perfect pass, bimini, full mc tower & racks, 07TRAILER, teak platform mcx 1:1, 400 watt cdsound system w/ JL sub & wired remote, led interior accent lighting........... This will give me a feel for how foolish financing the bote might have been.

I'd have given you book until I read it had the bling lighting and a tower. 8p

Ric
10-16-2007, 02:19 PM
I'd have given you book until I read it had the bling lighting and a tower. 8p woah I almost forgot that it includes a mighty fine mc cover complete with vents and cinch equipment. and an mc depth finder / air temp gage







I gotta get forty k for it though or else I'll lose my shirt haaaaaaaaaaaaaa;)

east tx skier
10-16-2007, 02:23 PM
woah I almost forgot that it includes a mighty fine mc cover complete with vents and cinch equipment. and an mc depth finder / air temp gage

Is that Hummingbird? You got a part number by chance?

Ric
10-16-2007, 02:24 PM
Is that Hummingbird? You got a part number by chance? hell no and hell yes, in that order8p

east tx skier
10-16-2007, 02:30 PM
You got a picture of the dash you can share?

Ric
10-16-2007, 02:36 PM
You got a picture of the dash you can share? I will tommorrah

Ric
10-16-2007, 02:37 PM
for the record, this is an integrated system and reads in an electronic display found in my tach face

Roonie's
10-16-2007, 02:46 PM
I am also under the notion of paying cash for toys (and any other thing you own if possible).

east tx skier
10-16-2007, 04:50 PM
for the record, this is an integrated system and reads in an electronic display found in my tach face

Ah, gotcha. I think they used to just slap the hummingbird gauges in there (at least for the depth gauge). So fancy these days. :)

rodltg2
10-16-2007, 04:53 PM
im saving all my pennies for this so i will need to finance the boat.

Jim@BAWS
10-16-2007, 05:06 PM
Lets just say...if it was not for financing many folks would not own boats. This is not fantasy land, this is reality and people finance everything. Some folks agree with that statement others do not.
It is a matter of personal decision

Jim@BAWS





a guy on wakeworld posted a question regarding financing a boat. someone there posted that you should never finance a depreciating asset such as a boat. never buy what you can't afford to pay cash for.

sound great, but if that were the case and everyone followed his advice do you think that boats would be what they are today?? MC would hardly sell what they do today and i doubt they would make any large wakeboard boats since it probably wouldn't be profitable to spend all that money on manufacturing let say the xstar , if they are only going to move a few units. i think we'd all be skiing on 85 mastercraft technology. lakes would be nice and calm though! what do you think?

h2oskiluvr
10-16-2007, 05:20 PM
There are only so many years our bodies are capable of skiing or wakeboarding at a pretty high level. Given the finite amount of time we have I think paying a premium to have the boat sooner rather than later is worth it. I wouldn't recommend this across the board though it has to be kept reasonable.

On a related note, it is very nice that MasterCraft do not depreciate as fast as other boats. I have tried to convince my wife the boat is a good investment but she isn't buying it.

JohnE
10-16-2007, 05:56 PM
I agree with h2oskiluvr. I had a boat that was paid for, but looked at how quickly life goes by so decided to buy the newer boat. And I had to finance it. No regrets. FWIW, it's the first and only toy ever financed. I agree it's not the most sound financial decision, but I couldn't be happier with it.

Ric
10-16-2007, 05:58 PM
I think I will sell my boat for cash

SunCoast 83
10-16-2007, 06:02 PM
Get the boat before the wife,....then it's considered a family member:) I haven't had as much luck conviencing her of the "second boat"...:)

clevan
10-16-2007, 07:18 PM
It isn't how much you have, it is how much you enjoy what you have. I used to be a contender in the one who dies with the most toys wins. Then one day I discovered that I spent all my time working to pay for toys I never got to use. Now I only buy what I can pay cash for. It was tough at first but I knew I had made the right decision when a friend of mine called to inform me had bought a brand new Xstar. His brand new Xstar was sitting in storage while he was at the office working overtime to pay for it. I was at the lake with my 88 prostar. Cash is king.

JEREMY79
10-16-2007, 08:19 PM
im actually surprised that such a large percentage of people pay cash for those large ticket boats. i think around here it might be a different story. the majority of wakeboats i see on local lakes are owned by 20-30y/o. they also tow them with brand new tricked out trucks. the ony way i can figure so many young adults have these 100k+ set ups is by easy financing.

You said it exactly. "I have to have this or I might as well not have anything" That is part of the problem with todays society. That is why most people live off credit cards. And if you shove $100 bill in those peoples mouth, you would get a credit card recipt out of the other end!!!!

puck_11
10-19-2007, 12:10 PM
I'm all for financing, but then again I'm only 24. If you have to wait four to five years to buy something just to save money on interest, think about all of the lost memories and good times you could have had. I financed a motorcycle in college, and in the three years that I had it were awesome. Had I waited three years to buy it, theres no way that I would have enjoyed it the way that I did. It was well worth the interest that I paid, and on top of it I built up my credit rating. I ended up selling the bike because I bought my boat and devoted all of my time to that. Of course I got my loan on my boat for 2%, and I don't have any other loans out, as long as you aren't stupid and over extending yourself I think financing is a great thing.

I dated a girl whose parents paid everything cash, which is great if you can get there, but the girl was trying to live that same way and never had any sort of credit built up (she was 26). Try to get a decent loan with little to no credit history will hurt you big time when it comes to getting a mortgage loan.