Ready to venture the vast ocean in a new boat? Have you spoken to your mariner surveyor yet? Don’t know what that is? Then read this handy guide before you set sail on your first boating adventure.

Understanding Rates- Necessary Vs Luxury

The first step to getting your boat, finding a great rate. As you surf the web looking for the best rate, you might be asking yourself, “I have great credit, why is there a difference between car and boat rates?” 

For starters, your car, whether you use it for your daily commute, your gym grind, or picking up your weekly supply of groceries, is most likely a necessity. Depending on where you live and without a form of public transportation, it could be your only lifeline to the outside world.

A boat, if you’re reading this article, most likely isn’t your means of survival.  While some  basics of financing your first car may apply when financing a boat, check with your consumer lender before approaching loan options.

Credit Score Needs For Boats


When you’re getting your boat loan, you may be surprised to see two key factors that determine your boat loan.

 1. Interest rate for your boat may be higher than your car’s interest rate.
2. You may need a higher credit score to apply for a boat loan or get a rate that is agreeable to you.

Why? A credit score indicates the likelihood that you will pay your loan on time. Because a boat is often seen as a luxury expense, the rates for boats are often higher than that for the essentials.

In the case of economic hardship, an individual is more likely to pay their loans that are important to their survival (cars and homes) rather than something that could be considered a hobby like a boat. But, with a solid credit score (699 or greater) the odds of procuring a great rate from your financial institution is high.

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Boats Can Usually Have Longer Loan Terms


They say a car loses half its value when it rolls off the lot, but what about a boat? Unlike an automobile, a boat’s value won’t depreciate as quickly once it hits the ocean. For most car loans, it’s not uncommon to  owe more than your car’s worth towards the tail end of your car’s loan. This is called being underwater on your loan (no pun intended.)

For boats, it’s a different story. You will often be able to receive a loan for a significantly longer term that than a car loan (84 Months Vs. 144 Months). Now you may be thinking “If I’m underwater with my car after 84 months, then I’ll be SUNK at 144 months with my boat!” But the longer loan term shouldn’t frighten you. The major difference is the lifetime of each vehicle and how they are determined. For starters, it’s likely you will be driving your car every day. Compared to a boat, which is likely for recreation and only seasonally.

In determining a car’s value, you can often look at year, make, model, and mileage. Boats are more complicated and really depends on motor hours and maintenance. Overall, the longer life cycle of boats means that they have a slower depreciation rate compared to cars. Even today, if you go down to a marina, you will still see plenty of boats from the early to mid- 2000’s. Can you say the same for a 2005 Ford Focus on I95 ?

Determining the Value of a Used Boat


Don’t let the boat you’ve had your eye on become your white whale. Make sure it’s worth the trouble by getting a marine survey to spot any potential issues with the vehicle. If you’re looking for a surveyor, reach out to your lender or insurance provider for a list of qualified specialists. However, as recommended by Discover Boating, make sure they are a member of either the National Association of Marine Surveyors (NAMS) or the Society of Accredited Marine Surveyors (SAMS).

Extra Boat Costs

You found your boat, you found lender, and locked down a rate you’re comfortable with. Now what? Budgeting for your future expense. You can’t just park your boat and set sail. You’ll need to consider your future financial obligation to your watercraft including: gas (boats are expensive to fill up and use a lot of gas), maintenance equipment, gear, a marina to park your boat, etc. But all those additional costs will be easily worth it for a lifetime of adventure ahead. If you’re ready to become preapproved for a Boat loan, you can apply easily online today with First Commonwealth.

Apply Today!