Now the warmer weather is here, so are the hopes and dreams of Michiganders wanting to buy a boat. But is buying a boat the right thing for you?
By now you’ve probably heard the saying that a boat is a hole in the water into which you throw money. Whether that’s true or not, it’s never stopped anyone from buying a boat! Before you decide to start throwing money at that hole in the water, here are some things to consider.
Can You Afford a Boat?
In many ways, buying a boat is similar to a car, but you need to look at it in a different light. While a car is a necessity to get you to work or chauffer your kids to school and various activities, a boat is a pure luxury. Do the math to see if the bottom line of a boat or the monthly payments make sense with your budget. If it does, then it’s time to figure out how much you should actually spend. Our loan calculatorcan help with this.
The good news is boat loans typically have better rates and longer terms than auto loans, sometimes up to 15 years. Keep in mind, like other loans, your credit rating will be a factor. Speak to a WWFCU Member Service Specialistto find what loan terms work best for you.
What Kind of Boat Do You Want?
It’s one thing to know you want a new or used boat, but what kind? To answer this question, you’ll need to ask yourself a few others. How do you plan on using the boat? Do you want to tow tubers or water skiers? Do you want enough space to entertain or sleep over? Or are you purely interested in fishing? Depending on how you answer these questions, you’ll have a much better idea what type of boat to buy: fishing boat, bowrider, pontoon, cabin cruiser or ski/wake boat.
What Are the Startup Costs?
Buying a boat means more than just paying for the sticker price of the boat. How are you going to transport it or store it? If you purchase a boat and trailer from the same store/person, you may be able to negotiate its cost. Do you need a dock and a hoist, a slip in a marina or a mooring?
There are other items you’ll need to have as a boat owner such as ropes, life jackets, paddles, signal flares, etc. Those are the basics you’ll need. Anything on top of that, decide that you’ll “treat” your boat to something new each summer such as tubes, water skis and more.
What Else is Required?
When you buy a boat, you’ll need to insure it. At the very least you’ll need liability insurance and probably damage coverage – especially if you’re buying a newer boat. If you’re getting a loan, you may also need comprehensive coverage for your boat.
Depending on your age, as a Michigan resident you may need to go through boater education and get a Boater Education Card. Learn more about boater education here.
Where Will You Store Your Boat Off-Season?
As a boat owner in Michigan, you’ll need to figure out where you’ll store the boat in the winter months. You’ll not only need to find somewhere to store it, but either winterize the engine and boat yourself or hire an expert to do it.
How Much Will a Boat Cost?
Obviously, the price of a boat depends on many things. What type of boat? Is it new or used? We thought we’d give you a range of costs to give you a general idea of what you’ll be paying for a boat. For a new boat, plan on spending $20,000 on up. You can check prices using the NADA Guidefor used boats. A boat trailer will cost about $2,000 to $5,000. If you need to get a mooring, expect to pay $3,000 or more. A boat lift/hoist will run you anywhere from $6,000 to $10,000. Insurance can range from a few hundred a month to over $1,000. Finally, expect to pay at least $2,000 a year for boat maintenance and cleaning.
Time to Decide?
So, if none of the above has scared you off from buying a boat, then you’ll want to think about your timing. Before you head to the boat dealer, get prequalified from a lender (like us!). If you’re purchasing a used boat, you may want to hire an inspector to check it out. And remember whether you’re shopping for a new or used boat, you’ll also want to take it out for a test run if possible.
Time to have a fun summer!