Financial Considerations for a Boat Purchase
The unique and rewarding experience of luxury boating is within reach through the YACHT Solutions programs and services. Our fractional yacht ownership program allows you to enjoy the freedom and comfort of a multi-million-dollar luxury yacht, without the hassles and expenses that come with owning it. New boat owners quickly find out that the financial obligations for maintenance and day to day upkeep is considerable. Add to this the rising costs of boats, dockage, maintenance, insurance, financing and storage.
Consider your financing options
Cash – While some boat purchases are made with savings, this is not the most common option. If you have the money set aside, with higher interests rates affecting the cost of borrowing, people consider a cash option simply because they don’t want another payment. Most boat purchases are financed through one of the other methods.
Line of Credit– If you elect to put your boat purchase on your personal credit line, you’re really self-financing the purchase. The advantage of this option is the quick access to funds without having to apply for financing and waiting to be approved. The minimum payment may be just the interest or a percentage of the outstanding balance.
Bank Loan – If you approach one of the banks or credit unions, their typical approach to a boat loan is to provide you with a secured credit line with the security being your home. Homes are what the banks are comfortable with, they know how to do well, and once again you’re borrowing against your largest asset and limiting your future funding options. Your local branch will typically not finance older boats and will not typically go up to a maximum of 25 years amortization.
Marine Financing through a Dealer – This may be the preferred option for several reasons. As your marine dealer, we have arrangements through specialized brokers that have access to a number of lending institutions using a dealer finance plan not accessible to the public. These centres have what’s called computer approved loans so neither the bank nor one of its employees ever actually speaks to the customer. This is one way that they keep their rates lower and have a faster turn around time. Its convenient for the buyer and mortgages are up to 25 years on new boats. The main advantage is that the only collateral used is the boat itself. The typical down payment requested is 25%.
Fractional Ownership – Because the fractional interest is usually equal to the down payment of 25%, your outlay is the same however, there are no monthly payments to pay down the principle or interest. Loans may be taken out for the fractional interest, however the boat cannot be used as collateral.
Leasing your boat – This may be a preferred option in a sole ownership for the same reasons that you would lease vs take a loan on a vehicle. It really becomes an accounting decision and one that allows the purchaser to offset the HST.
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YACHT Solutions provides a complete service for boat buyers that includes finding the best financing option for your new boat. Our mission is to have our customers save time, save money while enhancing their lives. Overall yacht management incorporates some important benefits, particularly for new boat owners. By co-owning and sharing the cost of the yacht, the luxury lifestyle you’ve dreamed of is within your grasp at a fraction of the price. From formally entertaining guests, to cruising the coastline with friends, the memories made on board your private yacht are irreplaceable.
Your turnkey yacht ownership experience is entirely managed by our expert concierge team. We handle all facets of the management end of your yacht ownership including insurance, dockage, maintenance, cleaning, managing crew, and eliminate any other potential headaches that would disrupt your time on the water. You are free to sell your share of the yacht at any time.
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For those seeking the luxury yachting lifestyle without the extra costs and headaches, we offer the perfect solution. Our Fractional Ownership Program creates an easy yacht ownership experience that reduces maintenance costs, docking fees, insurance fees and more.
- You can enjoy a turnkey yacht ownership experience
- You are free to sell your ownership interest at any time
- Your yacht is fully equipped to ensure that it becomes your home on the water
- Your excursions are personalized down to the smallest detail to ensure a memorable experience
- Maximum use is made of your yacht: full-time yachts are better maintained, have a higher life expectancy, and hold a higher value
- Your yacht is professionally managed by YACHT Solutions
- You are provided with an annual budget outlining the expenses over the coming year
- You are provided with standard, transparent quarterly financial statements
- A captain and crew ensures excellent service and an inviting atmosphere on board
- Your yacht is ready to set sail as soon as you arrive
- YACHT Solutions concierge service allows you to explore and experience some of the best yachting destinations in the Great Lakes
- Migration to Florida and Bahamas in winter is an option available on the larger boats
Schaefer 510 GT
|Yacht Financials||Sole Ownership (100%)||Shared Ownership (50%)||Shared Ownership (25%)|
|Initial Investment (New)||$2,000,000||$1,000,000||$500,000|
|General Operating Expenses||$100,000||$50,000||$25,000|
|Annual Usage||Unlimited||12 weeks||6 weeks|
Subject to itinerary plans, budget, maintenance downtime, crew and repositioning.
Rates do not include variable costs such as fuel, transient dockage, commissioning, food consumed.