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Old 10-09-2019, 03:44 PM   #92
bligh's Avatar
City: Santa Cruz, CA
Country: USA
Vessel Name: Frisky
Vessel Model: 99 Nordic Tug
Join Date: May 2013
Posts: 1,146
Originally Posted by Chrisjs View Post
This seems like an idle curiosity question rather than one seeking advice. Given that there are no interest-free loans for boats as often available for automobiles, the answer should be "depends on an individual's personal financial circumstances". Only logical reason to get a boat loan is if you can not afford to buy outright. Even assuming the tax deduction for high tax rate individuals, the net cost will exceed current pitifully low savings interest rates - not to mention better investment options. Using a home loan may benefit from a better loan rate than a straight boat loan but is capped by the IRS at $100K.
Plus, boats depreciate just like cars, but are not usually tradeable like cars, and the broker takes 10%, so it can easy to get "upside down" on the loan come time to sell.
I have not read this entire thread, but there are some cracks in your 'logical reasoning'.
For one many people have the cash but still get a loan. Maybe if one had "X" times the cash of the cost of a certain boat, the logical conclusion would be to buy the boat. So each boat buyer likely has a different definition of what "can afford" means to them in relation to their cash on hand.
Another assumption you make is that all boats depreciate. Sure most of the do. But a lot of boaters buy boats that are already depreciated and dont really depreciate much as long as basic maintenance is performed regularly.
Another thing to keep in mind is some buyers choose to take a loan so they can invest cash in stocks or real estate or whatever woul give them a higher rate of return on investment than the interest rate (cost) of a loan.
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