Share boat loans in the form of Unsecured Personal Loans may be used to buy a share in a vessel with friends or shares in a commercial boat share arrangement. While buying your own boat may be the dream, it may not be the reality for you at the moment. With current high inflation causing cost pressures on many household budgets, it may be difficult to justify the added expense of boat loan payments on a new boat. Understandable.
Consider the option of sharing a vessel. This is a very popular way for many to enjoy boating lifestyle without all the expenses and responsibilities attached to full ownership. With costs shared and financing available, it may be a very affordable option for you. We cover off on the options available for you to achieve your boating aspirations.
What are Share Boat Loans?
Share Boat Loans are loans to individuals to finance their share in a boat. When financing part-ownership of a vessel, the shareholder would not be in a position to offer the vessel as collateral for their loan. With the goods being financed not available to provide security for the loan, a Secured Boat Loan is not suited to this type of purchase. An unsecured loan would be required. Unsecured Personal Loans are an extremely versatile credit product as they can be used for many purposes where collateral is not available. Interest rates are higher than for secured loans, but with our access to a large lender base, we do source very competitive rates.
Rates may be fixed or variable depending on the particular credit product and lender. Terms are fixed from 1-7 years. Minimum and maximum loan limits are typically applied by individual lenders.
As the boat is not used as collateral, insurance is not required by lenders. But many will want to take out a policy on a boat shared with friends. In the event that the boat is stolen or damaged, shareholders may claim on the policy to pay out their finance commitments.
Arrangements Financed with Share Boat Loans
The two main types of boat sharing arrangements are a formal contract with a commercial company and a less formal arrangement sharing with friends or a family member.
Commercial boat sharing is available through companies. These are predominantly time-share arrangements where individuals buy a share which entitles them to a set number of days usage of the vessel in a 12-month period.
Time-share contracts may have an annual fee or be a longer-term contractual arrangement. Companies offering this type of service may operate a fleet of vessels - yachts or cruisers. Shareholders may be given the option of sharing one particular boat or having a boat from the fleet allocated to their time slots.
Sharing boat ownership with friends typically involves two or more friends getting together to buy a boat, each paying an equal share of the purchase price. The usage arrangement may be informal and up to the shareholders to decide what works for them. Often this is both or all the shareholders heading off at the same time to go fishing or enjoy family time together.
Compare Buying with Share Boat Loans
Before making a final decision on sharing, compare your options for buying a boat outright with a Secured Boat Loan. Interest rates on secured loans are significantly lower than on unsecured loans.
You may find that repayments on a lesser loan amount – possibly the price of a smaller or lower priced boat, may be workable compared with sharing possibly a more expensive boat. Use our Boat Finance Calculator to work up estimates for secured and unsecured loans, based on varying loan amounts to assist with your decision. Alternatively, request a quote.
Share Boat Considerations
Before proceeding with buying into sharing a boat, there are some issues that buyers may like to consider.
Commercial arrangements can be very practical and suit those that are time-poor, without much time to spend boating. The boat is maintained for you and ready to step aboard at your allotted time. But prospective buyers should be mindful that they may not be given their preferred time slots.
Most of these services operate like a club or timeshare. Shareholders may need to designate their preferred usage period for the 12 months ahead. Depending on the number of vessels operated by the company, popular times like school holidays, Easter and Christmas may not always be available.
If sharing with friends or family, be aware that the vessel will need to be registered and insured in one person’s name. That person holds the major responsibility for the vessel. Penalties from Maritime Authorities and Water Police may include a vessel being impounded. Trust between the shareholders can be paramount for the success of this type of arrangement. If one party disobeys the law and operates the boat in an illegal way, the outcome could penalise all parties.
When sharing with friends, in addition to your loan cost, you will have to share the mooring or storage, registration, insurance, repairs and maintenance. Trusting each other to treat the vessel properly to minimise wear and tear will be important and each party will need to do their bit.
No shareholder will be able to offer the vessel as collateral. So, it can’t be repossessed if one shareholder defaults on their individual unsecured loan payments. But where a borrower does default on an unsecured loan, lenders can pursue legal channels and actions to recover monies owed. This may result in the boat needing to be sold.
If you decide sharing is the right way to a boating lifestyle for you, speak with us about how we may make it a very affordable decision.
For a quote on Share Boat Loans, contact Jade Boat Loans on 1300 000 003.
DISCLAIMER: THE INFORMATION AND SPECIFIC DETAILS CONTAINED IN THE CONTENT OF THIS ARTICLE HAVE BEEN PREPARED AND ARE PRESENTED PURELY AS GENERAL INFORMATION AND NOT INTENDED AS THE ONLY SOURCE OF FINANCIAL ADVICE FOR BOAT BUYERS AND LOAN BORROWERS. FOR THOSE THAT CONSIDER THEY REQUIRE SPECIFIC ADVICE, THEY SHOULD CONSULT WITH A FINANCIAL ADVISOR. LIABILITY IS NOT ACCEPTED IN REGARD TO ERRORS AND MISREPRESENTED DATA AND DETAILS HEREIN.
