Along with the recent surge in boat sales, the market is also seeing an increase in demand for boat-share arrangements. These are similar to the well-known timeshare holiday house concept which has been around for a long time. If weighing up which way you should go, single-handed or shared, we explain the loan options available and ‘food for thought’ in making the big decision.
Boat Loan Options
We offer two loan options for the purchase of privately-purchased boats for general recreational activities:-
The secured loan has a lower interest rate and the boat would need to be available to be used as security against the loan. In the case of shared ownership, offering the boat as security is not usually practicable. For shared options, an unsecured loan can be considered.
Single Handed v Shared Boating
- Spontaneity v planning: Giving serious thought to how you really want to enjoy your boat is paramount in deciding if you enter a timeshare-style deal or purchase your own boat. If you like to head out whenever you have a few hours free, a surprise day-off is available, when the fish are biting or when the family want a weekend away at the spur of the moment, then owning your own boat could be the preferable option. In a time-share style arrangement, you will be limited to how many days you have access per year and in some cases, it may involve booking well ahead. As with all such arrangements, certain periods such as school holidays, long weekends and Christmas holidays will always be in big demand.
- Shared costs: Sharing boat ownership on any type of arrangement has the attraction of being able to share the costs of mooring, storing, insuring and maintaining the boat. With timeshare companies, all these costs are usually included in the contract. If sharing with one or several friends or family members, these costs can be split across the group. Weighing up all the costs of owning a boat should be considered in conjunction with the purchase price.
- Read the fine print: Reports have emerged recently of major pitfalls with timeshare holiday home arrangements with contractual costs costing far more than simply renting accommodation as required on the market. Exiting such arrangements can also be challenging. While there are also reports of good outcomes with current boat share companies, the detail of the contract should always be studied closely to ensure it meets your individual requirements and the individual business making the offer also considered closely.
Buying with a Boating Partner
Another option is buying a boat with a friend or family member. There are a number of factors to consider with this set-up. Talk to one of our Jade consultants about the possibility of both persons being party to a Secured Boat Loan. This would be subject to lender guidelines and may not be workable.
A more realistic and available option is for both individuals to take out their own separate loans for their share of the boat. This option can be achieved with individual Unsecured Personal Loans. Requesting a secured loan on part but not all of an asset can raise complications. If one party defaults on their loan payments, the lender would have the right to repossess the boat. That creates issues for the second party who could be maintaining their required payments. Lenders may not be willing to extend credit under such circumstances. So unsecured loans are the better option.
- If both parties take out unsecured loans, the boat does not form part of the security of either loan. Additional security or guarantee by way of other property or assets may be requested by individual lenders.
- You both share the running costs of the boat but have separate responsibilities for your own loan repayments.
- If purchasing a timeshare option, that could be financed through an Unsecured Personal Loan.
Boat Loan Refinancing in Event of a Split
If a boat-owning partner decides they no longer want their share of the boat, the other party may consider a refinancing option to purchase the other share. Boat Refinancing involves replacing an existing loan with a new loan.
If an unsecured loan for half of the boat is existing, this could be rolled into a new loan which also includes buying out the other person’s share. The new loan, with just one borrower, could be arranged as a Secured Boat Loan. The boat could be used as security against the loan.
Calculating Your Best Boat Loan Option
Using a boat loan calculator is a great way to work out the best way to move forward with your boat buying plans. Should you buy the boat on your own or in partnership with another person or through a sharing company?
Secured Boat Loans offer a lower interest rate than Unsecured Personal Loans. By entering the amounts for buying a boat outright with a Secured Loan compared with a part on an Unsecured Loan you can compare the repayments.
If the repayments on the secured loan are beyond your budget expectations, consider buying a cheaper boat. Enter the purchase price of the cheaper priced boat into the calculator with our low interest rate for Secured Boat Loans and see what your estimated repayments may be. Alternatively, you may also like to utilise our boat finance interest rates tool, which allows you to compare banks and lenders Australia wide.
Request Marine Finance Quote on the Options
With our interest rates on Secured Boat Loans at historic lows, with the freedom of using your boat whenever you want and avoiding the potential complications of shared-ownership, buying a boat by yourself could be a very attractive decision.
To discuss your boat loan options on different scenarios, contact us for an obligation-free and highly informative conversation with one of our consultants.
Contact us on 1300 000 003 for a marine lending quote.
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 MISPRESENTED DATA AND DETAILS HEREIN.