Buying a used boat can be a great way to save money and land a great deal. However, there are generally a few extra steps required in order to obtain financing. What do banks require before backing you up on a used boat?
A lender is obviously only going to fund you up to the estimated value of the boat. So how do they determine this value? The most common way is the NADA Guides which are a standard valuation tool for both cars and boats. While these values can vary with different boat manufacturers and are not exact, most lenders use Nada as a ballpark. When creating a Nada guide evaluation, be sure to add in options, trailer, etc to increase the chances of obtaining a larger loan if you are looking to finance as much as possible.
Lenders will also look at a few other factors including similar boats on the market, depreciation values, and condition. Condition is a huge factor when buying a used boats for both you and the lender and most will require a survey.
Boat Survey by SAMS Accredited Surveyor
Though it comes at a cost, most lenders will require a full insurance pre-purchase survey on any used boat. There are exceptions, but at the end of the day…unless you are an engine mechanic, surveying a used boat is a good idea for both you and the bank.
How do I find a surveyor? Why do banks need a boat survey?
Most lenders will require your surveyor to be a member of the Society of Accredited Marine Surveyors which requires their members to pass tests, attend meetings, and regulate the industry. Most surveyors cost between 17-24 dollars per foot and will go through the boat top to bottom looking for deficiencies, issues, equipment list, moisture, and will also put an estimated value range on the boat.
Though it cost money, fully surveying a used boat is invaluable when it comes times to negotiate price and knowing any issues with your purchase. A surveyor will send you a report generally 2-3 days after the survey and you forward it direct to your lender. It is also recommended on boats 30’+ with diesel engines to have an engine survey conducted.
Used Boat Age Financing Cutoff
While it certainly becomes tougher to finance an older boat, most anything 15 years old or newer should be easily financeable. If you think of it from the lender’s perspective, they have to be able to assign value to the asset they are loaning against…so a 25 year old 18 foot boat will be tough to sell on their end, so they will most likely pass unless you can prove its worth.
Larger vessels retain value longer and a 20 year old 50 footer should be quite easy to finance as long as it is in good condition. Your finance company will no doubt require a full survey on older vessels so be sure to work this into your financial plan when making an offer.
Finding the Right Lender
Finding a great rate on a used boat can be tough, but there are plenty of options. Here at Boat Financing Guide, we actively search out the best lenders who specialize in marine financing. Ready to get started? Simply submit your email below and we will put you in touch with the best in the industry!