Buying a new or used boat can be a daunting task just as is anything when it comes to spending a small fortune on it. So here is your guide to a few key things to be looking at, asking for and taking into consideration when looking to make the move of updating or joining the crowd of new boat owners.
Boats, just like vehicles come in many different shapes and sizes, with each design being built for a particular use. That is the first step when in search of your number one leisure activity purchase. Know what you are purchasing it for. Are you a hardcore fisherman or maybe an occasional weekend angler but need the ability to pull water skiers? Maybe you are looking to entertain friends and family during your weekend getaway. Guess what? There is a boat for virtually every circumstance listed here and many more. If you identify your need or want for a new or used boat, it will help you limit your search to the right type of boat and dealer that can guide you through the process.
Now that you have figured out what you want in a new boat, you will need to determine your budget. A new boat is a big investment, so don’t forget to consider a slightly used model to save a few thousand dollars. Most dealers have a few used models available. One thing I can guarantee you from the few boats I have purchased is the price has never gone down from year to year. So if you’re looking to purchase a new boat, just remember it’s not going to get cheaper next season.
Like I said, this can be a major purchase, especially if buying new. A few things to consider: how long do you plan on keeping the boat, what is the resale value of a particular brand, and what type of warranty options are available? Most years during boat buying season (January-March), boat manufacturers offer promotional deals such as extended warranties, cash back and added accessories as incentives to purchase a new boat during these three peak months of the boat buying season. It’s hard to pass up extended warranty promotions, especially if you don’t plan on keeping the boat more than a couple of years. This will be a huge factor in its resale value.
A major part of the budget process is also deciding on how to pay for the boat. If you have you been dreaming about this day since your 13th birthday, and have been putting away money since then so you can now pay cash, good for you! But for most of us, it’s a matter of financing the boat. There are several options when it comes to financing a boat. You, of course, could work with your local banker or credit union and in some circumstances, they can get you a very good deal. However, more often than not a dealer can offer you financing that most banks can’t. The dealer will handle everything for you and many dealers are able to offer longer-term financing, making your monthly commitment to having fun on the water a little more enjoyable.
By now you have narrowed down the type of boat you want and most likely have looked at several different brands and even been quoted a few prices and payment options. Now is time to make sure you are getting exactly what you want. Negotiate with the sales rep on the accessories such as electronics, trolling motor, radio and any other accessory that may not be included in the original price. Many dealers can offer these items to you at a discount to help them make the deal. You won’t get what you don’t ask for, so it never hurts to negotiate. Upon completion of negotiations and before the deal is done, make sure you see and verify all the options you asked for, and are receiving, especially on a new boat. If you are looking at a used boat, it’s perfectly normal to ask to speak to the previous owner and if a test ride is possible then take it. Don’t get caught up in how many hours are on the motor, even though that is an important aspect. But if it has been well maintained, I would consider it just broken in.
One very important aspect of purchasing a boat that is overlooked at first, and far too often, is how much will it cost to insure it? What do I have to do to insure my boat properly? Most people just add it to their current policy that they have their home and auto on. In some circumstances, that may be just fine. As I stated previously, a boat can be a major investment and like any major investment, you want it to be as little risk as possible. This is where the right insurance policy comes into play.
Let’s face it, insurance isn’t something we like to talk about or deal with, and we only want it when we need it. Being properly covered from the beginning will save you a lot of headaches in the end if an unforeseen accident ever happens. I have trusted my marine insurance with one of the top marine insurers in the upper Midwest: Worldwide Marine. A good insurance company is only as good as the agent, and Bob Luellen knows marine insurance and has worked in the Marine insurance industry, creating policies and practices for years.
A few very important factors of one’s insurance policy that are not thoroughly looked at or discussed are:
1. Actual Cash Value (ACV). This can really come back and bite you in the backside. ACV is the amount that the watercraft is valued at the time of the claim. Just like vehicles, boats and other watercraft depreciate as well and, in most circumstance, they depreciate faster than what you owe on the boat. This could literally leave you high and dry if your boat was to be totaled out and you still owe 10k more over the ACV that was paid out.
2. Agreed Value Policy. This is where a good agent comes into play, such as Bob. An agent that knows marine insurance will always recommend this type of policy. This is where you and the insurance company agree on a dollar amount for the boat, and all its accessories. This is the amount that will be paid out in case an accident was to happen.
3. In most incidents, the claims are for “Partial Loss” whereas it’s the lower unit hitting an obstruction, or maybe some theft of the electronics on the boat itself. Most insurers will depreciate the items that were damaged or stolen and payout the current depreciated value. It’s very important to make sure you have a rider or coverage to protect you against the depreciation.
The key takeaway here is that insurance can be very complex, and its best left to the experts. And when I say experts, I mean a Marine specialty agent, not just any insurance agent. You wouldn’t ask your dentist to fix your car, would you? So why ask a company that specializes in Home insurance to insure your boat, when there are a lot of different variables that come into play vs. home and auto. Like I stated previously insurance isn’t something we talk about with our friends and family, but it’s certainly something we should be talking to a Marine specialty agent about.