Long loans hide bad prices. Do the math first.

The term is the trap

Lenders will write marine loans over very long terms, especially on larger balances. A long term drops the payment and raises the total interest. It also means the loan balance can fall more slowly than the boat's value, leaving you owing more than the boat is worth for years. That is called being upside down, and it is what makes a boat hard to sell or trade when your plans change.

Slide the term from 8 years to 15 in the calculator and watch the interest line. Nothing else about the deal changed.

Dealer-arranged financing and the rate markup

When a dealership arranges your loan, the lender approves you at a rate, often called the buy rate. Many lender agreements let the dealer write your contract at a higher rate and keep part of the difference. It is legal, it is common, and it rarely comes up in conversation. The only defense is a number to compare against.

What lenders look at

• The boat's age and type. Many lenders limit how old a boat they will finance, and terms shorten as boats age. Policies differ, so ask early when you are buying used.
• A survey. For older or larger boats, lenders and insurers commonly ask for a recent marine survey to support the value.
• Down payment. More money down means less interest and less time upside down.
• How the boat is titled. Larger boats documented with the U.S. Coast Guard are usually financed with a preferred ship mortgage recorded against that documentation. State-titled boats carry the lien on the title.

Agree the out-the-door price first. Then, and only then, talk about how to pay for it.

The finance office sells products too

Extended service contracts, gap coverage and protection packages are usually offered while the loan paperwork is being drawn up, quoted as "only a few dollars more a month." Ask for each product's full price on its own line. Decide on each one separately. Most can be declined, and many can be bought later if you change your mind. Our dealer fee guide covers them.

Where we fit

We do not lend, broker loans, or take referral money from anyone who does. As your buyer's agent, we read the finance terms along with the rest of the purchase agreement and point out a marked-up rate or a padded product when we see one. If all you have is a quote, the free deal check covers the financing lines too.

This page is general information, not financial advice. We are not a licensed lender or financial adviser. Talk to a qualified professional about your own situation.