New or Used?

When deciding to purchase a boat, you must decide whether you are going to buy a new or used boat. We will take a look at the merits of both so you can make a well-informed decision for your situation.

 

We will look at another example to help you make your decision. (Note that the numbers being used are the national averages, when available.) We will assume you will finance both boats for 36 months, you want to own your boat for seven years, and you have a $2,000 down payment. We’ll run down the details of both boats and then chart the details for your comparison.

 

New Boat: The interest rate for a new boat is 5%, and the boat you are considering costs $15,000. Monthly maintenance on a new boat will cost you about $30, so we will factor that in. We’ll have to add in taxes and assume that your boat will depreciate at an average rate.

 

Used Boat: The interest rate for a used boat is 5.5%, and the boat you are considering costs $12,000. Monthly maintenance on a used boat will cost you about $50, so we will factor that in. Again, we’ll add in taxes and assume that your boat will depreciate at an average rate.

 

Here is how the two boats compare to one another:

 

 

Analyzing the chart above can differ based on what is important to you, but, generally speaking, it would appear the used boat is a wiser decision. It has a lower average annual cost, a lower monthly payment, a lower depreciation over the life of your ownership, and costs you less in interest paid. The new boat is worth more at the conclusion of your ownership, but the money you saved in the other areas makes that negligible.