For the avid Montana fisherman, having a boat of your own can be a life-changer – especially come springtime when the temperatures begin to rise and tourists haven’t yet swarmed the nearby rivers and lakes. Even if you’re not into fishing, the idea of spending the weekends cruising around a lake, wakeboarding and tubing isn’t a bad vision either.
However, purchasing watercraft can make a dent in your bank account whether you’re looking at a cruiser, a jet ski or a drift boat. So, if you’re thinking about investing in your own boat this year, it’s wise to start budgeting and planning your finances now. Here are a few tips to help you buy a boat this spring.
Decide on the Boat You Want
Consider what kind of boat will meet your needs in terms of capacity and functionality and whether you want to buy used or new. While you don’t need to have the exact make, model and year picked out, you should have a pretty good idea of what you want and what it will cost you. The cost will determine how you budget and help you make decisions about how to pay for it.
Factor in Recurring Costs
Buying a boat is one thing, but storing and maintaining it is another. If you plan to purchase insurance for your boat, factor that into your monthly costs. If you don’t have an adequate place to store your boat on your property, consider the costs of storing or parking it elsewhere. Beyond that, you’re sure to accrue costs for gas and repairs, and registration and taxes will be required as well. These are all items you’ll need to add to your monthly budget, so many sure you can afford them reasonably while still paying your other necessary bills.
Consider Payment Options
Now that you have a good, general idea of the price tag you’re looking at, you can begin to think about how you’ll pay for it. As with most large purchases, you have two options: pay for it in full upfront, or finance your purchase and pay it in smaller increments over a defined period of time with interest. Most people choose to finance these types of purchases, and getting a loan is the next step.
Choose Your Lender
If you choose to finance your boat, you’ll have a few options: arrange financing through your boat dealer, get a loan with a bank or credit union, or get a loan with another type of financial institution. The most important thing to consider when selecting a lender is interest. A lower interest rate will result in a lower overall cost to you over the life of the loan. Credit unions – including Rocky Mountain Credit Union – tend to offer lower interest rates than banks, so it’s worth calling around to see if they can give you a competitive rate.
Once you’ve selected the lender you want to work with, you’ll be able to apply for a loan. At this time, you’ll need to consider how much you want to contribute to a down payment, which will then determine the amount of your monthly payment. You should put as much as you can towards your down payment while staying within your means, as this will result in a lower monthly payment. After completing your loan application, your lender will review your credit, giving them a more concrete idea of the interest rate they can offer you depending on the loan term you choose. Once your application is approved, you’ll be ready to purchase your boat!
Wherever you are in this process, it never hurts to reach out to a lender to see what kind of rates and terms they offer. At RMCU, our consumer lenders can give you an idea of how much you may be able to afford, and even provide tips on how to improve your credit score so you’re ready when it comes time to apply for a loan. Contact us today, and buy a boat in time for the snow to thaw.
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