Just like everything else before the economic collapse, boats were easier to finance pre-2008. Today it’s a challenge to finance a boat that was built before the mid 1980’s. But things are getting better — between 2008 and earlier in 2013 it was difficult to finance a boat that was built before the early 1990’s.
There are some definitive guidelines that marine finance companies use when dealing with funding older boats. Marine lenders may fund the purchase of an older, high quality boat but not an older mid-range or lower quality boat. It may not be possible to borrow money for an older $30,000 boat, but funds would be available for an older $75,000 boat of a similar size and model. In this case it is assumed that the “higher value” boat also stands for higher quality, and will therefore stand the test of time.
The rates paid on borrowed money will depend on such qualifiers as the amount of down payment and the buyer’s credit rating. Sometimes buying an older boat takes a little more effort and there are more hoops to jump through, such as providing tax records and income statements. Also, once a boat gets to be older than 20 years, a premium is added to the cost of borrowing. So those boats that are 21 to 30 years old are more expensive to finance.
I have found that buyers are more likely to obtain loans for boats if they go to marine lending institutions rather than regular banks. The agents know boats and understand the purchasing and survey process as well as the valuation of boats better than agents at mainstream, local banks. But sometimes if buyers have a very good relationship with their local bank their agent can get creative to help them purchase their older dream boat.
Why are older boats hard to finance? Because purchasing a boat is not an investment in most cases. Boats depreciate yearly; it’s the rare boat that appreciates as time goes by. Some hold their value better than others but eventually most production boats will all go down in value. If they are not maintained constantly their parts wear out, their systems become worn and tired and even the integrity of their fiberglass hulls can be degraded. Boats with the highest level of maintenance are still going to depreciate but certainly a hull survey will give a higher value to a well-maintained boat over a poorly maintained one, and that helps with financing.
The difference in those high and low values are not going to be as great as many people think. Look at it like this — a 2009 Honda Accord in great condition, with a sunroof, leather interior and a navigation system might fly off the used car lot faster than a 2009 Honda Accord with cloth interior and no extras, but they are still 2009 Honda Accords and the selling price is not going to be wildly different. Same with boats. Good maintenance and amenities matter more to peace of mind and will help a boat sell faster (and in the higher range), but there is still a range that has to be acknowledged by buyer, seller and the finance company.