5 Tips to Finance Your Boat
There are several things to consider when you’re thinking about buying a boat. Being financially able to own a boat and making sure that you have the time for a boat are two major things to consider. Once you’ve decided that you’re officially ready for the new responsibility, there are a few important things you should know.
Shop local at Hagadone Marine Group
Shopping at your local boat dealership will be a definite help for you. Your local dealership will be able to help you find the best type of boat for your needs, and they’ll be able to help you choose the loan that best fits your budget.
Don’t pull my credit score!
When shopping around for your new shiny vessel, make sure you don’t allow every single business to pull your credit score. Many people don’t realize that pulling their credit score over and over again will, in fact, lower their credit score every single time it is pulled. If a dealership pushes you to pull your credit score to see what the ‘best deal’ is that they can offer you, simply say, “Thanks but no thanks, I’m just shopping around right now.”
Financing your boat
Ask the dealership that you visit if they finance boats. Financing directly through your dealership has several advantages. A dealership can offer extended warranty programs, manufacturer and dealer incentive programs, year-round service departments, access to multiple finance sources, special manufacturer and dealer finance programs, and so much more.
What you need to bring
The application and underwriting processes might take a little while, but there are some documents you can bring with you in order to speed along the process once you find that perfect boat to invest in. Some dealerships require you to come to them to fill out the application, others will start the application process over the phone or some have a form you can securely fill out online. Depending on the size of your loan, you may need to provide copies of tax returns for the past two years. You might also be asked to bring a personal financial statement, which is simply a statement that shows your net worth (assets, liabilities, etc). You should also bring the boat information, just to be safe. Such as the year, make, model, power, optional equipment and upgrades are necessary for the application. You will need to identify the total cost of the boat, which includes the purchase price, sales tax that will be paid at the time of purchase, equipment upgrades or additional accessories you’re considering, and the registration, title, or documentation expenses. Don’t let this overwhelm you, we’re here to help make the process as simple as possible.
Tax Breaks for Boaters
There’s nothing better than buying a new boat and finding out that you may be able to legally deduct your boating costs every year. Many boaters don’t realize that these tax deductions are even available, so listen closely!
- Boats that are able to be lived in can be deducted off of your taxes as a ‘second home’. Boats with at least one berth, a permanent stove/grill (to cook), and a head (even if it’s just a porta-potti) qualify.
- If you use your boat to entertain clients and/or potential customers, you can deduct 50% of those outings off of your taxes. This does not include regular maintenance or depreciation of your boat. Food, drinks, fuel, fees, etc., are obvious deductible products when conducting business on your boat. The IRS is very strict about this deduction, so make sure you keep a record of everything that was used and spent on these particular events.
- Maybe it’s time for you to upgrade – instead of selling, donate! Donating your boat to a charity is tax deductible. In many situations, you can get more out of the boat donation than you can by selling your boat outright.
- Using your boat as a business (tours, fishing, and educational purposes) allows you to write off the depreciation, maintenance, equipment, fuel and mooring costs. You’ll need to keep a detailed record of times that you use your boat as your ‘side’ job since most people don’t strictly use their boats for ‘work’ purposes.
For more detailed information about these tax breaks, read Discover Boating’s “Tax Breaks for Boaters” article.
After you have taken in all of this information and gone through all of the processes, you very well may need a vacation – perfect timing to test out that beautiful new boat.