Is It Worth It to Own a Boat?

When it comes to boating, there are two camps—those who see a boat as nothing more than a hole in the water to throw money into. And then the boat owners who believe having a boat is nothing short of owning a slice of happiness.

Maybe a person is considering a small boat to fish the local backwater. Or, they have their eye on a luxurious cruiser to host their next cocktail party. Either way, buying a boat is a big financial decision. But, if a potential buyer is still on the fence, below are a few reasons why owning a boat might be worth it.

Reasons to Own a Boat

Deciding to own a boat is as much a personal decision as it is a financial one. Here are five reasons to help a potential boat owner want to jump in feet first.

• Get Social – Boat owners can take their boat out on the water form new bonds with other boat owners while at the local marina, boat slip, or local beach.
• Enjoy nature – So many of the country’s most beautiful landscapes can only be seen from the bow of a boat, and boating puts a person in the center of it all. They can explore new areas, fish in new spots, and enjoy the scenery.
• Reduce stress – Owning a boat helps reduce stress because it provides an escape from the hustle and bustle of everyday life. Being around water improves mood by lowering cortisol levels.
• Great exercise – Boating is a great way to get some exercise and provides an endless number of water activities, including swimming, wakeboarding, snorkeling, and diving, just to name a few.
• Family bonding – Owning a boat is an excellent way for families to bond while relaxing and having fun. Families will learn new skills, experience the beauty of nature, and explore new destinations while creating memories.

How Boat Loans Work

The first financial decision will be how to fund the purchase of a new vessel. For many soon-to-be sailors, financing their purchase with boat loans may make the most sense.

A boat loan is a set amount of money a person can borrow and then pay back with interest in regular monthly installments. The amount of the monthly installment is determined by several factors:

• Repayment terms – Loans can extend for up to 20 years. A longer-term loan will lower the monthly payment and increase the amount of interest a person will pay.
• Credit history – A buyer’s credit history measures their ability to repay a loan. It determines the amount they may borrow, the required down payment, and the interest rate.
• The amount borrowed – How much a person decides to borrow impacts their monthly payment. The larger the loan amount, the higher the monthly installment and vice-versa.
• Annual interest rate – Interest rates on boat loans vary based on credit history and other factors. Higher interest rates translate into higher monthly installments.

Most boat loans are secured by using the boat as collateral. This means if the owner of a boat stops making payments or goes into default, the lender may be able to repossess it. The owner may also have the option to take out an unsecured personal loan. However, lenders view these loans as higher risk and may lower the amount they are willing to lend and charge a higher interest rate.

The Bottom Line

Owning a boat can be one of the most rewarding choices. But like many decisions, much of this experience will be what they make of it. It can be worth it to own a boat because of all the unique experiences that come with it. From exploring new areas and going on adventures to simply relaxing on the water, there’s something for everyone to enjoy.

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