There’s nothing quite like seeing the oranges, reds, and pinks of a beautiful sunset spread out over the horizon with nothing but water in every direction. Breaking the bottle of champagne over the side of the boat to christen it, revving the engines up for the first time while leaving the dock, and naming your boat are all special ‘firsts’ to look forward to when you buy a new boat. 

You can explore local watering holes as well as exotic destinations. You now have access to places that your car may not be able to take you and you’ve unlocked an entirely new aquatic paradise. You can jump off your boat and go for a swim, go snorkeling and catch glimpses of coral reefs and stingrays, or you can bask in the sun while cracking open a cold one. 

So many people dream of one day owning a boat and being able to create everlasting memories with their friends and family onboard. You can take a breather, find a new water sport that you love, and focus on something other than work. The possibilities are endless when you own a boat. But, let’s be realistic, you need to be able to afford to purchase and maintain your new boat before you can live out your wildest boat dreams. 

Consider financing a new boat to relieve some of the initial financial burden. Instead of paying the full amount of the boat upfront, you put down a down payment of 10% to 30% and finance the remainder. Trident Funding offers new boat loans. You can use our free boat loan calculator to see how much boat you can afford and then you can apply for a new boat loan online in just a few minutes. Get approved within 48 hours and then get out on the water as soon as possible. 

New Boat Loans: The Details

So, you’ve decided you’re going to buy a brand, shiny, new boat, and you want to check out new boat loans so you can afford to buy it without this major purchase putting a strain on your finances. With a new boat loan, expect to put a down payment of about 20% down. This varies and can be as little as 10% or more than 30% but it’s usually around 20%. For example, if the boat you want to purchase costs $200,000, then expect to put $40,000 down. You will also need to have money available for boat lender fees, taxes, title transfer, and boat insurance. 

The term of the boat loan is the length of time that you’re financing the boat; basically the length of your boat loan. With new boats, boat loans typically range from 7 to 20 years. The longer your loan term, the lower your monthly payment, but the more you will pay in interest over the life of the loan. For example, if you buy a $200,000 boat, put 20% down, have an interest rate of 6.39%, and finance $160,000 over 20 years, your estimated monthly payment will be $1,182.53. If you finance the boat for 7 years, your payment will be higher, around $2,367.40. 

Interest rates on new boat loans vary depending on a number of factors including the current market rates and the borrower’s financial profile and their credit score. Typically, the higher your credit score, the lower your interest rate. As of January 2023, expect new boat loan rates to start around 6.74% for borrowers that are well qualified and have excellent credit. Borrowers with less than excellent credit will usually receive a higher interest rate. 

Financing a New Boat vs Financing a Used Boat 

You can finance a new boat or a used boat but there are some differences to keep in mind. Most lenders will finance boats that are 20 years old or younger. However, boats that are in poor condition or have a high number of hours on them may not be able to be financed. Or if they can be financed, they may require larger down payments and stronger overall borrower financial profiles and may come with less attractive boat loan rates and terms. 

Lenders typically consider new boat loans to be less risky than used boat loans so they offer better rates and terms on new boat loans. They know that new boats have been inspected, often come with a manufacturer warranty, shouldn’t need any immediate repairs, and they’re typically seaworthy, and in good condition. The likelihood of a new boat breaking down is less than that of a used boat. Lenders think that because boat owners won’t need to spend money on repairs or immediate maintenance, they will be able to make their boat loan payment on time, so this adds to their security in getting paid back on a new boat loan. 

Pros and Cons of Buying a New Boat 

In addition to the better financing options, there are other benefits to consider when buying a new boat. Let’s take a look at both the pros and cons of buying a new boat. 

Pros

  • No one has used your boat before: You are the first and that is special. 
  • Manufacturer warranty 
  • Customize and choose the features you want, colors, and even some design elements
  • You don’t need to know the boat’s history because it doesn’t have any
  • Everything is in working order

Cons

  • You’re paying for being the first owner; you’re paying a higher price than if you bought the same boat but with some hours on it
  • Depreciation: You’re taking a hit on the initial depreciation of the boat. As soon as the boat is titled and leaves the dealership it depreciates. Expect a new boat to continue to depreciate for about 7 to 10 years. 
  • You won’t be able to negotiate the price as much as you would be able to with a used boat. 
  • You will be the first one to scratch the side of the boat, rip the upholstery, or dent the hull. 

Additional Expenses Involved with New Boats 

In addition to purchasing the boat, putting down money as the down payment, and paying the taxes and registration fees for the new boat, there are also some other expenses to consider. It’s important to factor these into your budget so you don’t end up spending more than you can afford and not having enough funds for incidentals. Keep the following in mind when buying a new boat:

  • Boat insurance: The lender will require this and it’s always recommended. Expect to pay around 1 to 3% of the cost of the boat per year in insurance. For instance, if you buy a $200,000 boat, your insurance may cost between $2,000 and $6,000 per year. 
  • Storage: Where are you going to keep your new boat? You want to store it in the correct place for that type of boat. Consider indoor and outdoor storage as well as wet and dry storage. Prices vary based on locations and the size of your vessel. 
  • Maintenance: Even new boats will need maintenance. Follow the maintenance schedule of your particular boat and keep records every time your boat is serviced. 
  • Cleaning: Boats need to be cleaned inside and outside every time they are used and even if they’re not being used, they still need to be regularly cleaned, especially if they are being used in saltwater. 
  • Gas: If your boat uses gas or diesel fuel, keep in mind how large your tank is and the current cost of fuel, as well as how often and how far you plan on driving your boat. 

The Wrap Up: New Boat Loans

New boat loans generally offer the best rates and terms among all boat loans. You will be the boat’s first owner and will reap those benefits but will also take the brunt of the depreciation hit. Lenders consider new boat loans to be less risky than used boat loans so you may receive the most favorable terms and you may qualify for a higher loan amount than if you were getting a used boat loan. When shopping for new boat loans, remember to consider all of the expenses involved with owning a boat and stick to a budget that you can afford. 

Frequently Asked Questions: Financing a New Boat

What is a Good Credit Score for New Boat Loans?

A good credit score for new boat loans is anything over 680. Sure, you may get approved for a new boat loan with a lower score, but you won’t have access to the best rates and terms. Typically, the higher your credit score, the lower your interest rate. If you have a credit score over 800, that’s considered top-tier or excellent credit and it will afford you access to the best boat loan products and the most competitive rates. 

Where Do You Get the Best New Boat Loans?

The best new boat loans can be found at Trident Funding. We’re a trusted financing partner that offers competitive rates, concierge level service, and terms up to 20 years. We finance new boats, used boats, recreational vehicles, and we also refinance boat loans. 

You can check out our boat loan calculator to get an idea of how much a new boat loan will cost you. Then apply online. We treat each client like family and we walk you through each step of the process; starting with the new boat loan application to scheduling Coast Guard inspections, marine surveys, and all the way to the closing table. No detail is too big or too small for them to handle and we make the entire financing process smooth sailing. 

What are the Interest Rates on New Boat Loans?

Interest rates on new boat loans are constantly changing based on changing market conditions and factors like inflation. These rates also vary based on the type of loan you get, the loan term, the loan amount, and the borrower’s financial qualifications including their credit score. 

As of January 2023, expect new boat loan rates to start around 6.74% and go up from there. A well-qualified borrower with a credit score over 800 can expect a rate from around 6.74% to 6.99%. Check out Trident Funding to see what rates we offer. Our rates are always competitive and we have been a marine financing leader for more than 30 years. 

When is the Best Time to Buy a New Boat?

The best time to buy a new boat is whenever is the right time for you. You need to decide if you’re financially ready for this large purchase and if you will have the time to enjoy it. Keeping those things in mind, the best time of year to buy a new boat is usually in the fall. This is when many boats start to be taken inside or out of the water in cooler climates and the boasting season usually wraps up in the fall unless you live somewhere that is warm year round. 

This means that you may be able to get a good deal on a new boat because there is less demand during this time of year. You may also be able to find the particular boat you want in stock with no waiting period. Additionally, some boat manufacturers and dealers will be trying to get rid of current year models to make room for upcoming models, so you may get a discount for buying the boat now. 

However, keep in mind that the best time of year to buy a boat depends on where you live. Places like South Florida, Texas, and Southern California enjoy boating all year round so you may not get the deals that you will see in places like Maryland, Michigan, and Washington.