Whether you're going to
sail the open ocean, fish your favourite coves or chart a course to your
dream retirement buying a boat is the adventure of a lifetime. You can
find many exceptional values in used boats they can be affordable,
seaworthy, well-built and well maintained. To make sure you get years of
pleasure and adventure out of your used boat, buy smart.
The following link to the
Boating Industry Association web site will assist you in making your
decision. Remember to come back to our site.
www.bia.org.au/choosing.html
Buy a used boat through a
licensed yacht and shipbroker.
They're experienced.
Plus, they're professionals who specialize in this business. They also
have instant access to Statewide, National and even International networks
of boat owners and brokers with boats to sell.
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Where to start
Contact licensed yacht
and ship brokers. They specialize in helping you find the right used boat
for you, and their extensive networks of listings and brokers can provide
you with the most complete choice of boats.
An Offer to
Purchase
After you decide on the
boat you want to buy, your broker prepares an Offer to Purchase for your
signature. You also make a good faith deposit on the boat, usually 10
percent of the purchase price. Your deposit goes into a bank trust fund
that a licensed broker administers.
You control the
deposit
By law, your money can't
be spent without your written authorization, and your Offer to Purchase
should always depend on your satisfaction of a Sea Trial and Survey. See
below for more details.
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Securing a loan is fairly
simple if you have a good credit history and can make a down payment,
usually 20 percent of the boat's total delivered price.
You may want to
pre-qualify for a boat loan before you shop. That will give you some extra
leverage and breathing room when you're negotiating prices.
Financing your Boat
SOME COMMONLY ASKED
QUESTIONS ABOUT BOAT FINANCING, with the compliments of FINLEASE
(AUSTRALIA) PTY LIMITED -
www.finlease.com.au
Q. Can I finance up to
100% of the boat price?
A. Yes, the majority of
New & Used boats are 100% financed, however the buyer can elect to pay any
level of deposit they desire.
Q. Do I need to provide
any other security in addition to the boat for the loan?
A. No, usually the boat
is the only security.
Q. Would I qualify for a
boat loan?
1. You need to show
that you can make the finance payments from your annual income.
2. If you require 100%
finance, you will need to show that you have some "tangible" net worth
such as equity in Real Estate or investments. The Finance Companies will
NOT want a mortgage, they simply want to feel comfortable that you have
the ability to make good any shortfall between the second-hand value of
the boat and the amount that they initially financed.
3. You have a good
"credit history".
4. You have been in
stable, continuous employment.
Q. How many years can I
have the loan for?
A. Usually up to 5 years,
however if required a Residual of up to 40% can be structured into the
loan in order to keep payments lower. This Residual can be re-financed for
a further period of up to 5 years at the end of the initial term.
Q. Can I finance a USED
BOAT?
A. Absolutely, at least
50% of all boats financed are used. Typically, the boat would need to be
no older than 15 years for this finance, however there are always
exceptions. We have financed a 1953 Halvorsen Bridgedeck Cruiser where the
borrower was strong enough.
Q. How much does it cost?
A. Your costs depend on
several factors, such as:
1. How much
boating experience you have
2. Whether you
have previous insurance claims
3. What kind of
navigational equipment your boat has
4. Where you
will use your boat
5. The boat's
value
Expect to pay more for
insurance if you're going to own a high performance boat or a wooden boat.
www.clubmarine.com.au
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The seller has accepted
your offer on a boat. You've lined up your financing. Now it's time for a
sea trial to see how this boat handles and performs in the water. The
seller usually provides the sea trial. Your broker will usually go with
you on the sea trial to answer your questions.
A survey is your
opportunity to find out any problems, see if everything works properly and
determine the boat's condition. Buyers pay for the surveys and for hauling
the boat out of the water for inspection.
If an unforeseen problem
shows up during the survey, you might be able to negotiate it into the
final price.
Use a marine
surveyor
Who can survey my boat &
what qualifications do you look for? Until recently there hasn't been any
specific qualifications required for marine surveyors. TAFE now teaches a
certificate level 4 qualification in marine surveying for qualified
shipwrights, which is endorsed by the B.I.A. It is important that marine
surveyors are experienced in many facets of boat construction and repair
on a professional level. It is this experience that will give them a
well-rounded understanding of maintenance, repairs, defects and their
implications. Purchasers can be scared off good boats due to overly
negative reports done by surveyors who do not have this experience. It is
also important that the surveyor has operational experience in vessels
relevant to what they are surveying.
Why do you need a survey
when purchasing a vessel? Many purchasers say, "I wish I had my boat
professionally surveyed before I bought it". Today's professional surveyor
is regularly studying to keep up with this fast moving industry both in
construction and repair techniques. This knowledge will help you to
investigate a suitable and safe vessel for your boating pleasure. It is
important that you read and understand your survey report thoroughly. If
anything is not clear ask your surveyor for more information. A survey
report is primarily to establish what faults are associated with the
vessel and how they affect it's structural integrity & safe running and
that the boat does not have major undetected problems which may risk your
safety, cost a lot of money to be rectified or even devalue the resale of
your vessel. Many insurance companies require that a vessel be surveyed
before they will insure it. Your pre-purchase survey report will be
suitable for this purpose if it has the right information for the
insurance company.
How do I find a
surveyor?
I. The Sydney Region
Boating Directory.
2. Trade a Boat
monthly magazine.
3. The Boating
Industry Association.
4. Boat brokers will
have a list of surveyors.
5. Yellow pages.
What are the costs? A
normal pre-sale inspection with a written report will cost around $15 to
$18 dollars per linear foot, calculated on the over all hull length of the
vessel. This may vary, depending on the construction method. There may be
additional travelling charges if the vessel is some distance away.
Inspecting the vessel out of the water is essential for a thorough survey
and the purchaser pays for these slipping fees in addition to the cost of
the survey. The broker can usually assist you to arrange for your
slipping.
Most marine surveyors do
a visual overview of the mechanical systems of a vessel but can also
arrange a marine mechanic or engineer to perform more thorough tests and
reports, at extra cost. Typically, these reports could include engine oil
analysis, motor diagnostics and cylinder compression testing. It may also
be necessary to do ultra sound testing on steel vessels.
Common Concerns
1. How serious is osmosis
blistering? Osmosis requires proper diagnosis. Small isolated blisters
close to the surface are easily repaired. You can easily treat them as
part of your annual maintenance program. Large and deep blisters need to
be ground out and possibly re-fibreglassed. The anti-fouling surface, the
gelcoat and tie layer may need to be removed if the problem is too
extensive. The vessel's skin then needs to be dried out and re-coated with
the appropriate systems. This treatment can be expensive and time
consuming.
2. Are gelcoat cracks
serious? The gelcoat surface of a fibreglass boat will crack under force
long before the fibreglass skin will be damaged. These cracks will however
form indicators of where stresses have been applied and show where to look
for more serious damage. It is important that moisture does not penetrate
these cracks and damage the fibreglass layer.
3. How often will I need
to anti-foul my boat? Antifouling is generally replaced on an annual
basis. This varies depending on where the vessel is moored and the quality
of the antifouling used. The new layer can be painted over the existing
layer if the surface is properly cleaned and prepared. It is important
that the new antifouling is compatible with the old. Anti fouling builds
up and tends to flake off after several years of application. At this
point, the old layers need to be removed and new coatings of antifouling
reapplied. In the interests of your own safety, this work should be
professionally done.
A GOOD SURVEYOR
WILL HELP YOU CHOOSE THE RIGHT BOAT
Always use an independent
surveyor, and always survey the boat in and out of the water. Marine
surveyors inspect the boat in your interest and the interests of your
lender and insurance company. Often your lender will designate a marine
surveyor, and brokers have lists of marine surveyors approved by lenders
and marine insurance companies.
You should also ask an
independent marine mechanic to inspect the engine.
Be there at the boat
survey.
We recommend that you
attend the survey to learn first hand what condition the boat is in. It's
the best time to ask the surveyor questions.
What to do with
your sea trial and survey results.
One big reason for the
survey is to find out the current condition and market value of the boat
you want to buy.
If the results reveal
flaws and problems, the sea trial and survey may give you the opportunity
to back out of a contract without penalty, or to negotiate repairs on the
boat.
But be advised: If you're
buying a boat at a rock bottom price, or if the seller is in distress and
is selling for below his market price, the sea trial and survey will not
give you leverage to negotiate. The seller might not have funds for
repairs and is selling as is, where is. The seller may insist that you pay
any repair costs.
Your broker usually gives
copies of the survey report to your lender and insurance carrier for their
review. They'll want to know the boat's condition, its replacement value
and the surveyor's determination of the boat's market value.
Keep in mind though,
surveys are no guarantee against hidden or undetected defects.
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The cardinal rule is get
it in writing. Your broker will outline the terms of the sale in writing
to protect your interests. That includes spelling out obligations that you
and the seller have agreed to, and when these obligations will be
fulfilled. It's a legally binding contract of each party's intentions.
What your sales agreement
and contract should contain.
A description of the
boat and engine (if it's outboard powered), including the make, model,
year, Hull Identification Number (HIN) and (outboard) engine serial
numbers. You can get the equipment list from the survey and the written
specification sheet from your broker. This should include:
The purchase price,
including any deposits you have paid and how you will pay the balance by
cashier's check, for example.
Details about when and
where the boat will be delivered and the sale finalized.
Language specifying that
the sale depends on a satisfactory survey and sea trial and your ability
to get acceptable financing and marine insurance.
A statement confirming the
boat is free of liens and encumbrances that might block the sale the
seller should also take responsibility for debts incurred during the
seller's ownership.
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How Do You Know
If The Boat is Unencumbered?
Buy a second hand boat
that has money owing on it & you could end up with the vessel being
repossessed - & you won�t get your money back. It�s the law.
A REVS check is a free
service provided by the NSW Department of Fair Trading which can tell you
over the phone, if the boat you�re thinking of buying is carrying a debt &
could be repossessed.
This is what you�ll need.
From the boat, get the registration number, hull identification number (HIN)
also known as Boat Code and the engine number(s). You can usually find the
HIN on the transom or on the stern. If you have problems finding these
numbers on the boat, just ask your dealer.
Before you call for your
REVS CHECK, make sure all the numbers you have obtained match the ones on
the registration papers.
If REVS gives the vessel
the okay, ask for a search certificate which can legally protect you
against repossession by a financier due to a previous owner�s unpaid debt.
A Search Certificate
costs only $10 & protects you, provided you purchase the boat by midnight
of the following day. However, the general information is free.
A REVS CHECK can also
tell you if the boat has been reported stolen.
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The seller pays the
commissions that a licensed yacht and ship broker earns not the buyer. But
that doesn't mean a broker works exclusively for the seller.
Brokers have a legal duty
to buyer and seller alike in every transaction. Brokers work as trustees.
They must work justly and in good conscience in the interests of both
parties. They're duty bound to act in good faith, and they must make full
and complete disclosure.
One thing brokers can't
do is guarantee the condition of the boats they're brokering. That's
another important reason to get a sea trial and survey.
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So you know the boat's
price tag and how much it'll cost to finance. But do you really know how
much your boat will cost you? Let's add it up.
Prepare for other costs.
Be sure you budget for
the less obvious costs, such as:
1. Recurring
fees such as mooring fees.
2. Slip
rental fees.
3.
Maintenance.
4. Insurance
Ask your licensed yacht
and ship broker to help you plan for these costs.
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Know how to boat safely.
Waterways provides free boating safety information and a Safe Boating
Course booklet.
www.waterways.nsw.gov.au
You should also consider
taking private lessons aboard your boat.
Q. What kinds of
boating safety classes are available?
A. You can take
courses in:
Skills and seamanship for
powerboats
Sailing and seamanship for
sailors
Basic coastal navigation
Advanced coastal piloting
Advanced coastal
navigation
Basic piloting and
seamanship
Navigation rules
Safe boat handling
Rules of the road
Navigation aids, compass
and chart use. And more.
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Transferring title
If there's already a loan
on the boat, your broker will handle paying it off for you after your
funds have gone into your broker's trust account. In some cases the new
lender will transfer the title.
Q.
Where do you put your boat?
A.
Ask your broker for help locating a suitable marina to berth your
boat.
You can also apply for a
Waterways mooring.
www.waterways.nsw.gov.au
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