Have you always dreamed of owning a boat? Have you spent years saving up and are finally ready to take the leap? If you’ve saved enough to purchase the boat outright, you may wonder: “Does it make more financial sense to buy my boat “in cash” or take out a boat loan?”
Below, we’ll discuss a few factors to consider when purchasing a boat and the pros and cons of buying in cash vs. getting a loan. We’ll also discuss how our team at Auto Loan Hub simplifies boat financing in Canada and how you can take advantage of our hassle-free process. Keep reading!
Factors to Consider When Buying a Boat
Before you decide how to purchase your boat, it’s important to consider a few key factors about your upcoming purchase. For instance, if you have your eye on a specific boat model, how much does it cost? If the model you’re looking at has a hefty price tag, this may impact whether purchasing outright is financially feasible.
Your boat’s intended use may also impact your chosen payment method, as using a loan for a business purchase may offer certain benefits. It’s also important to consider your personal long-term goals. Will purchasing your boat “with cash” impact your other financial plans, such as investments, travel goals, or retirement funds?
The Ins and Outs of Paying in Cash
Paying cash is a perfectly viable option when looking to purchase a boat. A major selling point is that you won’t have to worry about paying it off. Purchasing outright allows you to avoid monthly payments and interest charges and enjoy full ownership right away! Avoiding a boat payment will also give you more freedom with your monthly income, freeing up space in your budget for other investments, purchases, and expenses.
However, paying in full is only recommended if the money you plan to use won’t negatively impact your cash reserves for emergencies and other regular payments. If an unexpected expense arises, you’ll want to make sure you can cover it without the funds used for your boat.
The Ins and Outs of Financing
If you’re not too eager to part with a large sum of money all at once, applying for a loan or financing agreement is a good option. In addition to maintaining more of your liquid assets, making regular payments on a financing agreement can help you build up your credit. This will make you more appealing to lenders down the line if you decide to apply for a mortgage, car loan, or other financing.
However, financing will increase the timeline for gaining full ownership of your boat. Depending on the type of agreement you choose, you may be looking at anywhere from 10 to 20 years of monthly payments to cover your boat. You’ll also be incurring interest on your payments, which can result in you paying more for your boat in the long run.
What Option Is Right For You?
Whether you decide to pay for your boat in full or go through a lender ultimately comes down to what you can afford and what suits your lifestyle. If you can purchase your boat outright without incurring debt or depleting your funds, then paying cash is a viable option. However, taking out a loan or financing agreement may be more affordable for those who aren’t eager to part with a large lump sum of money.
At Auto Loan Hub, we make applying for a boat loan or financing agreement much easier than working with a traditional dealer or bank. With our easy-to-use prequalification tool, you can get pre-approved for financing within minutes. From there, our team will help you locate the perfect boat model and lender to make your dream of owning a boat a reality!
Visit our How it Works page to learn more about our hassle-free process.
