Financing Old Boats

[linuxchiq]

I have read reports in various places by old boat owners that the difficulty of financing/insuring old boats is an old wives' tale. My partner and I recently encountered some resistance when applying for a loan for a '72 boat, in spite of the fact that it is in awesome shape, very well maintained and refitted. Can any owners of older boats recommend finance/insurance companies with which they have had good luck?

[AdriftAtSea]

You are talking about a boat that is over thirty years old.  If the boat is USCG documented and has a good survey, I don't see that you will see too much trouble getting it refinanced.  The USCG documentation actually helps quite a bit, as the USCG handles the history of the title and ensures that any liens and such are properly recorded.  Financing a USCG documented boat is generally easier IMHO. 

Insurance is generally required for any boats that are being financed, as is a comprehensive survey. The boat is generally the collateral on the loan, and the financial institution wants to make sure it has good collateral essentially.

[Captain Smollett]

Cannot comment about financing a boat, but in my case, I needed no survey to insure my boat.  Called up may agent, said "add my boat."  He asked for my HIN, my principle use of the boat and few other questions.  Less than 10 minutes and it was done.

That's full coverage, too, at the current market value of the boat.

I don't know, but maybe it is only the BOAT US type of companies requiring a survey?  Allstate did not.  A survey would have cost me about 6 years worth of premiums.   :D

[Bubba the Pirate]

Hi, LinuxChiq! 

I am humbled to _not_ be the only open source sailing person around here.   I am looking to get a boat again in the next 6 months or so.   I can't help about financing but I may be in the same 'boat' soon.   Let us know how it comes out. 

TrT
Sailorbum ;D

[Captain Smollett]

I am humbled to _not_ be the only open source sailing person around here.   

Not by a long way!   :D

There are a few Penguin Lover's on this site that I know of.  Myself included, of course.

[linuxchiq]

We have still had no luck finding a company to finance the boat. They say the banks they work with will not consider a boat this age. It is USCG documented, and we will get a complete survey, but only if there is some hope of getting financing. Can anyone recommend a specific company that will not refuse to consider a boat this age?

[AllAboutMe]

Linuxchiq,
Not knowing any more than I do about the boat, all these thoughts are only that. Thoughts.
It may be that you'll need to reassess, and select a younger boat, with less amenities, and a higher loan to retail ratio. Newer boats are easier to sell if the bank needs to get out from under.
Try getting pre approval for the amount of money you need, using a newer boat as the basis.
I'm inclined to think that banks and finance companies are more concerned with your ability to repay the loan, than they are the condition and age of the boat. Have you tried offering alternative collateral, such as home equity, or automobile titles? How about an unsecured loan? Have you asked the current owner to hold a note? How about family? Anyone that would front a loan? Where there's a will, there's a way.
I would also check the classifieds in "Good Old Boats" magazine. I seem to remember seeing a couple of finance sources for "classic yachts" .

[Oldrig]

Linuxchiq,

The advice about having a documented boat and getting it surveyed is very sound. My boat was built in 1982. It is documented. I didn't borrow any money to buy it, but the insurer still demanded a survey, not to mention a checklist from the boatyard as proof that I made almost all of the repairs and upgrades recommended by the surveyor.

As for loans, I'm afraid you've picked a tough time to get financing. Lots of companies are dropping their marine-finance lines, which limits where the banks can re-sell their loans. Some of this is a result of the heavy losses after Katrina, and a lot more of it comes from the really bad shape that the recreational boat industry is in right now.

Not enough people are buying new boats (who in his or her right mind would EVER do that?), and those are the loans that bring in profits. Used-boat financing was generally sort of an afterthought, unless you buy through a broker.

There's at least one insurance company, Heritage Marine Insurance of Mystic, CT, that advertises in GOOD OLD BOAT (1-800-959-3047), and claims to specialize in insuring older boats, but I don't know if they could help you find a lender. And, seeing that they're located in tony Mystic, they might have classic yachts in mind, not just ordinary older boats. Still, you might call them for advice. (Just a thought.)

Good luck. I wish I could give you more optimistic information.

--Joe

[AdriftAtSea]

Essex Marine Finance still does finance older boats IIRC.