How to pay for a repower/refit

For you guys that have gone through big re-powers or refits, how have you paid for them? Bank loans, credit cards, home equity loans, lots of cash in hand...? I am going to start putting some money aside for some big projects id like to do to the boat next winter and am curious how everyone has paid for the big expenditures.

 

In 2005 when I did my repower I was able to refinance my boat and with the upgrades believe it or not had equity in my boat and the bank was able to lend me the money for the job. It worked out for me because my original loan had a much higher rate and with the rate adjustment my payment was lower after the repower.
Not sure if this is possible now with tighter lending rules. I would try to use a banks money rather than cash on hand. Just my opinion.

 

IMO:

if you are using the boat "commercially" then consider financing with a lending institution or if you have one a home equity line of credit.
Why? You have a "partner" in the interest expense and the ability to "write the interest off......Who is the partner? .......good old Uncle Sam.

NEVER use a credit card for borrowing AND carrying balances. Credit card companies get legal "loan shark rates" @ 14%-19%.

If the boat is used for "pleasure"...put off any major costs until you have the cash. Why?? NEVER be a "slave" to a lending institution unless the borrowing is for a home to live in.

FWIW,

Bill D

 

Cash for 90% of it. When that ran out I begged my daddy! Pathetic but true.

 

Gotta agree with BILLD. If you're recreational use cash. No loans for this type of expense IMO.

 

That's not pathetic, 90% cash is better than most and the interest daddy could get from you is better than what the bank would pay him. I agree with some of the others, if it's a pleasure boat, I would be real careful bringing on more debt, although rates are low. I guess it depends on what your priorities are, but for something recreational/pleasure, I would not go in debt; if it's a business opportunity and how you make your living, then I would cautiously go in debt while still using as much cash as possible.

 

Interest? He's my father! Lol. He was paid back quickly.

I think it all depends on your situation. I see no problem with borrowing money to buy a boat if it's not putting you in a situation where it's a burden. Most people finance a new car when they could go out and buy a good used one for cash. If you can get a nice big boat for say $500 a month or buy a smaller one for cash and not be as happy I say go for it as long as the $500 isn't going to break the bank. Like I said it depends on your situation, if it's going to be tight on the wallet think before you act. My next build will most likely have a small note.

 

Interest at the bank is what, 0.05%? So if you paid him 0.5% interest, he's money ahead .

 

True, buy him a beer, he's still ahead.

Unfortunately, in today's day and age, if a child repays their parents AT ALL, they are ahead .

I remember when my sister was a teenager, she asked my dad... "dad, can I borrow $20?". This went on for a couple of months. At one of those requests, my father pulled a $20 out of his wallet and said "borrowing implies that you will pay me back, do you want to borrow $20, or do you want me to give you $20?". My sister immediately snatched the $20 out of his had and said "give me the $20".

Lesson learned

 

Budgeting....
Went to college for accounting got my degree, now i sell fishing tackle and charter the boat

knew a refit was coming, so i planned and put it into the budget.

If the engine or tranny blew up, i may not have been able to plan accordingly.

 

Lol my father in law "borrows" money once a month or so. Never seen a dime back. He's a good guy and great to my wife and kids so it's all good, he just never had the best financial luck in life.

 

The easiest way was what i did, you wait for some fool to put 80K in a repower, then go broke and put the boat up forsale. Then YOU come in and snatch it as a really really really low price.

 

ya that's seem to happen some doesn't it that is a good rule of tumb, if the boat is making you money than a note may be necessary keep it as small as possible and pay extra on the note even if its just a few dollars. we paid our business and our house off by following that method. boat purchases we pay cash and get the boat we can pay cash for.[our boats are pleasure boats]
that's why in a pleasure boat you may be better off with a gas engine no matter how i work the numbers on a 28 footer or less, any way you can buy alot of gas for the price differance and a repower is much cheaper. That being said part of me still wants a diesel boat.

 

It's the sounds and the smell! :lol:

 

And the safety, easier to resell, maintain its value better, the turbo whine, the economy, not loading your boat up with a potential bomb, carry less fuel and go the same distance, stuff like that.

Guitarman- On a new build, how much less is the gasoline engine/trans package than say a 225 - 275 hp diesel? My dad was thinking of building a 34' aluminum bowpicker and the cost for twin Volvo D4 Duoprops (225hp each) versus twin Volvo 5.7 liter's Duoprops (300hp each) was about $10,000 per engine/duoprop package. He figured the fuel savings, plus the safety factor, plus the much higher resale value and more appeal at resale, would make going with the diesels a no-brainer.

What gasoline engine available has the power to push a 28' downeast a respectable speed? Can you purchase a new big block and put it in a new boat? I thought the biggest new gassers available for inboards were 6.0's, at least that's the biggest Crusader offers. I don't think a 6.0 gas is going to push a 28' Downeast very well when its loaded with fuel, food, crew, and gear.

 

mercruiser 8.2 and crusader 8.1 Captains

 

Anyone compared the price of one of these with say a D4 300hp?

 

i can tell you the maintenance on the two is MUCH cheaper then a volvo anything

 

8.2 merc bobtail only 16K

 

D4 bobtail 300hp 22K