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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