Articles

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 Boat Finance

Hi, Find That Finance here, your friendly and reliable Australian asset finance broker. Today, I’m going to talk to you about finance for boats, boat trailers, and tow vehicles. If you’re thinking of buying a boat or upgrading your existing one, you might be wondering how to finance your purchase and what options are available. You might also be curious about the requirements and ratings for boat trailers and tow vehicles, and how to choose the right combination for your needs. Well, don’t worry, I’ve got you covered. In this article, I’ll explain everything you need to know about boat finance, trailer types and features, and tow vehicle specifications. I’ll also share some tips and tricks on how to get the best deal on your boat loan and save money in the long run. So, let’s get started!

Boat Finance 101

Boat finance is a type of personal loan that you can use to buy a boat or other marine vessel. Most lenders in Australia will offer some kind of finance for boats, whether it’s a secured or unsecured loan, a fixed or variable rate loan, or a balloon or residual payment loan. Here are some of the main features and differences of these loan types:

• Secured vs Unsecured Loans: A secured loan is one where you use the boat as collateral for the loan, meaning that the lender can repossess the boat if you default on your repayments. A secured loan usually has a lower interest rate and a higher borrowing limit than an unsecured loan, but it also comes with more fees and charges. An unsecured loan is one where you don’t have to provide any security for the loan, meaning that the lender can’t take your boat if you fail to pay back the loan. An unsecured loan usually has a higher interest rate and a lower borrowing limit than a secured loan, but it also has fewer fees and charges.
• Fixed vs Variable Rate Loans: A fixed rate loan is one where the interest rate stays the same for the entire term of the loan, meaning that your repayments are predictable and consistent. A fixed rate loan usually has a higher interest rate than a variable rate loan, but it also protects you from interest rate fluctuations. A variable rate loan is one where the interest rate changes according to the market conditions, meaning that your repayments can go up or down depending on the interest rate movements. A variable rate loan usually has a lower interest rate than a fixed rate loan, but it also exposes you to interest rate risk.
• Balloon vs Residual Payment Loans: A balloon payment loan is one where you pay a large lump sum at the end of the loan term, which reduces your regular repayments throughout the term. A balloon payment loan usually has a lower interest rate than a residual payment loan, but it also requires you to have enough funds to pay off the balloon amount at the end of the term. A residual payment loan is one where you pay a smaller lump sum at the end of the loan term, which increases your regular repayments throughout the term. A residual payment loan usually has a higher interest rate than a balloon payment loan, but it also allows you to refinance or trade in your boat at the end of the term.

So, how do you choose the right type of boat finance for your situation? Well, it depends on several factors, such as:

• Your budget: How much can you afford to borrow and repay? How much do you have saved up for a deposit or a balloon/residual payment? How stable is your income and expenses?
• Your preferences: Do you prefer lower or higher repayments? Do you prefer certainty or flexibility? Do you plan to keep or sell your boat at the end of the term?
• Your credit history: How good is your credit score and history? Do you have any defaults or bankruptcies on your record? How likely are you to get approved for a loan?

To help you decide on the best type of boat finance for your needs, you can use our Free Loan Eligibility Assessment service. We’ll ask you some simple questions about your personal and financial situation, and then we’ll match you with suitable lenders and products from our panel of multiple lenders. We’ll also give you an estimate of how much you can borrow and what your repayments will be. At this stage there will be no impact on your credit file. How to Finance Your Dream Boat: The Ultimate Guide to Boat Loans and Budgeting

Boat Trailer Types and Features

Once you’ve sorted out your boat finance, you’ll need to think about how to transport your boat from land to water and back again. That’s where boat trailers come in handy. Boat trailers are devices that attach to your tow vehicle and allow you to carry your boat on wheels. Boat trailers come in different shapes and sizes, depending on the type and size of your boat. The main types of boat trailers are:

• Bunk Trailers: Bunk trailers have boards covered in fabric that support the keel and sides of the boat’s hull. Bunk trailers are simple and cheap, but they also require more water depth to launch and retrieve the boat. Bunk trailers are suitable for smaller boats under 6 metres long, and for boats with flat or V-shaped hulls.
• Roller Trailers: Roller trailers have rollers that help the boat slide on and off the trailer. Roller trailers are easy and quick to launch and retrieve the boat, even in shallow water. Roller trailers are suitable for larger boats over 6 metres long, and for boats with curved or stepped hulls.
• Float-On Trailers: Float-on trailers allow the boat to float on and off the trailer in the water. Float-on trailers are ideal for very large boats that are too heavy to lift or slide. Float-on trailers require a lot of water depth and a steep ramp to launch and retrieve the boat. Float-on trailers are suitable for boats over 8 metres long, and for boats with deep or multi-hull designs.

When choosing a boat trailer, you need to consider the following factors:

• The weight and dimensions of your boat: Your boat trailer must be able to support the weight and size of your boat, without exceeding the trailer’s maximum capacity. You can find the weight and dimensions of your boat on the manufacturer’s plate or manual, or you can weigh and measure it yourself. You also need to make sure that your boat trailer complies with the legal requirements for width, length, height, and overhang.
• The type and features of your boat: Your boat trailer must be compatible with the shape and design of your boat, without causing any damage or instability. You also need to consider any special features or accessories that your boat has, such as outboard motors, keels, rudders, masts, or canopies. You may need to adjust or remove some of these features before loading or unloading your boat on the trailer.
• The type and rating of your tow vehicle: Your tow vehicle must be able to tow the combined weight of your boat and trailer, without exceeding the vehicle’s maximum towing capacity. You can find the towing capacity of your vehicle on the manufacturer’s plate or manual, or you can check it online. You also need to make sure that your tow vehicle has a suitable hitch, wiring, brakes, mirrors, and lights to connect and control your boat trailer safely.

To help you choose the right boat trailer for your needs, you can use our Free Pre-Approval for Finance Assurance service. We’ll pre-approve you for a loan amount based on your boat finance application, and then we’ll help you find a suitable boat trailer from our network of trusted dealers. We’ll also arrange for the delivery and installation of your boat trailer at your convenience.

Tow Vehicle Specifications

Finally, you’ll need to think about how to drive your tow vehicle with your boat trailer attached. Towing a boat trailer is not the same as driving a normal car. It requires more skill, attention, and caution. It also requires more knowledge of the rules and regulations that apply to towing in Australia. Here are some of the main things you need to know about tow vehicle specifications:

• Tow Rating: The tow rating is the maximum towing capacity that your tow vehicle can safely handle. It is based on several factors, such as vehicle structure, chassis, engine, hitch, and tires. You can find the tow rating of different vehicles by year, make, model, trim, and engine in a table online. You should never exceed the tow rating of your vehicle or the trailer you are towing.
• Ball Load: The ball load is the amount of weight that the fully laden trailer imposes (vertically) on the tow bar of the tow vehicle. The ball load affects the stability and handling of your tow vehicle and trailer combination. The ball load should be between 5% and 15% of the trailer’s aggregate trailer mass (ATM), depending on the type of trailer and vehicle. You can measure the ball load with special scales or at a weighbridge.
• Gross Combination Mass (GCM): The GCM is the maximum combined weight of your tow vehicle and trailer when they are fully loaded. The GCM should not exceed the limit specified by the vehicle manufacturer or by law. You can calculate the GCM by adding up the gross vehicle mass (GVM) of your tow vehicle and the ATM of your trailer.
• Gross Trailer Mass (GTM): The GTM is the weight of the fully loaded trailer imposed on the trailer’s axle when it is coupled to the tow vehicle. The GTM is always less than the ATM because some of the trailer weight is transferred to the tow vehicle when they are connected. The GTM should not exceed the limit specified by the trailer manufacturer or by law.
• Aggregate Trailer Mass (ATM): The ATM is the combined weight of the trailer and its full load when it is not coupled to a tow vehicle. The ATM is usually shown on a plate attached to the trailer by the manufacturer. The ATM should not exceed the limit specified by law.

Alright, let’s continue with the article. Here are some more topics that I’ll cover:

How to Choose the Right Tow Vehicle for Your Boat and Trailer

Choosing the right tow vehicle for your boat and trailer is not just a matter of personal preference or style. It’s also a matter of safety, performance, and efficiency. You want a tow vehicle that can handle the weight and size of your boat and trailer, without compromising on power, stability, or fuel economy. You also want a tow vehicle that meets the legal requirements for towing in Australia, such as having a suitable driver’s licence, registration, insurance, and roadworthy certificate. Here are some of the main factors that you need to consider when choosing a tow vehicle for your boat and trailer:

• Engine Size and Power: The engine size and power of your tow vehicle determine how much torque and horsepower it can produce to pull your boat and trailer. The bigger and heavier your boat and trailer are, the more engine size and power you’ll need. Generally speaking, you’ll want a tow vehicle with at least a V6 engine, or preferably a V8 or diesel engine, to tow a large boat and trailer. You’ll also want to check the engine’s maximum torque output and towing capacity, which are usually indicated on the vehicle’s specifications sheet or manual.
• Transmission Type: The transmission type of your tow vehicle affects how smoothly and efficiently it can transfer the engine power to the wheels. The main types of transmission are manual, automatic, and continuously variable transmission (CVT). Manual transmission gives you more control over the gear shifting, but it also requires more skill and attention to drive. Automatic transmission does the gear shifting for you, but it also consumes more fuel and may overheat when towing. CVT adjusts the gear ratio automatically according to the driving conditions, but it also may cause more noise and vibration when towing. You’ll want to choose a transmission type that suits your driving style and comfort level.
• Drive Type: The drive type of your tow vehicle determines how the power is distributed to the wheels. The main types of drive are rear-wheel drive (RWD), front-wheel drive (FWD), four-wheel drive (4WD), and all-wheel drive (AWD). RWD sends the power to the rear wheels only, which gives you more traction and stability when towing, but it also makes the vehicle more prone to oversteer and fishtailing. FWD sends the power to the front wheels only, which gives you more maneuverability and fuel efficiency when driving, but it also makes the vehicle more prone to understeer and loss of traction when towing. 4WD sends the power to all four wheels equally, which gives you more grip and control on rough or slippery terrain, but it also consumes more fuel and may damage the drivetrain if used on normal roads. AWD sends the power to all four wheels variably, depending on the driving conditions, which gives you the best of both worlds, but it also adds more weight and complexity to the vehicle. You’ll want to choose a drive type that matches your driving environment and needs.
• Suspension Type: The suspension type of your tow vehicle affects how well it can absorb the shocks and bumps on the road. The main types of suspension are leaf spring, coil spring, air spring, and independent suspension. Leaf spring suspension uses metal strips that bend under load to support the vehicle’s weight. Coil spring suspension uses metal coils that compress under load to support the vehicle’s weight. Air spring suspension uses air bags that inflate or deflate under load to support the vehicle’s weight. Independent suspension allows each wheel to move independently from each other, which improves handling and comfort. You’ll want to choose a suspension type that provides enough support and cushioning for your boat and trailer, without compromising on handling or performance.

To help you choose the right tow vehicle for your boat and trailer, you can use our [Secured and Unsecured Loans] service. We’ll offer you competitive interest rates and flexible repayment terms for both secured and unsecured loans from our panel of multiple lenders. We’ll also help you compare different models and features of tow vehicles from our network of trusted dealers.

How to Save Money on Your Boat Loan

Now that you’ve learned how to choose the right boat finance, boat trailer, and tow vehicle for your needs, you might be wondering how to save money on your boat loan in the long run. After all, buying a boat is not a cheap investment, and you don’t want to pay more than you have to in interest, fees, or charges. A Beginner's Guide to Boat Financing: Different Options and How to Get the Best Deal.

Here are some of the best ways to save money on your boat loan:

• Shop around: Don’t settle for the first loan offer that you get from your bank or dealer. Think finance Broker like find That finance who can compare different lenders and products from our multiple lenders].. Look for lower interest rates, fewer fees, better features, and more flexibility.
• Pay a larger deposit: The more money you put down as a deposit, the less money you’ll have to borrow and repay. This will reduce your loan amount, interest charges, and loan term. Aim to pay at least 20% of the boat’s purchase price as a deposit, if you can afford it.
• Make extra repayments: The more frequently and regularly you make repayments, the faster you’ll pay off your loan and the less interest you’ll pay. Try to make weekly or fortnightly repayments instead of monthly repayments, and pay more than the minimum amount whenever you can. Just make sure that your loan doesn’t have any early repayment fees or penalties.
• Refinance your loan: If you find a better loan deal elsewhere, or if your financial situation changes, you may want to refinance your loan to get a lower interest rate, a shorter loan term, or more flexible features. However, be aware that refinancing may also involve some fees and charges, so weigh up the pros and cons before you decide.
• Use a balloon or residual payment: If you want to lower your regular repayments and free up some cash flow, you may want to use a balloon or residual payment option for your loan. This means that you’ll pay a large lump sum at the end of the loan term, which will reduce your regular repayments throughout the term. However, be careful that you don’t end up paying more interest overall, and that you have enough funds to pay off the balloon or residual amount when it’s due.

To help you save money on your boat loan, you can use our [Boat Loans] service. We’ll provide you with tailored information and guidance on how to manage your boat loan effectively and efficiently. We’ll also help you with any issues or questions that you may have along the way.

We have generated a table that demonstrates the overall total loan cost in repayment and interest terms for a $30,000 boat loan over 60 months compared to 48 months and 84 months. To do this, I will use an interest rate of 7.5%. We will also assume that the borrow amount includes the boat purchase price and any fees associated with establishing the loan and that there are no on-going monthly fees or charges involved in the loan, and that the repayments are made monthly. Here is the table that we created:

Loan Term	Monthly Repayment	Total Repayment	Total Interest
48 months	$724.03	$34,753.44	$4,753.44
60 months	$599.55	$35,973.00	$5,973.00
84 months	$467.62	$39,279.08	$9,279.08

As you can see from the table, the longer the loan term, the lower the monthly repayment, but the higher the total repayment and interest. For example, if you choose a 60-month loan term instead of a 48-month loan term, you will save $124.48 per month, but you will pay $1,219.56 more in total and interest. Similarly, if you choose an 84-month loan term instead of a 60-month loan term, you will save $131.93 per month, but you will pay $3,306.08 more in total and interest. This is just a hypotetical worked example and is not an offer of finance.

Therefore, if you want to save money on your boat loan in the long run, you should choose the shortest loan term that you can afford to repay comfortably. However, if you want to lower your monthly repayments and free up some cash flow, you may want to choose a longer loan term or use a balloon or residual payment option.

You can use our Boat Loan Calculator to compare different loan terms and options and see how they affect your repayments and interest.  Remember the interest rate on it's own is not the most important part of a loan so don't fall for the interest rate trap!

Phone: 1300 378 021 Email: [email protected] Apply Now:

 

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Frequently Asked Questions

Q: What is the difference between a secured and an unsecured loan?

A: A secured loan is one where you use the boat as collateral for the loan, meaning that the lender can repossess the boat if you default on your repayments. A secured loan usually has a lower interest rate and a higher borrowing limit than an unsecured loan, but it also comes with more fees and charges. An unsecured loan is one where you don’t have to provide any security for the loan, meaning that the lender can’t take your boat if you fail to pay back the loan. An unsecured loan usually has a higher interest rate and a lower borrowing limit than a secured loan, but it also has fewer fees and charges.

Q: What is the difference between a fixed and a variable rate loan?

A: A fixed rate loan is one where the interest rate stays the same for the entire term of the loan, meaning that your repayments are predictable and consistent. A fixed rate loan usually has a higher interest rate than a variable rate loan, but it also protects you from interest rate fluctuations. A variable rate loan is one where the interest rate changes according to the market conditions, meaning that your repayments can go up or down depending on the interest rate movements. A variable rate loan usually has a lower interest rate than a fixed rate loan, but it also exposes you to interest rate risk.

Q: What is the difference between a balloon and a residual payment loan?

A: A balloon payment loan is one where you pay a large lump sum at the end of the loan term, which reduces your regular repayments throughout the term. A balloon payment loan usually has a lower interest rate than a residual payment loan, but it also requires you to have enough funds to pay off the balloon amount at the end of the term. A residual payment loan is one where you pay a smaller lump sum at the end of the loan term, which increases your regular repayments throughout the term. A residual payment loan usually has a higher interest rate than a balloon payment loan, but it also allows you to refinance or trade in your boat at the end of the term.

Q: How can I find out how much I can borrow and what my repayments will be?

A: You can use our Free Loan Eligibility Assessment service to find out how much you can borrow and what your repayments will be. We’ll ask you some simple questions about your personal and financial situation, and then we’ll match you with suitable lenders and products from our panel of multiple lenders. We’ll also give you an estimate of how much you can borrow and what your repayments will be.

Q: How can I find a suitable boat trailer for my boat?

A: You can use our Free Pre-Approval for Finance Assurance service to find a suitable boat trailer for your boat. We’ll pre-approve you for a loan amount based on your boat finance application, and then we’ll help you find a suitable boat trailer from our network of trusted dealers. We’ll also arrange for the delivery and installation of your boat trailer at your convenience.

Q: How can I choose the right tow vehicle for my boat and trailer?

A: You need to consider several factors when choosing the right tow vehicle for your boat and trailer, such as engine size and power, transmission type, drive type, suspension type, tow rating, ball load, gross combination mass (GCM), gross trailer mass (GTM), and aggregate trailer mass (ATM). You can find more information about these factors in our article above. 

Q: How can I save money on my boat loan?

A: You can save money on your boat loan by shopping around for different lenders and products, paying a larger deposit, making extra repayments, refinancing your loan, or using a balloon or residual payment option. You can find more tips and tricks on how to save money on your boat loan in our article above. You can also use our Boat Loans service to get tailored information and guidance on how to manage your boat loan effectively and efficiently.

Q: How can I contact Find That Finance?

A: You can contact us by phone, email, or online form. Our contact details are:

Phone: 1300 378 021 Email: [email protected] Apply Now:

We’re looking forward to hearing from you soon!

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