Home > Buying a Boat > Financing Your Boat

Financing Your Boat

By: Thomas Muller - Updated: 18 Oct 2012 | comments*Discuss
 
Certificate Of Registry Registry Of

Before making any grand plans for a new vessel purchase it is important to first consider how the funds will be raised and what additional costs are not included in the price tag.

Ways to raise finance

For those not blessed with a bottomless bank account raising the finance necessary for a large vessel such as a cruising yacht or a motor cruiser can be an adventure in itself. Most people finance the purchase of a boat via either a marine mortgage secured on the boat, or via an un-secured loan. Mortgaging involves a charge taken over the craft, whereas an un-secured loan does not.

Other avenues to consider include seeking support from relatives or friends, raising money on a house or spreading the costs of owning a boat by sharing its ownership. This could be done with a boat enthusiast friend or as part of an official programme where a group of people have a share in a vessel maintained by a separate company.

Marine mortgages and marine loans

A marine mortgage involves a charge being made on the boat, in a similar way to a mortgage on a property. This method of payment is used when at least £10,000 in payment is required and is normally up to 90% of the boat value. It is very common request for the boat to be insured, valued and surveyed as part of the mortgage agreement. A marine loan is more appropriate for smaller investments such as small craft, boat refitting or additional equipment.

Costs and additional costs

The price of a new vessel is only a part of the total cost that the boat will soak up over its lifetime. Therefore when considering the purchase of a boat, allowances should be made for additional costs otherwise there will be no money left to take the vessel anywhere.The additional costs could include insurance, waterway licensing, maintenance bills, mooring fees the general ongoing running costs. These vary from boat to boat – for instance a small two-person dinghy is wind-powered and has very basic facilities and so will cost considerably less to run than a large motor cruiser. As a general rule the more expensive and larger the craft the greater the running costs.

Boat survey

Many marine finance companies offering marine mortgages and loans will first insist on a survey and valuation being carried out on the vessel and may even provide a list of reputable surveyors. The survey is carried out by a qualified marine surveyor and evaluates the condition and approximate value of the vessel before the purchase contract is complete. This is a wise procedure because by investing such a large amount of capital a buyer should be entitled to know exactly what they are buying. Costs of surveys begin from around £200 and rise up in accordance with the type and size of boat being purchased.

Boat Insurance and Registration

Marine financiers will also insist that the boat is insured in order to protect the buyer and their investment from damage, theft and sinking. Boat registration is also often specified by financial institutions agreeing to a marine mortgage contract. There are two main types of boat registration for all sailboats and motor boats – Full Registration and the Small Ships Register

Full registration gives the owner the title of absolute ownership and therefore provides the best protection for an investment. The Certificate of Registry is issued by the Registry of Shipping and Seamen. The Maritime & Coastguard Agency (MCA) administers the Small Ship Register, but this is not always accepted by all finance companies as full proof of ownership.Ultimately the best advice for financing a boat is that it pays to research and consider all options, to see what is on offer and to find a good deal before splashing out.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
Why not be the first to leave a comment for discussion, ask for advice or share your story...

If you'd like to ask a question one of our experts (workload permitting) or a helpful reader hopefully can help you... We also love comments and interesting stories

Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Topics
Latest Comments
  • Jake Brook
    Re: Getting a Boating Licence
    Can anyone help at all I just don't know where to start. My self an the kids have decided to buy a rib inflatable boat what do I need…
    7 August 2019
  • Kar893
    Re: Getting a Boating Licence
    We have upgraded from our inflatable canoes to Intex Excursion Inflatable Boat Set with Aluminium Oars and Pump ( 5 Person Model) The…
    2 April 2019
  • Bigun
    Re: Getting a Boating Licence
    Just got a 14 foot waverider. Do i need a licence to take her on river and lakes for a cruise and the sea for fun.
    30 October 2018
  • Bigun
    Re: Getting a Boating Licence
    Just got a 14ft wave rider. Do i need a licence to take her on the river for some fishing and the sea for same and fun ?,
    30 October 2018
  • SailingAndBoating
    Re: Getting a Boating Licence
    Simon - Your Question:Hi I have bought a 30ft cabin cruiser for the sea do I need a skippers licence or any licence to use at sea…
    31 July 2018
  • Simon
    Re: Getting a Boating Licence
    Hi I have bought a 30ft cabin cruiser for the sea do I need a skippers licence or any licence to use at sea cheers
    30 July 2018
  • KITTYPOP
    Re: Getting a Boating Licence
    I would like to ask, if one has Dutch Citizenship, (Netherlands), do I need a permit for the Thames? Freedom of water Dutch rule/law.…
    23 May 2018
  • SailingAndBoating
    Re: Getting a Boating Licence
    Nelly - Your Question:Looking at buying a boat but just would like to no how much a boat license is, insurance, docking fees is?
    22 May 2018
  • Nelly
    Re: Getting a Boating Licence
    Looking at buying a boat but just would like to no how much a boat license is, insurance, docking fees is?
    15 May 2018
  • Wilson
    Re: Getting a Boating Licence
    Hi, I bought a inflatable boat 5.9m to do sea fishing as I’m new in to this what steps/ accessories it’s required by the law to go out…
    10 May 2018