You found the boat of your dreams! Congratulations! That’s exciting.
Now what?
Now you have to figure out how to pay for it! That means sifting through all the options on boat financing, checking on the best boat loan interest rates, selecting a lender, applying for a boat loan and securing the money.
If you finance your boat purchase, you must also acquire marine insurance, to cover your boat in case of accident, damage, personal liability and more. In this post, we’ll go over the checklist of insuring your new boat.
- Finding the Best Boat Loan
Once your credit has been approved, you will start to notice the differences in purchasing a boat instead of an automobile. Because recreational vehicles like boats are more of a luxury than a necessity, lenders are taking a bigger risk and so interest rates are usually higher. But the terms of boat loans are often longer than in auto loans, so the monthly payments are more affordable. Unlike automobiles and RVs, titling and tax requirements for a boat vary dramatically from state to state. Having a lender and dealer who understands the variables for your location will simplify the process and streamline your journey to the water.
Loans typically come in two basic kinds: secured and unsecured. Secured means you’ve put up some collateral to guarantee the loan, usually the boat value itself. That means if you for whatever reason stop paying the loan, the lender can repossess the boat to cover the cost of the loan. Unsecured loans, which are rarer, means there is no underlying collateral to guarantee the loan, so the interest rate and the terms tend to be higher.
At Colorado Boat Center, we’ve long worked with Priority One Financial Services, a division of Forest River Inc., a Berkshire Hathaway company and they work with the marine divisions of national lenders. In our experience, Priority One offers fast response, competitive interest rates, excellent customer service and there are no loan fees.
But if you prefer, you can work with your own bank or credit union. If you have other consumer loans, they tend to be responsive to their active customers and may offer excellent rates or extra perks to get your boat loan business.
The key to success is to have the best possible credit score and other financial resources. Talk with your Colorado Boat Center sales associate to go over your personal situation and learn the best recommendations you can take to get the best loan possible.
- Insure Your Boat
Boat insurance is not required in the state of Colorado, but we do recommend that all our customers should purchase insurance to protect their investment on a new or used boat. It just makes good sense.
There are approximately 85,000 private boats in Colorado. Annually, about 44 boats are involved in accidents, fire, vandalism, or other insurable events. The average accident in this state results in around $1,700 in damages. The most common kind of accident is fueling related fires and explosions.
Like auto insurance, marine insurance covers several different types of coverage:
- Boating liability. This insurance covers the costs if you are liable for a boating accident that causes injury or property damage to a third party. If you have to go to court, this coverage provides for attorney fees and court costs.
- Physical damage. This insurance covers the costs of damage to your boat for any accidents or incidents, including fire, heavy winds, vandalism or theft.
- Equipment. This insurance will cover any gear you may have on your boat: towing equipment, fishing gear, electronics like GPS systems or fish finders, and more.
- Uninsured or underinsured boater. Since Colorado does not require boater’s insurance, this insurance will cover damages if you should have an accident with an uninsured boater, including medical bills.
- Towing. If your boat breaks down and needs to be towed back to port, this will cover the costs.
- Fuel spills/wreckage cleanup. Local ordinances require that you clean up any fuel or other pollutant spills and that you are responsible for removing a sunk or heavily damaged boat from the water. This type of policy will cover those costs.
You can use your own insurance firm, of course, but Colorado Boat Center works with an insurance firm that ONLY insures boats and marine products. They know what boaters need for good insurance protection, they work with several different underwriters to get the best coverage at competitive rates, and their service is top-notch. Even some of our customers who are insurance agents themselves tell us how much they appreciate our vendor’s prices and professionalism.