Marine vehicles and boats are the perfect choice for those who love the adventure and thrill of exploring the waters. Marine vehicles and boats offer you convenience, comfort, and fun, as well as a wide range of options to match your preferences and needs. You can choose from different types, sizes, and features of marine vehicles and boats, depending on your budget and lifestyle.
However, buying marine vehicles or boats is not a simple affair. The upfront cost of a new or used marine vehicle can be quite high, and you also have to consider the depreciation, maintenance, and insurance costs that come with owning such a valuable asset. That’s why many people opt for financing their marine vehicles and boats instead of paying cash.
But how do you finance a marine vehicle in the UK? What are the different options available, and how do they compare? How do you find the best deal for your needs and circumstances? And what are the popular types of boats that you can buy on finance?
The Different Finance Options Available for Marine Vehicles and Boats
If you want to buy a boat or a yacht in the UK, you have several finance options to choose from. Each option has its features, advantages, and disadvantages. Depending on your personal and financial circumstances, you can choose the one that suits you best:
Marine Finance
Marine finance is a form of leasing, where you pay a monthly fee to use the boat or yacht, but you do not own it. The monthly fee is based on the depreciation of the marine vehicle over the lease term, and the residual value at the end of the lease. The residual value is the estimated value of the marine vehicle at the end of the lease, which is agreed upon at the start of the contract.
The advantage of marine finance is that you can enjoy sailing a new marine boat without having to pay the full purchase price upfront. You also have lower monthly payments than other finance options, as you are only paying for the depreciation of the marine vehicle and boat.
Marine finance is similar to asset finance, which is a general term for leasing any kind of asset, such as vehicles, machinery, or equipment
At the end of the lease, you have three options, you can either:
- Buy the boat for the residual value
- Sell it to a third party and pay the difference between the sale price and the residual value
- Extend the lease for another term.
Boat Loan
A boat loan is a form of credit, where you pay a deposit and then monthly instalments to buy the boat over a fixed period. The monthly instalments include both the principal and the interest, and the interest rate is usually fixed. The boat is the security for the loan, which means that if you fail to make the payments, the lender can repossess it. This is similar to hire purchase, which is a type of asset finance that allows you to own the asset at the end of the contract, after paying a final option to purchase fee.
The advantage of boat loan is that you can own the boat at the end of the contract, and you can choose the deposit and the duration of the contract to suit your budget. You also have the option to settle the loan early, by paying the outstanding balance and a small fee. The disadvantage is that you have to pay interest on the loan, and you do not own the boat until you make the final payment.
Boat loans and marine finance may have some differences from hire purchase and asset finance, such as:
- The interest rate may vary depending on the type and age of the marine and boat, the loan amount, the deposit, and the credit history of the borrower.
- The lender may require a marine survey, valuation, and insurance of the marine and boat before approving the finance.
- The lender may have a lien or charge over the vehicle as security for the loan, which means that they can repossess it if the borrower defaults on the payments.
- The borrower may have to register the boat with the relevant authorities and comply with maritime laws and regulations.
Hire Purchase with Balloon Payment
Hire purchase with balloon payment is similar to a boat loan, but with a twist. Instead of paying equal monthly instalments, you pay lower monthly instalments and a larger final payment, known as the balloon payment. The balloon payment is usually 25% to 50% of the purchase price of the vehicle, and it is agreed upon at the start of the contract.
The advantage of hire purchase with balloon payment is that you can have lower monthly payments than a boat loan, and still own the boat at the end of the contract. You also have the option to refinance the balloon payment or trade in the marine and boat for a new one.
Contract Purchase
Contract purchase is a leasing option, where you pay a deposit and monthly instalments, based on the depreciation and the residual value of the marine vehicle or boat. You do not own the marine and boat, but you can buy it for the residual value, return it, or part-exchange it at the end of the contract.
Contract purchase has lower monthly payments and less upfront cost than other finance options, but no equity and possible extra charges for exceeding usage limit, or any damage or wear and tear.
At the end of the contract, you have three options. You can either buy the vehicle for the residual value, return it to the lender and walk away, or part-exchange it for a new one or use any equity as a deposit.
Personal Contract Purchase (PCP)
PCP is a flexible leasing option, where you pay an initial payment and lower monthly instalments, based on the depreciation and the residual value of the marine vehicle or boat. You can own, return, or part-exchange the boat at the end of the contract, by paying, avoiding, or using the residual value as a deposit. PCP has lower monthly payments and more options than contract purchase, but higher interest and a large final payment.
Popular Models of Marine Vehicles and Boats You Can Buy on Finance
Now that you have an idea of the different ways to finance a marine vehicle, you might be wondering what types of boats you can buy on finance. The good news is that you can find almost any model of marine vehicle on finance, as long as it is within your budget and meets the lender’s criteria. However, some models are more popular and available than others, depending on the demand, supply, and market trends. Here’s a brief overview:
Additional Costs of Owning a Marine Vehicle
Owning a boat or marine vehicle of any kind can be a significant financial commitment, so you should carefully plan your budget and compare the different finance options available. You should also consult with a professional marine vehicle or boat broker, who can help you find the best marine vehicle or boat for your needs and negotiate the best deal for you.
At Clifton Private Finance we can help. With over 20 years of experience and access to exclusive lenders and rates, we’ll offer you expert advice, tailored solutions, and a hassle-free service. Contact them today and get your dream marine vehicle or boat on finance.
Besides the purchase price and the finance cost, you should also consider the costs of owning and operating a marine vehicle or boat, which can vary depending on the size, type, and condition of the marine vehicle or boat. Some of the main costs include:
- Mooring fees: You have to pay these fees to dock your marine vehicle or boat at a marina or harbour. They can range from £100 to £10,000 per month, depending on the location, facilities, and availability.
- Maintenance fees: To keep your marine vehicle or boat in good shape and working order, you need to pay these fees. They can include cleaning, painting, servicing, repairing, and replacing parts. They can range from 10% to 15% of the purchase price per year.
- Insurance fees: These fees protect your marine vehicle or boat from damage, theft, or liability. They can depend on the value, age, and usage of the marine vehicle or boat, as well as the coverage and deductible you choose. They can range from 1% to 4% of the purchase price per year. In the UK, it is not required to get an insurance plan for your boat, but it is highly recommended.
- Fuel fees: These fees power your marine vehicle or boat, whether it is petrol, diesel, or electricity. They can depend on the size, speed, and efficiency of the marine vehicle or boat, as well as the distance and duration of your trips. They can range from £50 to £5,000 per trip.
- Crew fees: These fees cover the hiring and managing of the crew for your marine vehicle or boat, such as the captain, engineer, chef, and steward. They can depend on the number, qualification, and experience of the crew, as well as the tips and benefits you provide. They can range from £20,000 to £200,000 per year. However, not all marine vehicles or boats require a crew, especially if they are smaller or simpler to operate.
- Wintering and dry dock fees: These fees cover the storage and protection of your marine vehicle or boat during the off-season, when you are not using it. They can include lifting, cleaning, antifouling, and covering the marine vehicle or boat. They can range from £500 to £5,000 per year, depending on the size and type of the marine vehicle or boat.
- Survey fees: These fees cover the inspection and valuation of your marine vehicle or boat by a qualified surveyor, usually before buying or selling it. They can also include testing, sampling, and reporting on the condition and performance of the marine vehicle or boat. They can range from £200 to £2,000 per survey, depending on the size and type of the marine vehicle or boat.
If you are interested in buying a yacht, which is a luxury marine vehicle or boat, you should be aware that the costs are usually much higher than for other marine vehicles or boats.
For example, a yacht can cost from £200,000 to £30,000,000 to buy, and from £1,500 to £200,000 per month to moor. A yacht also requires more maintenance, insurance, fuel, and crew than other marine vehicles or boats. You can take a look at our yacht finance page to learn more.
What Happens at the End of a Marine Finance Plan?
Marine finance is a type of finance that allows you to use the marine and boat as an asset for your business or leisure while paying a fixed monthly fee to the lender. You can either a finance lease or an operating lease, depending on whether you want to own the marine and boat at the end of the term or return it to the lender.
At the end of a marine finance plan, you have different options depending on the type of lease you have chosen. Here are the possible scenarios:
- If you have a finance lease, you can either pay a nominal fee to the lender and own the vehicle, sell the boat to a third party and keep most of the proceeds, or extend the lease for another term at a reduced rate.
- If you have an operating lease, you can either return the vehicle to the lender and pay any excess usage or damage charges, buy the boat from the lender at an agreed price, or swap it for a new one and start a new lease.
The option that you choose will depend on your preferences and circumstances. For example, if you want to own the boat at the end of the term, you might prefer a finance lease. You might prefer an operating lease if you want a newer and more efficient marine vehicle.
Using a Finance Broker to Help
Using a Finance Broker to Help If you are interested in financing a marine vehicle or boat in the UK, you might want to consider using a finance broker to help you with the process.
A finance broker can help you find the best marine vehicle or boat finance option for your needs and budget, as well as negotiate the best deal with the lender. A finance broker can also advise you on the different types of marine vehicle or boat finance available for buying a marine vehicle or boat, such as flexible terms, low deposits, and bespoke solutions.
At Clifton Private Finance, we have a team of specialist finance brokers who can help you finance a marine vehicle or boat in the UK. We can work with marine vehicle or boat manufacturers and dealers to arrange your marine vehicle or boat finance plan and finalise your purchase. We can also help you finance new, used, or auction-bought marine vehicles and boats, and offer the most competitive marine vehicle or boat finance service for you.
To find out more about our finance broker service, don’t hesitate to contact us today.
We offer a free and no-obligation telephone consultation at a time that suits you.