What's true of real estate in 2009 is also true of the boating world: It's a buyer's market. So if you've always wanted to hit the open water but didn't think you could afford it, now may be the right time to reconsider. Prices on new boats dropped steeply in the past year as used boats flooded the market, so start your search at a boat show or local dealer, where you can find surprisingly good deals on new models. For instance, Chaparral Boats, a subsidiary of Marine Products ( MPX), is running a "Wow Now" sales event with cash rebates and free extended engine warranties. Marine retailers like MarineMax ( HZO) can help you choose and finance the right boat. By cruising shows and dealers, you can get a firsthand look at different models and ask questions about them. If the price on a new boat is too steep, look around for a second-hand version. Dealers often sell used boats, too. They may charge a premium, but it might be worth it if they have a repair shop that will provide servicing before your purchase. Moreover, dealers often sell used boats with active warranties. You'll likely find the cheapest prices on boats through online classifieds or in listings at the back of boating publications. Also consider checking out auctions on boats that have been repossessed. All the recent economic troubles have left boat repossession companies very busy, which could lead to a great deal for you. Before you buy: Don't rush into a purchase until you've taken a few steps to make sure the boat is in an acceptable condition.
First, determine whether the price is reasonable by checking a price guide for used boats. The most popular is called the BUC Used Boat Price Guide, which you can find online or at most boating shops. A boat's condition is extremely important in determining its value. The BUC book tells you the rough value of a boat with average equipment and requiring no additional work before sale, but you need to determine whether the boat you're thinking of buying is above or below that standard. Most boats require significant care and maintenance, and a boat that seems especially cheap is probably one that has been neglected. Take a quick visual survey of the boat, looking for nicks and dents, water lines inside the boat that indicate flooding or other signs of potential problems. If all looks good, bring in a professional to perform a marine survey of the boat, which usually costs between $10 and $20 per linear foot. The surveyor should inform you of any serious defects in the boat's structure and mechanics. Also, take the boat for a test ride, checking for any performance issues. If problems turn up, try to negotiate a better deal or look for another boat. Making the deal: Chances are you don't have the cash flow to pay for a boat in full. But if you can manage a 15% to 20% down payment and have a decent credit rating, getting a boat loan should be easy. Boat loans are usually simple interest loans that extend up to 15 years. The credit markets are tight, so don't expect lenders to be flexible if you don't meet their standards. Some lenders require that your boat is insured. If you're buying from a dealer or broker, they can probably coordinate a loan. Otherwise, look online for a marine-lending firm like Just Boat Loans. Lastly, take one final opportunity to reflect on whether you're really prepared for the responsibilities of boat ownership, including regular maintenance and payment of expenses such as slip-rental fees. If buying a boat still seems like the right thing to do, sign off on the deal and hit the water.