2012 is the Year of The Boat Buying Trifecta: Low Interest Rates – High Canadian Dollar – Low Global Boat Prices

We think that the 2012 will be the year of the boat buying trifecta; we have record low interest rates, a high Canadian dollar, and low global boat prices making the yacht of your dreams more affordable and closer to reality than we ever remember before.

With rapidly escalating numbers of Canadians reaching retirement age, many of whom are already smart enough to have realized this opportunity, the Canadian boat market is alive and well while markets in most other countries are stagnant or down.

To get a read on the situation and to make sure that our take on it was right, we interviewed some specialists in marine finance. In particular, we spoke to Gary Prichard, Regional Sales Manager for RBC Financial and Will Walker, president of Walker Financial and videotaped the discussions at the 2012 Toronto International Boat Show where an encouraging number of people were sitting down and writing deals on new boats.

We asked Will if new boats were selling and he told us, “Opening weekend of the Toronto International Boat Show 2012 was ahead of the sales level from 2011 and that’s a good sign because normally most of the deals close towards the end of the show.”

Show organizers later announced that well over 900 new boats were purchased at the show.

We wanted to know how boat buyers were paying for their new vessels. Some people pay cash [or say they’re paying cash] but in fact, they may have financing already organized or have a significant home equity line of credit set up through their regular bank branch. But there are also financing options available at the dealer level.

Gary Prichard began by noting that there seemed to be more people paying cash at the show this year, but it’s a rare individual who has more than a few thousand dollars in actual “coin of the realm”. Wise people park their money in high interest savings account, money market funds, T-bill or GIC accounts.

Gary Prichard pointed out that today, many customers work with a personal financial advisor and they often set their investments up with a “laddered” approach. A range of investment vehicles such as GICs, money market accounts, bonds and T-bills are structured to reach maturity at various times. So, there’s often cash flowing in for reinvestment or other uses.

Another way that some people walk through the boat dealer’s door ready to write a check is on their line of credit (LOC).

Because these lines of credit are typically secured by the equity in their home, (especially if the LOC is for more than $50,000) buyers can access funds at a lower interest rate, often close to prime. The pitfall of using an LOC is that it is generally set up as an emergency access to funds. You don’t pay unless you take the money out on the line; theoretically it’s there for the rainy day.

If you use up your LOC for something like a boat, even with all best intentions of paying it back quickly, you might find that the line of credit is used up when you need it most.

An equally significant consideration is that there are no structured repayment requirements. Will Walker told us, “We sometimes see people coming back 3 or 4 years later to trade up to a larger boat, but by then, it’s depreciated value does not cover the amount that’s out on the line of credit. In financial parlance, they’ve wound up “underwater” on their boat! Life has a tendency to get in the way,” observed Walker.

For many buyers, it’s a better idea to use the financing that’s available through the dealer. If that dealer works with Gary Prichard’s group at RBC, then you have the Royal Bank already set up to give you a loan for your boat. A private broker like Walker Financial operates in very much the same way, but has access to money through a number of different banks as well as some non-bank lenders.

We know the TD Bank is getting into this area in a much bigger way and BRP has recently entered into a new relationship with National Bank Financial Group to provide promotional retail financing to its retailers throughout Canada.

There are clearly benefits. When going through a recognized dealer, they know the values, take trade-ins and things can move ahead quickly.

Gary Prichard said that, “You can get sometimes get your loan organized in as little as 30 min. It’s easy to do the application right at the dealers’ [or at the boat show!] and you get what amounts to on the spot financing.

Loans for small boats are easily set up and for qualified buyers, even new boats 40 feet long or more, are easily financed. You may face a nominal administration cost but generally, the rates will be competitive and more importantly, the lender takes the boat as collateral. This way your other affairs are not affected and the bank sets up a defined payment structure that turns your boat into an asset over time.

Talk to your dealer - rates are low, the dollar is high and prices are attractive...right now.

By Andy Adams

Related Articles

Boat Reviews

Video Gallery

 

 

Beneteau Oceanis Yacht 54By Zuzana Prochazka

Beneteau saw an opportunity to add a little thrill to any cruising adventure, so they took the hull of the First 53 racer (introduced just last year), and with a few fashionable changes, created the Oceanis Yacht 54, the new entry-level of Beneteau’s swanky Oceanis Yacht line. The result is a performance cruiser that sails like a witch and looks like a grande dame.

Design

Roberto Biscontini is the naval architect and Lorenzo Argento created the details of the exterior and interior design. 

Read More

Destinations

  • Prev
Over the course of four days in September 1864, representatives from Prince Edward Island, Nova ...
The new owners of L’Orignal Marina offer boaters a new destination. Located in a charming ...
On Friday, April 2 at 7 pm ET on TVO and streaming anytime after that on tvo.org and the TVO ...
Salt Spring Island, the largest among the Gulf Islands, has a certain mystique—much of it having to ...
Located in Lake Huron, the internationally significant Manitoulin Island is the largest freshwater ...
In Part I, Sheryl Shard ended the story at June and the start of Hurricane Season when they were ...
You likely aren’t quite ready to travel yet, but we have our fingers crossed that we can all fly ...

Riverest MarinaThe new owners of L’Orignal Marina offer boaters a new destination. Located in a charming francophone village in Eastern Ontario, this joined marina and restaurant venue is the ambitious initiative of long-time entrepreneur André Chabot and biologist Alexandra Quester, both residents of L’Orignal.

The purchase of the L’Orignal Marina was made official in November 2020. The new year was barely underway when all 50 available slips were already reserved. No wonder the addition of member and visitor slips is already planned for the 2022 season – the 2021 count is up to 62 power and sail already. At the moment, the Riverest Marina offers boaters a stop where they can launch their boat...

Read More

Lifestyle

  • Prev
Last issue we featured a story about the engagement proposal aboard Via-Mara, a 1969 Trojan 42 Aft ...
With thanks to Sail Canada, here’s a collection of photos that are Olympic quality. Clearly our ...
Wow. That was a lot of fun reading the collection of boat names that came in from all over the ...
No individual had a greater impact on the modern sport of sailing than Bruce Kirby. Known and ...
Just off The Ocean Race European Tour, Daniel is setting his sights on competing in The Ocean Race ...
After being our fearless leader and publisher since CYOB kicked off, Greg Nicoll, handed over the ...
Swim Drink Fish is spearheading the Vancouver Plastic Cleanup by installing, maintaining, and ...
With but four weeks to go, Sarah is in Japan, staying safe while acclimatizing to the heat at ...
MJM is a different kind of boat builder, second generation family owned and operated, we design and ...
Stuart Hendrie, a pro photographer sent along this photo of the pirate ship in Jordan Ontario. Many ...

Marine Products

  • Prev
Watermakers take ocean water and create perfect drinking water using reverse osmosis. A Schenker ...
If you’re headed out for a weekend afloat or on a week-long cruise you often must park your vehicle ...
Ten years ago, St. Margaret’s Bay (Halifax), Nova Scotia-based SailTimer Inc. made the first ...
Between the odor and working in confined spaces, replacing an onboard sanitation line is never a ...
For many boat owners who have gear to tote and the occasional stretch of bumpy road to negotiate, a ...
The 2022 Sea-Doo Switch is a re-imagined pontoon that makes hitting the water more accessible than ...
On the water audiophile-quality sound is attainable with the new JBL-R3500 source unit. The latest ...
An environmentally friendly product for refinishing your teak, hemp wood finishing oil is an ...
August means cruising, entertaining and enjoying summer at its finest. And that means food and ...
A Bluetooth-enabled phone or tablet is ideal for streaming music, but it's often stowed safely away ...

News

  • Prev
Royal Canadian Yacht Club’s Defiant completed a six-race sweep of the Cup for Canada over Zing, the ...
On September 6, Groupe Beneteau laid out its course to develop new boating experiences, new ...
Last Friday, the first ever Canada’s Celebration of Sailing honoured the season for Sailing in ...
Boating Ontario is very proud to have Transport Canada’s Office of Boating Safety jump on ...
Montreal-based Vision Marine Technologies, Inc. is headed to the Lake of the Ozarks Shootout to ...
Summer is in full swing with Canadians enjoying time outside and on the water. So, while enjoying ...
On July 23 last year, CYOB published a piece on a beautifully restored 1967 Trojan 42 Motor ...
HanseYachts AG presents RYCK, its third motorboat brand carrying the "Made in Germany" label. The ...
“We are all proud of our athletes and coaches who have dedicated themselves to push Canadian ...
Collingwood, ON hq’d Limestone Boat Company – owner and builder of Aquasport Boats, Limestone Boats ...

Mia and Caleb's EngagementOn July 23 last year, CYOB published a piece on a beautifully restored 1967 Trojan 42 Motor Yacht in Oromocto NB. (That piece was also expanded in CY magazine later in the year.)

One of our Canadian Yachting contributors, Denise Miller, had shared the article on my social media and a young man reached out and asked if she could connect him with the owners of the boat, Dave and Barb. Denise leapt into action and Dave and Barb were thrilled. They concocted a plan that the young lady, Mia, thought she was coming to model for a sales brochure for Dave to do charter tours.

Read More