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Once you decide to buy a boat, you'll find yourself

wondering how you are going to pay for it. This

type of purchase will involve some type of financing,

whether it's a credit line through the home, an

unsecured loan, or a boat line. Choosing the right

financing source can be just as important as

choosing the right boat.

When choosing a source of financing, there are

several things to consider. The first factor is

how long you plan to keep the boat. If you are

buying a first boat, it'll make more sense to find

a loan that will be flexible enough for an early

payoff via private party or even a trade in.

If you are purchasing the boat of your dreams, you

should expect to have it financed for a long time

which makes it important to get a fixed rate loan

with terms that allow for a low monthly payment.

Another factor you'll need to consider is the

down payment. Most lenders or dealers would like

to see at least ten percent down. Zero down

payments do exist for those with good enough

credit. Normally, the down payment doesn't

significantly change the monthly payment for your

boat loan.

Choosing the right type of boat loan is a very

important part of the entire buying process. You

can start with a boat finance brokerage, which

will show you how each one of the available options

fit into your profile.

Doing this will give you the knowledge and ability

you need to find the loan that best fits you and

your budget. The, you can concentrate on the

important things - taking your new boat out on the

For auto-consumers, crunching the numbers is one of the most difficult and

confusing aspects of leasing.

Take the finance charge on a lease for instance. Most people just don’t

understand how this is calculated on capitalised cost AND residual value

instead of just the capitalised cost. For most, it seems plainly obvious,

just as is the case when purchasing, that a charge should be levied on the

capitalised cost of the vehicle.

Well, no quite! When you lease a car, you’re only using the car over a

specified period of time with the option of buying the car. The residual

value represents the “loan balance” at the end of the lease. If you add it

to the capitalized cost and divide by two, you’ll get the average

capitalized cost outstanding over the lease term. Let us suppose you’re

leasing a car with a capitalized cost of $25,000 and a residual value of

$15,000. You average balance over the lease term, irrespective of how long

it is, is $20,000 – the sum of the two divided by two -.

Using this sum works because the money factor is the annual interest rate

devided by 24, rather than 12. Continuing with our example and assuming an

interest rate of 6% APR:

$30,000 X (6 per cent / 24) = $75

(Capitalized cost + residual value) X (interest rate / 24) = Monthly

finance charge

This finance charge is added to the depreciation charge to calculate the

monthly payments on your lease.