2014 and 2015 Guaranteed trade in rate? Gimmick or Not?

[0627Devildog]

http://yamahaboats.com/news/yamaha-...uaranteed-trade-program-19’-21’-and-24’-boats

YAMAHA ANNOUNCES INDUSTRY’S FIRST GUARANTEED TRADE-IN PROGRAM FOR 19’, 21’, AND 24’ BOATS
Yamaha WaterCraft Group, a division of Yamaha Motor Corporation, U.S.A., today introduced the industry’s first guaranteed trade-in program for its 19’, 21’, and 24’ boats. The program provides buyers the opportunity and peace of mind knowing that they can easily trade-in their Yamaha boat for a new model without having to worry about negative equity.

When a customer purchases a new 2014 or 2015 Yamaha boat and finances at a special 60-month Yamaha Factory Finance rate, the buyer now has the option to return the boat to the originating dealer after 60 months as a guaranteed trade-in. The boat will be valued according to NADA (National Automobile Dealers Association) standards, and in the event that the customer owes more that the NADA Used Trade-In Value, the remaining loan balance will be paid by Yamaha up to $5,000.

According to Bryan Seti, Yamaha WaterCraft general manager, “We sought to bring more peace of mind to Yamaha boat buyers. Now, our buyers can enjoy the confidence of knowing that when they want to trade up to a new model five years down the line, should there be any negative equity, it will be paid off up to $5,000 at no cost to them.”

Learn more the Yamaha Boats Guaranteed Buyback Program by visiting your local Yamaha dealer.

 

[0627Devildog]

My take:

If you are taking the 60 Month finance rate, and can only trade it in after 60 months, you should not owe anything anyway right? So how can they assess negative equity on an item that should be paid off at that point? Am I missing something?

While I own my boat outright, and this does not apply to me directly I don't like gimmicks and trickery so I am deeply interested in everyone's comments.

 

[Wayloncle]

Some people may refinance during that time maybe? But that may disqualify you from the deal....

 

[96Pirate]

My take:

If you are taking the 60 Month finance rate, and can only trade it in after 60 months, you should not owe anything anyway right? So how can they assess negative equity on an item that should be paid off at that point? Am I missing something?

While I own my boat outright, and this does not apply to me directly I don't like gimmicks and trickery so I am deeply interested in everyone's comments.

That was my take but as @Wayloncle points out if refinancing doesn't disqualify you then someone can refinance for a longer period and therefore potentially have negative equity. That's the only way I can see it happening.

 

[Ronnie]

SeaRay has had a similar program in place for a few years now. My wife's cousin took advantage of it after buying a towerless boat and trading it in for a towered boat a year later. He wouldn't tell me the details so maybe SeaRay took advantage of him and he lost his ass in the deal but he was able to get the boat he wanted without having to sell his current boat privately or negotiate the trade-in value. I look at it like I would a refi of my home, yes I can lower payments but I would be extending them (resetting the clock) at the same time, so for that reason I wouldn't do it. Besides it is much cheaper and more fun to modify what I already have.

 

[0627Devildog]

SeaRay has had a similar program in place for a few years now. My wife's cousin took advantage of it after buying a towerless boat and trading it in for a towered boat a year later. He wouldn't tell me the details so maybe SeaRay took advantage of him and he lost his ass in the deal but he was able to get the boat he wanted without having to sell his current boat privately or negotiate the trade-in value. I look at it like I would a refi of my home, yes I can lower payments but I would be extending them (resetting the clock) at the same time, so for that reason I wouldn't do it. Besides it is much cheaper and more fun to modify what I already have.

It's just doesn't add up to me. . . . I can't seem to find the T's and C's yet. But if we take it at face value. . . 60 month finance term and trade ONLY after 60 months there is ZERO risk of negative equity unless you miss payments at which point they can REPO the boat. If I can get $5K on NADA after 1 year I would consider upgrading to a 2015 if I had payments.

It just feels like a sleazy marketing ploy. I am all for marketing when there is something valid to market about, but this just feels like a sneaky underhanded attempt to make it LOOK like they are doing something when in fact, they are not adding any value.

 

[Bruce]

My guess is that it is financed at a 10 or 15 year rate with a guarantee that you will not owe more than it is worth if you trade in after 5 years. I have never financed a boat. How do you guys on 15 year notes look at 5 years?

 

[Bruce]

Looking at an amortization calculator of you financed $60K for 15 years at 2.99% you would still owe $43k five years in. So I could see this helping.

 

[0627Devildog]

Looking at an amortization calculator of you financed $60K for 15 years at 2.99% you would still owe $43k five years in. So I could see this helping.

Wait, what? Are these interest only loans for the first 60 Months?

 

[Bruce]

Wait, what? Are these interest only loans for the first 60 Months?

My guess is that they are loans with 10 or 15 year payment terms with a guaranteed value at 5 years in.

 

[0627Devildog]

My guess is that they are loans with 10 or 15 year payment terms with a guaranteed value at 5 years in.

Hmmmm. It never occurred to me that someone would do a 10/15yr loan on a boat. Based on the line "60-month Yamaha Factory Finance rate" I was under the impression that it was a 60 month loan.

We have any dealers on here that can chime in?

 

[BoaterGuy]

I think maybe you get a special APR for the first 60 months of the 15 year term. If it is lower during that first 60 months it would make sense that you wouldnt have negative equity as more of your payments go towards the principle.

It would also provide incentive to trade up if your APR will increase after the 60 months is over as your payment would go up otherwise.

 

[Julian]

It clearly says its a 60 month loan. The only thing I can figure is this would be helpful to the person who wants to upgrade in <60 months. @0627Devildog you point is right on....how would you owe anything at 60 months! Heck, even at 48 months, it would be hard to figure you'd be underwater with only 1 year left on the loan. Looks like a gimmick that would only be useful for someone making a decision to upgrade in year 1, perhaps year 2....

 

[Pointblank]

Sounds more like a lease, "only 5 year commitment." cynosure Financial was behind Chevy's 60-day return promo a few years back and a number of other gimmicky offers (including motorcycles). I have a call into a dealer for more details. I have to say I was pretty disappointed they didn't put up an offer for the 2015 242s...in due course I guess...

 

[-klb-]

Could be a 60 month note, with a considerable ballon payment due at the end of 60 months. Then you have the option of securing used boat financing, paying off cash, or taking the upgrade deal.

 

[davel501]

This sounds a lot like Yamaha looking for a way to monetize their extremely good trade in values by creating a certified pre-owned program. The dealer gets a chance to sell a new boat to someone that they already know how much they have to get for their old boat. If you can give somebody a new boat for close to the same payment then take their old boat and sell it at a profit most people will go for it every time. Most Americans are happy with a set of manageable payments every month rather than ever owning anything outright. They never see the noose around their necks until a life event kicks the chair out from under them.

I should say that I have no problem with the 15 year loans as long as you are able to invest at a higher rate than you are paying in interest and quickly convert that money back if you need it. Financing is a strategy to increase the income you have, not to inflate it and allow you to live beyond your means.

 

[Ziess21]

Just got the email this morning... You have to finance the boat through Synchrony (GE Capital) on the 180 month term. At month 60 you are eligible to trade the boat in and receive used trade in value from NADA AND are covered for up to $5,000 in negative equity. For example: You finance $50k @ 3.99% for 180 months today. 60 months from now your loan balance will be $36,521. If Used Trade in on your boat @ month 60 is $31,521 then you can trade it in toward a new Yamaha and have your loan paid off. If your value is higher than your payoff then you get that as trade as well.

 

[Pointblank]

Spoke with dealer's finance manager and was told it was up to each dealer to opt-in. The one I checked with did not want to participate for whatever reason.

Also confirmed there are still no special rates for 2015s. While that may sound obvious, I wanted to be sure there weren't hidden incentives floating around.

 

[Ziess21]

3.99% rate for 2015s with zero $ down.

 

[Freezer41]

Similar to their waverunner program, I guess, just expanding to boats.