Have used boat prices peaked?

[the MfM]

The mortgage rates are hitting 7% or more. Could easily be 9-10% by the end of the year.

I think New Boat prices have peaked . Going to be a lot of sticker shock when the finance department offers a 26% loan!

 

[I_squared_r]

The mortgage rates are hitting 7% or more. Could easily be 9-10% by the end of the year.

I think New Boat prices have peaked . Going to be a lot of sticker shock when the finance department offers a 26% loan!

Those rates are going to reduce demand for larger purchases. I'm thinking it would result in increased demand for cheaper boats because people are more likely to have 20-30k in their savings to purchase a used boat. Then used boats in the 30k+ range would have to reduce their prices because the typical middle class family would have to finance that larger purchase.. And I imagine a 10% 10+ year loan isn't enticing for the financially adept person.

My opinion is anecdotal from my experience buying and selling used motorcycles and jet skis. Motorcycles and jet skis over 5k get increasingly difficult to sell. The demand is there, but the person prefers to buy it at a dealer with their financing.

 

[BlkGS]

Those rates are going to reduce demand for larger purchases. I'm thinking it would result in increased demand for cheaper boats because people are more likely to have 20-30k in their savings to purchase a used boat. Then used boats in the 30k+ range would have to reduce their prices because the typical middle class family would have to finance that larger purchase.. And I imagine a 10% 10+ year loan isn't enticing for the financially adept person.

My opinion is anecdotal from my experience buying and selling used motorcycles and jet skis. Motorcycles and jet skis over 5k get increasingly difficult to sell. The demand is there, but the person prefers to buy it at a dealer with their financing.

I think we're in for a savage cycle of thr fed not knowing what to do. They'll spike rates, kill demand, then back off and spend and create inflation, then flip flop it all over again. They're acting totally clueless.

 

[Cambo]

Just about every jet boat for sale has the same response if I don't sell it I will put it away for winter most are not interested in selling unless they find a really dumb buyer. Nada is so far off the mark but with free adds and stories of people selling for ridiculous prices it has created an unrealistic market place. Copart should be loaded with inventory after this storm you just need to find one baot that a tree fell on and one that sunk and swap the motors then sell off the extra parts.

 

[Epsmith19]

I think those people will be absolutely crushed by interest rates then. Interest rates will be 2 to 4% higher by then. The Fed looks set to keep rising interest rates by .75% every month for a while.

even more of a reason to not finance a boat

 

[suke]

the rates are having me second guess my "new" truck purchase next year. My truck value is likely to still be decent, but with rates stupid high it doesn't make sense to buy something more expensive unless I can put a lot more down. With the market in the shitter there goes my down payment dwindling away. My salary pays the bills, my restricted stock buys my big ticket items/toys.

 

[Jim_in_Delaware]

I don't know if I would rule out a new truck purchase next year, if I was wanting a new vehicle. While loan rates may be higher, my guess is that there will be a return to incentives/discounts for new car purchases. Auto loan rates are usually less than mortgage rates. Here are today's rates from my credit union (Navy Federal):

New & Used Car Loan Rates2

Loan Type	Up to 36 mos. APR as low as	37-60 mos. APR as low as	61-72 mos. APR as low as	73-84 mos. APR as low as	85-96 mos. APR as low as
New Vehicle	3.79%	3.99%	4.29%	6.19%	7.09%
Late Model Used Vehicle	3.79%	3.99%	4.29%	N/A	N/A
Used Vehicle	4.69%	4.99%	5.09%	N/A	N/A

It might end up that buying a new/used car truck next year may not be any more expensive that buying one this year.

Jim

 

[I_squared_r]

Low rates still exist. I got the lowest rate on my truck: 72 months at 2.99%
Nassau financial federal credit union
My loan was about 75% LTV after my trade in and a little down. But at these rates it's smart to stay at the 90% LTV

 

[suke]

Low rates still exist. I got the lowest rate on my truck: 72 months at 2.99%
Nassau financial federal credit union
My loan was about 75% LTV after my trade in and a little down. But at these rates it's smart to stay at the 90% LTV

View attachment 188930

That's actually really dang good! Now just need the market to take a turn for the better to give me a decent down payment. I'm not one to carry more than a $400-500 car payment.

 

[@JC!]

I'll just say that anyone who locks in now at current pricing for a boat being delivered in the spring is a fool.

 

[mwalker4]

My perspective, people who don't have a very clear situation that they have mapped out that an ARM works for them should not get an ARM. If people are doing it to afford a house they can't normally (which is typically the case), they're going to get screwed.

Anyone for whom an ARM is a viable.option would not be on here reading this and taking any of it into account, because they'd be far above expert level. The 28 year old guy I work.with who needs to move out of his mom's and has a mortgage broker who told.him an ARM would let him buy something now and bank on.future earning potential, he'll get screwed.

First, I do not recommend buying a home now unless you absolutely have to buy. But if I had to buy, I would consider a 5 / 1 arm. The money is fixed for 5 years then goes up. The interest rate for a 5/1 arm is about 1.25%-1.5% less than 30 year fixed. Over the first 5 years you save over 5% in interest. Given a 2% escalation clause, the absolute worst case breakeven time is almost 8 years. That only occurs if we have interest rates which we had for about 3 or 4 years in the early 80's. Additionally, the average homeowner owns their home for 6 years.

My first home was while I was in college in 1984 in Gainesville Florida. I used a 3/1 arm since fixed interest rates were 11%. It turned out to be a great deal as the rates adjusted downward each time they adjusted. I have invested in residential real estate off and on since then. I haven't used an ARM for quite some time since fixed rates have been so low. I haven't purchased a property for 4 years due to the market, but I currently own 35 residential properties. So I feel I have the experience necessary to say that an ARM should be considered if you absolutely have to buy a house now. But no, don't buy a house now unless you have to. Consider renting.

 

[BlkGS]

First, I do not recommend buying a home now unless you absolutely have to buy. But if I had to buy, I would consider a 5 / 1 arm. The money is fixed for 5 years then goes up. The interest rate for a 5/1 arm is about 1.25%-1.5% less than 30 year fixed. Over the first 5 years you save over 5% in interest. Given a 2% escalation clause, the absolute worst case breakeven time is almost 8 years. That only occurs if we have interest rates which we had for about 3 or 4 years in the early 80's. Additionally, the average homeowner owns their home for 6 years.

My first home was while I was in college in 1984 in Gainesville Florida. I used a 3/1 arm since fixed interest rates were 11%. It turned out to be a great deal as the rates adjusted downward each time they adjusted. I have invested in residential real estate off and on since then. I haven't used an ARM for quite some time since fixed rates have been so low. I haven't purchased a property for 4 years due to the market, but I currently own 35 residential properties. So I feel I have the experience necessary to say that an ARM should be considered if you absolutely have to buy a house now. But no, don't buy a house now unless you have to. Consider renting.

You're the sort of person that understands an ARM and can make them work. I just think think they're products that should be sold to just anyone off the street. I knew several people who lost their homes in 08 when ARMs were at their peak and rates adjusted up. People went from "barely making my payments" to "can't afford our home".

My friend at work who was told he should get an ARM is literally trying to get his grocery bills down to 50 bucks a week so he can make the payment the ARM claimed work. There is ZERO buffer for.him, so unless his income.jumps tremendously, far outpacing cost of living, he is setting himself up for failure.

 

[mwalker4]

You're the sort of person that understands an ARM and can make them work. I just think think they're products that should be sold to just anyone off the street. I knew several people who lost their homes in 08 when ARMs were at their peak and rates adjusted up. People went from "barely making my payments" to "can't afford our home".

My friend at work who was told he should get an ARM is literally trying to get his grocery bills down to 50 bucks a week so he can make the payment the ARM claimed work. There is ZERO buffer for.him, so unless his income.jumps tremendously, far outpacing cost of living, he is setting himself up for failure.

Agreed, in the past 20 years mortgage folks have moved from being a loan officer representing a bank to a sales person. Most loans are bundled and sold so the sales person doesn't have as much interest in your long term ability to pay. Personally. I would extend this thought to getting a ten year loan on a boat. Our current economy is based upon credit and I am concerned the problems are just coming home to roost. I repossessed cars for extra money during college in the early 80s. I got to drive a lot of nice Trans Ams with T tops. We could be heading there again.