Part Three of YBAA University: We recently returned from the annual Yacht Broker’s Assn of America University session. This is a gathering of yacht brokers and new boat sales people, along with industry experts in various fields. We collected lots of great information to share and this is the third and final article. Click here to read part one on marine insurance and part two on electrical updates from ABYC.
- Financing Update: Cindy Lewis is a marine financing specialist who gave a talk at YBAAU on the current situation with boat loans. Coincidentally we have known her for over 40 years and it was nice to see her again. Financing for boat purchases is readily available if the collateral meets the lenders’ guidelines. Like insurance, some of the same concerns apply.
- Older boats are becoming more challenging to get financed. Some lenders will only lend on boats up to 20 years old, some 30, some up to 40, but 20 is the norm. For boats older than that credit unions are usually your best bet. For very expensive boats the lender may limit where the boat can be used, and geofencing may be required. Once again, Florida came in for extra scrutiny, due to weather hazards and boat theft.
- If the owner is new, a package is put together to make it more attractive to a lender. Here at RCR we are accustomed to this because we handle most of the financing for our customers in-house. It is advisable to have your insurance and financing lined up in advance of signing a purchase offer.
- Legal Discussion: Todd Lochner is a frequent presenter at YBAA events and webinars. He specializes in maritime law and transactions. He updated us on the status of the legislation covering 10 knot speed limits along the Atlantic coast to protect the Right Whales. Rules have been in effect for commercial vessels over 65 feet in length, but the pending rules will drop the length down to any boat 35 feet or more. There is even provision for the rule to cover ALL boats in areas where NOAA posts a restriction notice, which they may do at any time.
- Fines are very steep, like $20,000! How do they catch you? They track you by AIS. People have been turning off their AIS, which the US Coast Guard does not like and of course defeats the purpose of AIS in the first place. While this limitation won’t impact those of us who boat here, it will if you go to the Carolinas on a fishing charter.
- Taxes: For a long time people would try to avoid paying taxes by registering their boat in Delaware. The authorities are on the lookout for this as it is the state of principle operation that matters for taxation. Many people who registered in Delaware, but don’t actually keep or operate the boat there, are getting nabbed.