Purchasing a Boat for Private Purposes - Cash Versus Finance

You work hard in order to purchase products or services. As well as working hard to pay the bills, you also work hard to purchase products to enjoy. One such product is a boat. Although a boat may be purchased for business purposes, for example for a boat charter business, most boats are purchased for private activities. If you purchase a boat for private purposes, there are no tax deductions allowable. Accordingly, it's not worth buying an expensive boat unless of course you are a millionaire and can afford it. If you are purchasing the boat for private purposes you really need to work out if it is really worth buying a boat. You don't want to buy a boat if you don't intend to use it often. It will be like throwing money in the drain. The money can be put to better use.

If you have taken everything in consideration and you decide that you must have the boat, it is better, if you have the funds, or most of the funds saved up, to purchase the boat in cash. You need to shop around to get the best deal. Try not to overspend your budget. If you are buying a second hand boat, get it checked out by a professional as you don't want to pay major repair bills soon after purchasing it. You should also keep in mind that you must have sufficient funds to pay for other expenses such as registration, taxes and storage. You also need to pay for insurance, repair bills and so on.

On the other hand, if you don't have sufficient funds saved up, you can consider obtaining finance from a financial institution. Personally, I would try to avoid this option as the charges such as interest will not be tax deductible. Over the full term of the loan, you will find that because of the interest component, you will end up spending well above the purchase price of the boat. However, if you insist to go around this road, shop around to get the best deal.

In conclusion, unless you want to purchase the boat for a business, it may end up being an expensive hobby if you have to end up borrowing money to purchase it. Even though you have the funds to purchase the boat outright, there are still the running expenses that you need to budget for. Unless you have a passion for boats and will make good use of it or you are a millionaire with plenty of money to throw around, it may not be worth buying a boat.