Buying Repossessed Boats from Boat Auctions

Boats are great for family fun and recreation, but many people become discouraged when they realize that a new boat can cost more than a car! Unwilling to sacrifice quality, some folks just give up; however, buying a repossessed boat could be the answer. Not only are repossessed boats sold for between 20 and 60% of their value, but many are in excellent condition. And, with the recent economic downturn, the number of repo boats being sold has increased dramatically, further lowering the overall price.

Now, you may be wondering how these boats can be sold for so little. When a borrower falls behind on loan payments, the bank often takes possession of the boat in order to recoup some of the unpaid loan amount. Once a bank has possession of the boat, the costs of possessing that boat accumulate until it is sold. Not only does the boat incur hefty storage fees, but the remaining loan amount on the boat becomes a financial liability for the bank. Banks earn money by making loans that accrue interest. If a bank has an unpaid loan on its books, the amount of that loan counts against the bank’s overall money-lending ability. And, if no one is making payments on that loan, then the bank is not earning money off of that loan. The faster it sells the boat, the quicker it can put that money toward another loan and begin making money on it again.

Perhaps the best place to get a great deal on a repossessed boat is from a boat auction. Boat auctions are usually held by banks or government agencies and are the easiest way for these entities to offload a large number of boats in a short period of time. Finding boat auctions can be tricky; the easiest way to do so is to join a website that sends out regular e-mail listings of boat auctions. Another option is to call your local bank to find out when and where their boats will be sold.

Boat auctions are great for someone who has less than perfect credit but has saved a good chunk of money. Because you can buy boats for so much less at an auction than you can new, the chances of being able to purchase your boat outright are much higher. And, if you can pay cash, then no one will care about your credit score.

There is some risk associated with buying a repossessed boat, as there is with any used item. While some repossessed boats can be in great condition, others may be severely damaged, and the damage may be hard to spot. Banks rarely check the boats for damage upon repossession, so it is up to you to determine the condition of the boat. Also, boats purchased at boat auctions are done so as-is, with no guarantee, and no warranty, further increasing your risk. There are a few things you can do, however, to decrease your risk. First of all, do research on the boats that are up for auction before you go. Research any common problems with certain years and models so that you will know what to look out for. Then, before the bidding begins, you will have the opportunity to inspect any boats on which you wish to bid. Take full advantage of this. If you don’t have the expertise yourself, then speak with or bring a boat mechanic with you. Check the interior and exterior, as well as the engine. The last thing you want is to buy a boat that will cost you twice as much in repairs, so be thorough.

To make sure you get a great deal, determine the approximate value of the boat. You can find this by looking through boat magazines, or even asking your boat mechanic. Finally, once you know the value of the boat, and you have factored in the cost of any repairs, it is time to set your maximum bid. This is an important step because it keeps you from becoming overly emotional during the bidding process, and bidding more than you can afford, or more than you would like to pay, for your boat.

With these tips, you are sure to get a great deal on repo cars for sale.