How boat trade-in equity works
The dealer or broker values your boat and settles any marine finance on it. If it is worth more than the settlement figure, the difference works like a deposit.
If it is worth less, the shortfall is added to the new loan. Cash you add is separate and also reduces the amount financed.
Worked example
A £60,000 boat with a £20,000 trade-in, £8,000 still owed on it and £5,000 cash leaves £7,000 of equity. The amount financed is £43,000.
At 8.5% over 96 months the payment is £618.86 and the total interest is £16,410.71. The loan-to-value is 71.67%.
Check the settlement first
Marine finance settlement figures can include early settlement charges. Ask the lender for a written quote before agreeing the trade-in value.
A private sale may fetch more than a trade-in, but you settle the finance yourself and handle the paperwork.
Inputs for the boat loan trade in calculator
New car purchase price
The price of the boat you are buying.
Current car trade-in value
What the dealer will allow for your current boat.
Current loan balance
The settlement figure on the boat you are trading in. Enter 0 if owned outright.
Cash down payment
Any cash you are adding on top of the trade-in.
Term
How many months the new loan will run.
Interest rate
The yearly rate on the new loan, before monthly compounding.
CALCULATOR QUESTIONS
Boat loan calculator with trade in questions
What if my boat is worth less than I owe?
The shortfall is negative equity and is added to the new loan, raising the payment.
Does the trade-in count as a deposit?
Only the net equity after settling finance on the old boat.
What LTV will I get?
In the example, 71.67%. A higher LTV usually means a higher rate or a requirement for insurance.
Should I sell privately?
Often it nets more, but you must settle the finance and handle the sale yourself.