Looking for a Boat? Lease or Buy?
|How one manufacturer is offering an alternative to boaters who don’t want to purchase a boat.|
When it comes time to get a new car, do you buy or do you lease? Things to consider in making that decision include whether you plan on keeping a car for a long time or prefer to have a new one every few years and whether you want to avoid the financial costs associated with owning and the hassles of dealing with depreciation and resale values. For many, leasing is an affordable, convenient alternative that allows people with changing needs or tastes to trade in their existing vehicle for a newer model after a few years with little aggravation.
Since, reportedly, more than half of all American drivers now lease their cars, it may come as a surprise that most boat dealers do not offer leasing. After all, the down payment on a purchase can tie up a lot of money, and the residual (resale) value of the boat will drop the minute she leaves the dock. In addition, boating needs, like car needs, can change. There are numerous ways to finance a boat purchase, but few options are available to you if you don't want or can't easily afford to buy a boat outright.
So what about the family with two children which is presently well suited in a 35-footer but might need to upgrade to a 40-footer as the children grow, or downsize to a 30-footer as they become involved in activities outside of boating? Or what about the wealthy businessman with substantial personal assets who wants use of a boat whenever he desires, but doesn't want to tie up $20,000 of his money on a down payment?
Enter Russo Marine, which bills itself as New England's largest powerboat dealer. In combination with Russo Marine Financial Services, the company's own leasing/lending agent, Russo Marine has been offering boat leasing since 1997. President and CEO Larry Russo, Sr. says the program was designed as an alternative to traditional marine financing and to create "a shorter vessel-ownership cycle." Today, leases reportedly make up ten percent of the company's annual sales. In fact, leasing has been so successful for salespeople that "I just spent two hours talking with a customer about leasing who decided to buy the whole boat instead!" has reportedly become a running joke amongst the sales team.
This article originally appeared in the January 2003 issue of Power & Motoryacht magazine.