Lombard Marine: Buying your next boat

She was your dream, the one you’d always wanted, and you’ll always love her – but now you need something bigger, faster or more economical.

There’s no need to feel guilty: someone else will love her as much as you do. When it’s time to move on, these steps will help you trade in your old boat for a new one…

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You can put a card in the post office window or advertise in the yachting press, but the easiest way to sell a boat is through a broker, who will be the first port of call for serious buyers and can handle all aspects of the sale.

 “Brokers and boat retailers typically have responsibility for ensuring the legal framework surrounding the sale and purchase of small craft is fit for purpose and for conducting the transaction successfully within this framework,” says the British Marine Federation (BMF). However, brokers come at a price, usually charging commission, with VAT added to the cost of their services.

 Choose a broker who is a member of an association with a code of conduct or practice, such as the BMF (britishmarine.co.uk), or the Association of Brokers and Yacht Agents (abya.co.uk). “Our brokers benefit from access to British Marine standard form contracts, 24-hour legal support, bespoke VAT advice, boat sales training and networking events,” says the BMF.

Potential purchasers will want to view your boat and negotiate what’s included in the sale. Decide whether sails, electronic equipment, life rafts and chandlery are on the table, or if you need them to equip your next vessel.

 Price

The Royal Yachting Association (RYA) recommends making a written sale and purchase agreement, covering the boat and its fittings. It suggests: “Whilst verbal agreements are perfectly valid in law, they are notoriously difficult to prove and any disagreement will come down to one party’s word against the other.”

 It’s usual for the buyer to pay a deposit to secure their purchase (although there is no legal requirement to do so); if you would prefer to take a deposit, you need to negotiate how much. Once it’s been received, your broker should hold the deposit in a designated client trust account, and you should not offer the boat to anyone else.

Forward-thinking finance

You may need a mortgage to cover any shortfall between the sale of your last boat and the purchase of the next. Before agreeing a price for your new boat, have finance in place – or she may sail away with someone else. Lombard Marine Finance offers variable rate marine mortgages from £25,000, taking the vessel as security.

 Payment options include a balanced payment plan, which fixes your monthly repayments for the duration of the agreement. However, if there are changes in the base rate then your mortgage period will vary. Balloon payments are available on some mortgages, meaning lower monthly instalments over a fixed duration, followed by a final lump sum. In addition, some products allow any-time lump sum capital payments at no extra charge.

 Once the price is agreed, Lombard will issue mortgage documentation and liaise with your broker to review title deeds and evidence of VAT status, contact your insurer to confirm insurance and register their interest, and then complete the purchase and release funds to your broker.

Surveys and contracts

Well-weathered owners might think they know what they’re looking for – but boats are sold as seen, and looks can be deceiving. Always get a survey carried out prior to agreeing a price. “If you buy a boat without a survey and you later find defects with it, you may not have any legal rights,” warns the RYA.

 You can find a surveyor through the Yacht Brokers, Designers & Surveyors Association (ybdsa.co.uk), the Yacht Designers & Surveyors Association (ydsa.co.uk), or the International Institute of Marine Surveying (iims.org.uk). Have a sea trial – every boat sails differently, even matching models from the same builder.

 If you’re buying a second-hand boat, ensure there is no debt attached to it. The RYA says: “It is possible for a seller to sell a boat without paying off the finance company, without settling a hire purchase agreement; or a boat which is a security against a personal loan from a bank; or a boat upon which a boatyard or marina is owed money. In all such circumstances, this could well leave the purchaser in the position of having, later, to pay off the debt(s).” And be sure the seller has a proper title to sell the boat.

 As a second-time boat buyer, you’ll know what you want, and may even decide to have one built to your specifications. If so, sign a construction agreement. The BMF produces an agreement for the construction of a new boat, available direct from them or the RYA (rya.org.uk). The dealer will have a finance plan, so find out the arrangements: if stage payments are required; what security is offered during the build; and when the title passes to you. Once you hold the title, make sure you are good for insurance, mooring, and other costs – factoring in any chandlery and safety equipment, even if you’re transferring gear from your previous boat.

Ownership options

If you’re trading boats to downsize, you could go a step further and buy a bit of one. A number of companies offer part-ownership schemes, on everything from shiny new motorboats to second-hand sailing yachts.

 One such is Yacht Fractions (yachtfractions.co.uk), which offers customers the advantages of full access to the boat for however many weeks they wish to spend sailing, without shouldering the entire burden of purchasing, outfitting, mooring and maintenance.

 “More and more buyers are wanting to share the costs and are seeing the appeal of being part of a syndicate of owners rather than going it alone,” says Yacht Fractions owner David Watt.

 Further information

To discuss finance choices for your next boat purchase, visit Lombard at stand E046 at TheYachtMarket.com Southampton Boat Show 2018. Renowned as Britain’s biggest festival of boating, the event showcases myriad vessels, and you could spot your next yacht in its purpose-built marina.

 To find out how Lombard could help, email Joe Dalton, relationship director at Lombard Marine, Joe.Dalton@lombard.co.uk or visit lombard.co.uk/lombard/expertise/marine.html.

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