What does it cost to buy down a rate? For example, Formula offers their Escape rates that are below market. What does this cost the builder to secure these lower rates than that are available on the open market?????
2006 Formula 260BR, BIII, Merc 496 MAG, Prestige Trailer
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#33024 - 10/28/0608:44 PMRe: Negotiating Interest Rates on your new boat
Joined: Nov 2003 Posts: 15,148GoFirstClass
Retired Boating Bum
Boomer, that depends on how much business the bank is figuring to get from Formula, what the amount of the discount is, etc. When a boat maker offers a program like that it's generally through a nationwide lender (as opposed to a regional bank) and the factory has supplemented the buy down amount.
Often you will see boat mfg's offer low rates for the first part of the loan (2-3 years), then it goes up to the standard rates. What the dealers are doing there is giving up part or all of their "reserves" in exchange for the decreased rate.
If times are tight (ask the car makers about this one) dealers will have to give decreased rates to push the boats out the door. It's interesting that the "Zero Percent Financing" and other low rate programs that started with the car makers are now pushing into other areas. Everything from refrigerators to TV's to garden tractors are being offered at low rates.
"Beachcomber" 1995 Sea Ray 550 Sedan Bridge
Anchor's down......Bottoms Up!
#33025 - 10/28/0610:50 PMRe: Negotiating Interest Rates on your new boat
GoFirstClass wrote "Not always--it varies from bank to bank. My debit card has the same protections as a credit card"
That maybe true but that is not what the consumer radio show here in Atlanta sez..."Clark Howard"...He has a challenge out to Visa and MasterCard to prove him wrong and they never have said he is wrong...You do not have the same protection as a real credit card....your bank may back you but Visa and Mastercard will not.
agsbill...the debit card I use is issued through the investment firm I work for. It allows clients to use their investment accounts for full banking services as well as investing. They issue a VISA Debit card as well as an American Express Credit card for those purchases you want to be able to pay off over time. Both cards have the same level of protection and "award points" for both cards accrue in the same account. To me, it doesn't matter who provides the additional security level, only that it is there.
I have listened to Clark Howard and like most of what he has had to say. There are a few of the things he has said that I take exception to. I don't know if this is the case, but it is possible that VISA and mastercard are not aware of his 'challenge' or have chosen to ignore him.