Gap insurance for boats

[davisxx]

I was wondering if there is gap insurance for folks that finance boats for 6-15 years? Should the boat get totaled and you financed for a long term the insurance company is only going to pay what the boat is worth, not pay off all the interest one would still owe. IE: you financed a 50K boat for 15 years, to get payments down, ( say over a 15 year period the total loan ends up being approx 70K+/-) but you total it one year later and you only receive a claim check for approx 35-40K, whatever bluebook says it is worth, but there is still 20-30K left on your loan ( due to the interest) can you you buy gap insurance to pay off the remaining balance of the loan.

[jheller16]

Your questions has two parts. First, and I would love to know for sure, but I dont think there are many, if any companies that would offer gap insurance. It would be to risky for an insurance company to offer it on a boat going out 15 years.

However, I think you have a misconception on a boat loan. Your interest does not get added to the loan amount when you purchase the boat. For example, if you get a boat for 50k and finance 15 years, your balance would never be more than 50k. The typical boat loan is a simple interest loan. Yes, they will show you a form that shows the total amount of principle and interest you would pay if you make the suggested payment ever month until the end of the term. If you make double payments, you will pay less in overall interest. If you total your boat one year 1 and its blue book value is 40k, than you are out a little less than 10k, as you would have been paying on your principle since day one.

Anyone correct me if I am wrong.

[reclending.com]

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by jheller16 &raquo;</TD></TR><TR><TD CLASS="quote">Your questions has two parts. First, and I would love to know for sure, but I dont think there are many, if any companies that would offer gap insurance. It would be to risky for an insurance company to offer it on a boat going out 15 years.

However, I think you have a misconception on a boat loan. Your interest does not get added to the loan amount when you purchase the boat. For example, if you get a boat for 50k and finance 15 years, your balance would never be more than 50k. The typical boat loan is a simple interest loan. Yes, they will show you a form that shows the total amount of principle and interest you would pay if you make the suggested payment ever month until the end of the term. If you make double payments, you will pay less in overall interest. If you total your boat one year 1 and its blue book value is 40k, than you are out a little less than 10k, as you would have been paying on your principle since day one.

Anyone correct me if I am wrong.</TD></TR></TABLE>


Looks good from our point of view. A simple interest loan only charges interest on the unpaid balance. After each payment you r interest is charged on a smaller amount. In a sense, you are charged a smaller amount of interest on every payment.
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Ken