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Boat Financing
Options for financing your boat in France
After determining the particular model you want to buy, you will also need to choose a lender.
When it comes to financing a boat, you have a few options.
- Get financing through your boat dealer.
- Get a loan from your bank.
- Get a boat loan from a marine finance lender.
Most yacht buyer do it through their boat dealers because boat dealers have experience in this area with boat loans and paperwork.
None the less, some buyers will decide to secured loan at their local bank. This could lead to a lower interest rate, but the downside to this option is that it could also increase paperwork. However, it’s worth considering this route since structuring the agreement in this manner may afford you certain tax benefits.
In this piece, we’ll cover the basics of boat financing and zero in on the French L.O.A.
French Boat Leasing (LOA): what is it?
The Location avec Option d’Achat (LOA), or leasing with a purchase option, is a French financing solution for acquiring new and pre-owned boats on which French VAT has yet to be settled. Working with France’s second largest group of banking in terms of market share, we offer a complete range of boat finance.
A lease-purchase agreement is between a potential boat owner (the lessee) and a financing institution (the lessor). The specific make, model, and specifications of the boat are all chosen by the lessee from their preferred shipyard or dealer. With your contracted terms, this boat financing solution, tailored to your needs, will let you lease a boat and buy it at the end of the contract if you so choose.
Check out our boat financing calculator.
A new an used boat financing solution
Leasing allows to finance all sorts of pleasure craft, both new and used (VAT included): from any sort of sailing vessel (multihulls (catamarans, trimarans) to monohull (centerboarders, keelboats, cruisers) or motorboat through any type of rigid inflatable boats.
This type of financing — open to European nationals, for boats flying French or English colours.
The leasing agreements for boats can also include financing for, in particular, equipment installed on board.
Financing of a new or used boat through a leasing scheme is possible if it is taxable in terms of VAT.
Understanding the cost of a Boat Lease-Purchase Agreement
The lessor will calculate the total cost of a boat lease-purchase (leasing) agreement according to a few factors:
- The price of the boat, which may include equipment.
- The down payment that the lessee gives at the start.
- The lease term (36 to 180 months).
- The amount of the purchase option amount at the end of the contract.
- Coverage with our partners or with your own insurers.
- Applicable laws and interest rates.
The contracted boat lease total will include:
- The initial deposit (20%–50% of the boat’s purchase price, including VAT)
- The total of all the installments payments during the lease period.
- The amount to purchase at the end of the contract
- Optional insurance premiums.
The lessee will be given a complete payment plan by our partner, including insurance and taxes.
Customizable Lease-Purchase Options
Lease-purchase arrangements are flexible:
- You can also do a shorter lease to change the installment amount.*
- Advance payments may be made in part.*
- Onboard equipment: Equipment can be added to the financing during the lease-term.*
- The lease can be assigned to a new lessee.*
*Note: subject to partner approval, contract terms and current rates.
End-of-Lease Scenari
As described in the contract, boat leasing contracts can be terminated once the lease period ends. However, there may be a fee for early termination.
At the end of the boat lease
If you have already paid the last instalment the leasing contract gives you two possibilities:
- You do not exercise the purchase option: you return the boat to the lessor.
- You exercise the purchase option, and become the boat owner.
Early termination
If you have not yet completed the final payments and you decided to end your boat rental early for the situation change:
- You either seek another lessee who wants to assume the leasing agreement with the lessor as per the terms of the original agreement. That means you would not have to pay any unpaid instalments.*
- Or you pay accrual instalments and purchase option to date, and thus become the boat owner. You can then sell the boat.
*Note: *Considered and subject to acceptance of that person’s file by the lessor and, it’s after expiry of the legal withdrawal period.
Disclaimer
The information provided is for information purposes only and is not legal, tax or professional advice.
We will use all reasonable endeavours to ensure that the information is correct, complete and up to date but the law relating to boat purchases, VAT and customs matters in France and the EU is very complex and is also changeable. You are strongly advised to seek specific legal and tax advice from a suitably qualified professional (such as a lawyer, solicitor or maritime tax expert) before making any purchase decisions or entering into a transaction. We accept no liability for any reliance placed on this information.
You are strongly advised to seek specific legal and tax advice from a suitably qualified professional (such as a lawyer, solicitor or maritime tax expert) before making any purchase decisions or entering into a transaction. We accept no liability for any reliance placed on this information.
French Riviera yacht brokerage services based in Antibes. ECPY member and subscriber to e-MYBA. A 5 stars ranked company on both Google and TripAdvisor.