One way to purchase a boat at a bargain price and is most probably in good condition is by aquiring one that has been repossessed. This type of craft often sells for less than the original price—40% to 80% less. The boat status of being repossessed means that the boat loan went unpaid by the previous borrower, and that the bank then took control of the vessel. This situation frequently occurs soon after a purchase is made. Many struggling borrowers are unable to spend much time on boating, because of other obligations, leaving their boats in good shape and repossessed in the first year of ownership—and available for purchase.

Indeed, repossessed vessels may well be sold for low prices because banks hope for quick turnarounds. This is partially because lending institutions must pay for storage costs while they own boats, and these expenses can be substantial.

In addition, keeping a boat prevents a bank from earning money, and can even make it lose money, especially if it is dealing with the cost of an unpaid loan. Therefore, the bank benefits the most from selling a vessel that has a loan that has not been paid off, as soon as possible.

The process of selling a repossessed boat generally involves the bank holding an online or in-person auction. Dealers specializing in these types of vessels are most common at such events. They will, however, charge individuals 30% to 40% more than they pay at auctions, so boaters should strongly consider attending auctions themselves. Find them by calling local lending institutions, such as banks. Note that, when making an inquiry, the first person who answers the phone may be unfamiliar with the reason for calling, so keep asking until a knowledgeable employee is found.

If interested in making this type of major purchase, begin searching early and research extensively. Find out which boats will be on the auction block, and study whether there have been major issues on boats with similar models and years. And, most importantly, thoroughly inspect a boat of interest before the auction, or have a qualified boat mechanic do so.

This is especially important because buying at an auction provides no warrantees or guarantees, including almost never being able to return a boat for-sale. This is even the case if the vessel would need to undergo serious repairs, or if it cannot even be repaired. If these difficulties are discovered after purchase, the chance of getting help from a bank is very low.

One option is to do your research in person, by visiting other boat auctions before being prepared to bid. This will help increase familiarity with the auction process and the boats’ values. This will also raise personal confidence. In addition, make sure to determine a maximum bid. This will help a bidder avoid becoming emotional when bidding, and spending more than what is affordable.

Follow these tips to save money and buy a boat for adventures in the future.