Selling my boat to a person and "carrying the paper" for the loan?

I am selling my boat to an individual and he would like to make payments to me instead if getting a loan. I already have a promissory note and a bill of sale. I was wondering if I keep the pink slip in my name and just give him the registration and the bill of sale? Do I add myself as a lien holder somehow on the pink slip. When you buy a car, you don't get the title till the loan is all paid off. I want to make sure the liability is transferred from me as the boat owner to him (the new owner) I will still be able to repossess the boat in case he misses a payment. Just curious and help would be much appreciated.


I own the boat outright and will have the individual list me as an additional insured on his policy. It is a Bayliner 245. If the boat is damaged, he will be liable for it as he will have a loan that he will need to pay off with me.

11 Answers

  • mark t
    Lv 7
    1 decade ago
    Best Answer

    I have got to agree on this one. Why should you hold the note? Now even if you protect yourself and are listed as the lien holder, he could trash the boat while he has it so if he defaults AND you manage to find him to get the boat back (getting it back could be a big battle) the boat could be worthless. Best to let him get a loan and you get your money.

  • Joe P
    Lv 6
    1 decade ago

    If your buyer has a home, suggest he get a home equity loan instead. He would enjoy a deduction on the interest and you would not be at risk. The fact that he wants you to carry the credit indicates that he probably does not have a good credit rating. If he did, he could get a credit union or bank loan even now during tightened credit. You are better off offering him a 10% lower price if he finds his own credit. If he still doesn't take that, he is definitely high risk. He and your boat could be long gone when you try to collect on a defaulted loan. There is very little cooperation between states on boat registrations. He would have no trouble selling it and registering it in a different state. There is no way on Gods Green Earth I would take this risk, especially in a bad economy. Make a wise decision or you are highly likely to regret it.

  • 1 decade ago

    I'm going to disagree with the other answerer's, even though I respect their advise. Mark and Captian Bill and Boating in N. VA are all respected in this area of expertise. If you've been following the current credit crisis, you should know that Banks, are not lending money at all, much less for boats, regardless of the credit worthiness of the buyer. Even if they did, the interest rate is more like an actual 11%. There are several reasons that you should consider this. I assume you'll get a down payment. Then you'll get "interest" on the balance. You'll also no longer have to pay, slip fees, storage, and maintenance, like for winterazations, yet you'll still be insured if the boat is damaged, or sunk. (Your contract should provide for this) and You would retain "the right to Repo" the boat if necessary. And, yes you retain the title until paid off. Many home owners would love to do this if they could sell their home, even if it's a second mortgage. If you trust the buyer, and make sure you cover all contingencies, it's a minimal risk, with a big upside for you, particularly if your no longer using the boat frequently. I've done this before and recently sold a boat like this, and got close to my asking price. Brokers that I talked with advised a 40% reduction in price, because "nothing is selling". Good luck!

    Edit 1/8 Thanks Boating in N. VA, for your comments. I'm not ignoring jtexas, I just thought he and I were of like minds. Thanks for all of your input.

  • 1 decade ago

    You've got three solid answers with some great advice already but I have to agree with Capt. Bill that you shouldn't do this. The reason I say this is that this individual probably would not be able to get a loan thru a bank for the boat. If that is the case why should you, even though you want to sell the boat, take the chance that he's going to default?

    If you do though please make certain that you have all your i's dotted and your t's crossed on paperwork. You want to make certain that should he default you have easy recourse to recovering the vessel and trailer if so equipped. careful with this one and the biggest suggestion I can give you is to make certain you get a decent (20% maybe) down payment from the buyer. At least that way your expenses are covered if he elects to give up the boat and making payments to you.

    Good luck!

    ADDED NOTE: thanks to Richard C for the kudo and for his post. Threesheave also chimes in with great advice too. This decision does come down to 1) how bad you want/need to sell her and 2) how comfortable you are with the buyer and the possibility of recovering the boat should he default. You definitely want to run a thorough credit check on him. It's a tough call and one only you can make. We all wish you the best of luck with it!!!

    Source(s): 20+ yrs of boating...
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  • 1 decade ago

    I liked everyone's answers, even though they didn't all agree.

    The bottom line is, how badly do you want to sell your boat? If you have a dire need to get out from under it, then carrying the loan may be the only quick way out.

    Like Richard stated, how much trust do you have in the buyer? I personally wouldn't carry a loan on a vehicle unless I knew the individual very well.

    I'd say that in addition to all the other great advice above, you might consider having a good credit check run on the buyer. It would be money well spent. Otherwise, you are taking a certain amount of risk, and that is totally your decision.

    CYA........cover your......(stern)

  • 1 decade ago

    My first suggestion is do not hold the loan. Let him get a loan at the bank or from someone else. If he can not then sell to someone else.

    If you decide to float the loan, transfer the tile o the new owner with you as lien holder. Have a written agreement as to payments, insurance and that you offer no warranty. Also make sure that it states that if he defaults on the loan that you will take the vessel back.

    Good Luck - Boat Safe!

  • jtexas
    Lv 7
    1 decade ago

    In most states boat titles are done through the fish & game, or parks & wildlife, or whatever agency has jurisdiction over the waters, but they have title procedures and forms pretty much like the DMV has for car transactions.

    You should be able to just fill out the paperwork with yourself as lienholder, he'll get some kind of certificate of ownership (like a title, only not) which enables him to insure and register the boat in his name, and you will get a new title showing him as owner and you as lienholder, which you will retain until the loan is paid.

    Don't forget about the trailer.

  • 1 decade ago

    If you own the boat you can add him as a registered owner and you the legal. If you dont own it then you just owe the bank and he owes you. This is pretty risky and not many people do it. If for some reason the boat is damaged you owe and he does not unless you go t court and all. If he decides not to pay you still owe or your credit is hurt not his.

    What kind of boat is it?

  • 4 years ago

    A typical white person is a human being who has been blamed for many of the problems of many people who have not learned to get up and make something out of their life. If anything goes wrong it is the fault of the typical white person who cannot even use the word white without being accused of being racist. They are the ones who live in the communities that are very diverse. They are the ones who go to churches that are open to anyone from any walk of life. They are the ones who are taught to love thy neighbor and take blame for all the problems of those who hate anyone that seems white. Its a hard job being part native American and German and looking white and paying the price for it. God Bless all humans. Most churches will teach this. They do not see in colors.

  • 3 years ago

    I don't really know how to answer this

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