Join Date: Jun 2008
Location: Tampa, FL
Thanked 32 Times in 32 Posts
Rep Power: 9
Re: What Is A Boat Really Worth?
Julie, I think banks go with NADA because it is free and easy to access.
Having worked in the mortgage industry, I have some idea of how underwriting a loan works. My guess is that the only reason they use NADA is simply carry-over from the car loan industry.
NADA is well known and well respected as a source of useful, accurate information when it comes to underwriting car loans. The people who are responsible for underwriting boat loans desperately want something similar, which takes most of the guesswork (and therefore the risk) out of approving a loan. They don't actually have anything that is as accurate as NADA is for cars, so they grasp at the next best thing.
When it gets right down to it, it is a CYA sort of thing. If the loan goes bad, the underwriter hasn't put his neck on the chopping block. He can always say to his boss, "But we only loaned him the amount that NADA said the boat was worth!"