Save Money on an Overseas Yacht Purchase or Sale
Many British yacht owners unknowingly lose a substantial amount of money when using a bank to make or receive international payments for boat purchases or sales in a currency other than Sterling. Additionally, buyers and sellers often don’t realise that they have the ability to reserve money at a set currency exchange rate now and pay for it in the future. Let me explain…
Making or Receiving Yacht Payments Internationally
Do you need to pay for a yacht in Euros or US Dollars? How about moving foreign funds from the sale of a yacht back to the UK? Regardless as to the reason for moving money – or where you need to move the funds to – it’s important to realise that for every £100,000 worth of money you move, you could pay around £4,000 unnecessarily if you use a bank. Banks around the world can add a margin of around 4% more than the margin used by international payment specialist. Using a bank rather than a specialist is like buying a yacht for £100,000 and then asking if you can pay an extra £4,000 for no reason.
Aside from saving money on the cost of buying currency, you can also ensure that the value of the money you’re moving doesn’t unexpectedly change. In other words, if you need to move a medium to large sum of money within the next month to a year and you’re happy with the current exchange rate, you can reserve that rate today yet pay for it at a later date.
For example, during the month of February 2008 Mr Braithwaite contacted an international payment specialist to discuss a payment for a yacht costing €180,000 due in April 2008. Mr Braithwaite was happy with the current rate of €1.334/£1 so he booked a contract for the full amount and simply paid a 5% deposit to secure the transaction. When April came, Mr Braithwaite sent the money due (less the 5% already paid). If however, he had waited until April to purchase the Euros, he would have had to accept a rate of €1.242/£1 and pay an extra £10,000 for the yacht.
Moving Smaller Sums or Amounts on a Regular Basis
Many yacht owners moor overseas and have to pay yearly mooring fees along with general maintenance and servicing costs. When moving small sums of money on a regular basis you can benefit greatly by fixing the currency exchange rate if and when the rate is at a good level. For example, in January 2008 many Brits moving regular payments overseas secured a rate of €1.31/£1 for bi-annual or quarterly payments for a year or two. That means that as Sterling weakened throughout the year, clients were unaffected by the rate change and received a rate of 1.31 each time they made a payment.
Charles Purdy is a Director at Smart Currency Exchange Limited – the international payment specialists. To save money moving money go to: www.SmartCurrencyExchange.com/marine.htm