Interest rates are the lowest they've been in 40 years," says Lynda Kemppainen of Trident Funding Corporation in the Eastport neighborhood of Annapolis. "There's low and then there's lower. The lenders are offering more products so you're not stuck with your typical 20-year fixed rate ptograms, although those are available, too. The lenders have gotten more creative, offering variable rate products, so, for instance, a buyer can get into a loan for $150,000 and up at only 4.75 percent for three years, and then go to a variable rate. These are some really aggressive low-rate programs. People are buying boats, and people are refinancing, too. It's a great time to refinance," she advises. "If you've taken out a loan in the past three to five years, you'd be crazy not to look into refinancing."

David Trostle also sees low rates spurring boat sales. He owns Sterling Acceptance Corporation with his wife, Karen, and started the company in 1987 in Edgewater on the South River. "People say, with the economy the way it is, the boat business must be horrible' but we're not seeing that," he reports. "The pace has remained steady for quality boats, both power and sail, and in particular, the trawler market. Serious boaters who have chosen boating as their main recreational activity are continuing to spend their discretionary dollars to buy boats and boating products, and low rates mean they can afford to purchase more boat than they could have before. We see both new and brokerage boats selling."

Trostle advises the boat buyer to exercise caution when shopping for a loan. "An adjustable program may be desirable if you understand that the initial lower monthly payment is attractive. However, you should be aware that at some point, you're going to have to change out of that program into a fixed-rate loan, and, at that time, the rates may be substantially higher," he cautions. "Some adjustable programs do have a pre-payment penalty within the first year, so you need to be aware of all the parameters of the loan before you sign. Whoever you get the loan from, be sure you get a letter or documentation outlining the terms of your loan approval in detail, and any fees associated with your loan. You don't want any surprises," Trostle warns. You can see some more buying tips on the website,

But finding a great rate on a boat loan is only half the story. You also need to find affordable insurance, and as you shop around, you'll find that rates are on an upward trend.

As Janet Brown, who owns Anchor Insurance Agency in Deale, Maryland, with her husband, Charles, explains, "I'm finding that people are still buying boats and still insuring them. Rates have increased over the last several years in the Chesapeake Bay area, not outrageously, but enough for the customer to notice. The industry is still strong, more so than other lines of insurance," Brown says. The 9/11 catastrophe hasn't affected the recreational boating industry as it has every other aspect of the insurance business, she says. "The boating business just goes on. Even with recessions, we may see some decrease in sales, but people are still buying."

Ms. Brown advises you to buy insurance for your boat from an agent who specializes in recreational boating. Her 20 years in the business have taught her to listen to her customers to provide the best policy for the best possible price. For instance, she says, "You want to get an agreed value insurance policy rather than an actual cash value policy, because agreed value means that in the event of the loss, you'll get what you've insured the boat for. If you insure the boat for $55,000, then you'll get just that. Otherwise, they'll depreciate the boat's value for age. An actual cash policy is cheaper, but it's not as good in coverage. And, a lot of people don't realize the difference."

Scott Stusek of Jack Martin & Associates in Annapolis reports that there's been an increase of about 15 percent since the reinsurance market has had its affect on the market because of natural disasters like hurricanes and man-made catastrophes like 9/11. "We've been loosey-goosey with low rates for seven years now," he explains, "but now we've got a hardening of the market."

Like other segments of the insurance industry, recreational marine underwriters will reinsure a portion of their assets to protect them from catastrophic loss. "If they have a boat worth $600,000, they'll take half of that value and buy a policy from somebody else for the balance," Stusek explains. "Hurricane Andrew was a $20 billion problem. It was the biggest natural disaster up to that time. The World Trade Center loss was a $100 billion problem and the amount is continuing to rise. If we get another Andrew this year, it could be curtains for some of these companies. They've got to get more money from premiums, and they've got to limit their risk, so now any area south of Cape Hattaras is going to be considered wind storm territory, especially south Florida. There are five counties in southeast Florida where insurance for boats is getting harder and harder to get. And the Caribbean market is getting tighter and tighter, especially during hurricane season."

This won't affect you if you plan to stay in the Chesapeake, Stusek says, but if you want to "live the dream—sell everything, buy a boat and head to the Caribbean—well, that puts you right in the wind storm area and the carriers aren't very interested in providing you coverage. That's having a pretty dramatic impact for those who keep their boat down south—unless they have a full-time captain or documented caretaker arrangements."

The key is to tell your insurance agent what you're going to do for the next year so he can provide the best coverage with a U.S. carrier, Stusek advises. "You can't go to the insurance commissioner if you insure with a foreign carrier." Getting coverage for the Chesapeake is easy, but if you're selling the house next year and moving to Florida to live on the boat and cruise the Bahamas, you need to plan ahead or you might find yourself unable to get coverage, he cautions.

"Plan ahead, talk to as many people as you can, and understand that a resume of your boating experience will put you in a better position with an underwriter," he says. "They're not shutting down completely, but they are restricting severely."