Bmf Contract On A New Build. Protection From Bankruptcy?

[wiltshirewonderer]

Hi

 

We have recently secured a residential mooring in London and are now moving full steam ahead on sorting out a boat to put on it. We have discovered that the price differential between new build and used is a lot smaller than expected. I also made a very bad/expensive mistake of letting my partner step on board this.

 

Anyhow, we have spoken to a few builders now. They seem to have similar staged payment plans and are all working from a BMF contract. However they suggest different things regarding levels of protection for us as a buyer. Most are saying we are completely protected as we own the boat and any materials protected. One did suggest that for 'extra' protection we could pay a deposit and then cover the interest on a loan that they would take out to finance the build (Accept them not wanting to tie up capital) with us paying upon delivery.

 

Now, in my eyes, the BMF contract still leaves us open for some level of loss even if it is as described. The chances are that at any stage we will have paid more than the value of the boats in its state of completion. However, if all was happy other than this, why would this other payment model exist?

 

I understand that if they go bankrupt I'm still going to have problems (Uncompleted boat, potentially in eastern europe, hard to protect from creditors etc.) but want to try and minimise risk if we take this route (Now looking likely), especially with the likelihood of everything blowing up in Europe the day after Mrs Merkel gets re-elected!

 

Can anyone enlighten me on how this works and what I need to look out for / protect against? I have spent some time googling but most of the content seems to be from the same sales guys I've already spoken to. I guess I could get a credit card with a high limit, but not sure if the protection still applies in this sort of situation?

[bigste]

A credit card is IMHO the best method. You will be 100% protected as far as I'm aware. I've had first hand experience of this although not with a boat.

[KJT]

Section 75 of the Consumer Credit Act 1974 holds the credit card company jointly liable for purchases between £100 and £30,000 and in some circumstances Section 75a increases that protection to £62,260 so you could well be protected if you use a credit card to make stage payments.

I would take professional advice, or maybe citizens advice or your local trading standards could provide the definitive answer.

 

Ken

[wiltshirewonderer]

Section 75 of the Consumer Credit Act 1974 holds the credit card company jointly liable for purchases between £100 and £30,000 and in some circumstances Section 75a increases that protection to £62,260 so you could well be protected if you use a credit card to make stage payments.

I would take professional advice, or maybe citizens advice or your local trading standards could provide the definitive answer.

 

Ken

 

Thanks Ken. Sounds promising and something perhaps worth looking into if it turns out protection is lacking from the BMF contract itself. Hoping that it is unnecessary as getting a card with a serious limit like that will likely be a challenge!