ARTÍCULO PATROCINADO
As sailors, we prepare for the unexpected. It’s why our first rules include maintaining a proper lookout; check the forecast before you leave the dock. Safety first.
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The same should apply to your currency exchange when buying a yacht. There are particular risks that come when buying a boat overseas. Large sums of money, staged payments and, most risky of all, often a long closing period.
With surveys, sea trials, negotiations and documentation, weeks will often pass between your offer on a yacht overseas being accepted and finally paying.
A lot can happen to exchange rates during that time. In the past year, the US dollar has lost almost 12% to the euro. Sterling has lost 5% to some major currencies just in a few weeks.
Sure, your currency can gain too, making a purchase cheaper than you expected. It’s a risk, and if you’re the kind of person who likes to go into a casino and put a few thousand down on red or black. No, red… – then you might enjoy that risk.
Maybe you think you can predict what will happen to exchange rates. How hard can it be? The bad news is that the currency markets are not as changeable as the weather – they’re much more changeable and less predictable.
Governed by economic and political news from minute to minute, there are no supercomputers forecasting what your pounds will be worth against the euro or dollar in the next minute or next month.
Protecting your yacht purchase
But there is good news. Unlike most banks or online FX firms, at Smart Currency, we can fix your exchange rate until the purchase is complete.
So, imagine you’re buying a €250,000 yacht, currently sitting in San Tropez (Well, we can dream, can’t we?), which at today’s exchange rate costs £215,000. With a forward contract from Smart Currency, you can lock in that rate until the purchase is complete and the danger is passed. Total peace of mind, while you plan your forthcoming adventures on the high seas.
If you don’t lock it in with a forward contract, until the purchase is complete, you will have no clue what the boat will cost in pounds when you come to pay. You may spend a lot of time checking the news.
There are certainly risks right now. President Trump’s policies have been blamed for weakening the dollar, but on the UK side, this spring could well see an attempt to change the prime minister. And there are risks of recession, war in various parts of the world, all potentially causing currency volatility.
If the pound lost 5% to the euro, that same yacht would suddenly cost around £12,000 more.
Don’t wait for the storm to hit. Give Smart Currency a call today on +44 (0)20 3953 7099 or get a quote, to discuss your purchase. Oh yes, should have mentioned, at Smart Currency your account manager will be at the end of the phone when you need them.