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Old 21-10-2012, 02:34   #1
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Cash Discount

How much should one expect to see the asking price discounted for cash in hand?

....also, I suspect this gets asked a lot, but does anyone know of a good source for repos and/or fleet liquidations?
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Old 21-10-2012, 05:02   #2
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Re: Cash Discount

Boat sales, from the sellers point of view almost result in prompt cash in their account since seller financing of a boat is extremely rare. So whether the buyer has dollar bills (or Euro bills, pounds or whatever) in hand or is ready to write a check on the spot from his own account or from a bank loan end result is the seller gets the money as soon as the deal closes.

If the buyer does not already have cash or bank financing the closing may be delayed pending bank loan approval so a buyer ready to close promptly would have a small advantage.
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Old 21-10-2012, 06:59   #3
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Re: Cash Discount

Quote:
Originally Posted by anontrolus View Post
How much should one expect to see the asking price discounted for cash in hand?
0, the sellers doesn't care where the money comes from
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Old 21-10-2012, 07:11   #4
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Re: Cash Discount

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0, the sellers doesn't care where the money comes from
Yes ..........but it can impact on how quickly a deal can be done, which is sometimes very attractive to a Vendor (which can translate into movement on price. but not always) - if only to stop a purchaser getting attracted elsewhere!.......and in addition to cutting down any delay in getting the finance paperwork signed means that no last minute surprises, like the lender deciding that the boat is only worth half the sale price (sometimes they may even be right!) or simply that the Vendor's assumption that can borrow $100k on an income of $10k turned out to be optimistic.........

........but the plus of selling to someone using finance is that sometimes it is not viewed as own money (they have not yet done the hard graft to accumulate that spare cash - and perhaps never intend to, with loan balance to be cleared upon resale).....and therefore some can be a bit more careless on price . (Lender permitting).

End of the day a judgement call for each Vendor to make, depending on own circumstances and desire (need?) to sell.
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Old 21-10-2012, 11:02   #5
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Re: Cash Discount

It really depends on how motivated the seller is, if you can take the time to know your seller and find out his / her reasons for selling, you are in a much stronger negoiating position than if you are just approaching someone on the fly with little or no information. General rule of thumb is 10% discount for cash. Often times you can render a better deal than that, if you are well informed. Better make sure that you know the vessel you are trying to purchase to obtain a good idea of the vessel's true worth. This approach works with an individual; not so much when dealing with a commercial entity, they would rather sell it to you on time and collect the interest on the unpaid principle. Used to be back in the day the dealer would fall over themselves to sell for cash; I recently was kicking bike tires in a Harley shop and inquired about a price reduction for a cash purchase and they told me they would rather finance it, this was on a new purchase, I don't know if a different rule applies for a used bike. There is deifinitely a different dynamic when dealing with individuals.
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Old 21-10-2012, 11:39   #6
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Re: Cash Discount

If you are talking about the purchase of a boat, then most sellers are going to insist on cash, or cash equivalent, bank check, etc. I would never transfer the ownership of a boat with just a personal check in hand.

Buying of "Stuff" is different, in that a seller knows the deal is done, so talking with cash can help somewhat. Of couse when a buyer tells me that he is bringing cash to buy something, I respond, " of course, I would insist on it", or something like that.

If you showed up to buy my multi-$$$ boat with a suitcase of cash, red flags would be going up everywhere.

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Old 21-10-2012, 11:43   #7
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Re: Cash Discount

The only advantage to cash in hand that I can think of is it reassures the seller that there wont be financing issues.... quick sale.
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Old 21-10-2012, 11:49   #8
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Re: Cash Discount

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Originally Posted by Cheechako View Post
The only advantage to cash in hand that I can think of is it reassures the seller that there wont be financing issues.... quick sale.
Exactly. It's not like selling your boat will hide income that is subject to income taxes (normally).
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Old 22-10-2012, 06:20   #9
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Re: Cash Discount

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Originally Posted by anontrolus View Post
How much should one expect to see the asking price discounted for cash in hand?
To summarize, don't "expect" any sort of discount just because you have cash. I don't know what percentage of boat sales are cash, but I suspect that it is most of them. It is not like home sales, where almost ALL have some sort of mortgage, and so a cash sale is unusual.

Having said that, it can't hurt to mention that you have cash in hand and will be able to close the sale quickly and without any need for bank approval. It might work as a bit of a negotiating point.

Good luck.
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