Yacht prices defy logic

[Simi 60]

Originally Posted by sailorboy1

Sounds fun, ........... not

No shortage of fun, just no wasteful spending or stupid decisions included with that fun.

[savoir]

Originally Posted by jsc7

I am completely baffled by yacht prices. It seems like new, well-known brands will sell for prices fantastically higher than older boats from unknown makers, even if the older boat is in good condition.

For example, here is a 90 foot pilothouse yacht, apparently in excellent condition for $650,000:

1990 Broward Raised Pilothouse Motor Yacht Power Boat For Sale - www.yachtworld.com

I have seen 30 foot boats that sell for that much.



What is the logic here?

The logic is that buyers for used 90 ft boats are pretty thin on the ground at the best of times. Those with plenty of $$$$$ prefer to buy new. The charter market is the main buyer but there is no way they will touch a boat that old. The result is that the price falls and falls until there is no one left but the bottom feeders.

$650,000 looks about right.

Compare with this boat which has been for sale for 6 years.

http://au.yachtworld.com/boats/1994/...s#.Wi3V3d-WbIU

[Mike OReilly]

Originally Posted by Simi 60

And fools and their money are soon parted.

I have never made a purchasing decision based on heart.
Logic and numbers only.

This would make you a pretty unusual human Simi. Ample research shows almost NONE of the decisions most people make are based solely on logic and numbers. Interestingly, most people believe they are being logical and calculating, but evidence shows this to be a false belief.

But there are always outliers. You could be one of them.

[CSY Man]

Originally Posted by robert sailor

Hi there,
From a financial side I can't think of a single thing that would make buying new an attractive option but maybe you can school me. The first year depreciation on a new boat would bring tears to an accountant's eyes. R

Depends if you buy the new boat at the right price..
I bought new last year, brand spanking new with 0 hours on the motors: A 2016
Glacier Bay 2770.
Sold it 18 months later for $9,500 more than I paid.
(Not a profit as I paid sales tax and brokers commission)
Ran the boat 190 hours and made a few $$ chartering.
Sold it just before Irma and still in shock that I got full asking price.

Will not buy a new boat again however, too much was wrong with it, sloppy build and poor factory support, although the dealer did all the warranty it was still a pain in the butt. Let the first owner work out al the bugs, then buy the boat used.

[nautical62]

When I bought an old classic plastic twenty some years ago, it cost 200/year to insure and $50/month to store. Now, it costs about 6 times that. Yard work regulations, labor, launch fees, etc. also make the cost of ownership notably more expensive. Old boats may be cheaper than ever to buy, but they are not cheaper than ever to own.

I got out of boat ownership a couple years ago, not because of the purchase cost of boats, but the cost to maintain them. When I sold my last boat, I was happy to negotiate simply because the monthly costs were so high it made sense to unload it as quickly as possible.

[Tornadosailing]

Originally Posted by savoir

The logic is that buyers for used 90 ft boats are pretty thin on the ground at the best of times. Those with plenty of $$$$$ prefer to buy new. The charter market is the main buyer but there is no way they will touch a boat that old. The result is that the price falls and falls until there is no one left but the bottom feeders.

$650,000 looks about right.

Compare with this boat which has been for sale for 6 years.

1994 Chantier Navale N2A Shipyard 105 Custom Sail New and Used Boats

Yup. Compare that to a top of the line Mercedes or BMW. People who can afford a $120K car are not going to buy a two year old model for $110K. Or $100K. The price keeps falling until someone is willing to pay.

Good for those who are willing to wait. I bought a 3 year old low mile BMW that sold new for $96K for half price. Taking that kind of hit on a car would make me cry, but just like a boat, those cars can be used for tax write offs and most are leased for executive company cars.

[sailorcherry]

New vessels are all fluffed up because of financing options (and the charter market somewhat too), Imo.
So new boats are exponentially more expensive than older boats, although not exponentially better, because of lending guidelines. Ask a boat financing person - things start drying up at 20 years and last I checked especially at 30.

Even if I were rich I would never buy a new boat. Things still break or were possibly built to inferior standards and worse, with inferior materials vs many older vessels (60's-80s era).

[robert sailor]

Hey my opinion was just based on the money side of the equation and what I thought made financial sense to me because it would be very cool to have an unlimited budget and buy any boat you wanted. The downside is that I could buy a new boat, with limits of course but it's just not in me. I did buy 2 new boats years ago and it was fun. These days I'd rather just carry liability insurance and know if I ever really stuffed it I could afford to just walk away, crying mind you. Boats do pick your pockets but if your really into it they give you a great deal of enjoyment and in the end they shouldn't have to make financial sense because you knew going in that it was never going to happen.

[shadow]

I've got a great example for the crew here.. I love hinckley yachts and most of the ones that are even built in the 80's still go for anywhere from 300K to 900K for somewhere around 40 - 45 feet. You can get a brand new Bene or jenny for cheaper and they are brand new.. But, if you love and appreciate the build, look and solid build quality as well as true cabinet making, etc.. Then, there is no contest.. There's always a huge difference when you take into consideration the heritage of the builder, the quality of everything, etc...

I was on a friends hinckley a while back and it was a sou'wester and they are gorgeous!! I think a new one is nearing 2 million.. may be nuts, but it is dripping of solid class and build reputation..

No, I am not getting any kick-backs from this PSA.. LOL

[Crustyfisherman]

It's good livin any time you can marry economics, philosophy and psychology in a boating forum! The OP cast some good bait for sure. Some people definitely bit, and looks like they subsequently descended into the weeds.
Anywhoo, great timing of this question; check out the 2017 nobel prize winner in economics. To help out those with limited attentions spans, Richard Thaler schooled traditional economists by considering 3 psychological traits which repeatedly influence our decisions: limited rationality, individual perceptions of fairness, and lack of self control. Sound like buying a boat?
Further reading: https://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2017/popular-economicsciences2017.pdf

[sailpower]

Originally Posted by shadow

I've got a great example for the crew here.. I love hinckley yachts and most of the ones that are even built in the 80's still go for anywhere from 300K to 900K for somewhere around 40 - 45 feet. You can get a brand new Bene or jenny for cheaper and they are brand new.. But, if you love and appreciate the build, look and solid build quality as well as true cabinet making, etc.. Then, there is no contest.. There's always a huge difference when you take into consideration the heritage of the builder, the quality of everything, etc...

I was on a friends hinckley a while back and it was a sou'wester and they are gorgeous!! I think a new one is nearing 2 million.. may be nuts, but it is dripping of solid class and build reputation..

No, I am not getting any kick-backs from this PSA.. LOL

Excellent observation.

The buyer for that classic Hinckley is not the same buyer for the new Beneteau regardless of dollars. Not a darn thing wrong with that.

It would be a boring world if every one bought the same boat. As in so many things in life, diversity makes life interesting.

The important thing is to respect all points of view.

[savoir]

Hinckley yachts are hugely impractical and mostly shunned by the market. The only people who buy them are rich old guys who want a showpiece day sailer even if it is 50 ft long. Their prices are ridiculously high and the people keeping them that way are those prepared to pay a premium for the prestige.

The Hinckley range of new sail boats barely sells at all. What has been a rip roaring sales success is the range of picnic boats.

[valhalla360]

Originally Posted by Tornadosailing

I was actually lined up to buy new at one point. It all depends on your tax situation. If you have to pay enough in taxes, you can use the new boat depreciation (on a bonus depreciation schedule) to offset enough of the tax burden to make it attractive. You will never get it to be a money maker, but it's possible to make it a wash. Pay the money for taxes, or pay the money on boat expenses. I'll take the option that comes with a boat.

This is the oldest lie in the book regarding rich people saving money with taxes.

No sane financial adviser will recommend paying $1000 to save $250 (or whatever it works out to be with your tax rate), which is essentially what you get when you take the depreciation.

Now if you are going to buy a new boat anyway, it make sense to take the $250 but to spend more to save less, doesn't work out.

[coastalexplorer]

I really do like that comment By SAILPOWER
(could you excuse a minor edit?) If one can afford it, buying new can be a very attractive option.

IF some people did not buy new boats and keep replacing them with bigger and better boats. There would be no end product to purchase for those who might not understand all the costs and expenses of buying used.

There is a great deal of truth to this, Unless there is the emotional commitment to restore a particular classic yacht?

There is very little point in dealing in the second hand market. The cost of refit of a cheaply acquired hull will keep adding up until the day you launch it. At which point you will realize that you could have bought a new boat on a bank loan and been sailing all those months and years: For about the same amount of money.

The reasons why this happens are numerous. The most obvious one is that depending on the size of the vessel it takes between 20 and 50 skilled workers about three months to a year. To build a new boat in a well equipped workshop. As a manufacturing company they buy all supplies and fittings at wholesale prices. IF you take this on your self. unless it is in your own back yard. The cost of marina fees will add up to a very significant amount. and your travel expenses between your residence and the marina will add up to about what all those employees paid for driving to work and home again during the original build. I nice marine store might give you 10% off of retail? this does not cover the purchase taxes in most areas. If you do not have enough 'spare time' to work fast enough, the shelf life on resins, sealants, paints, and varnishes will expire and result in the cost of replacement, unless you are an obsessed accountant you will quickly loose track of how much you spent on, bolts, screws, & nails, when you are all done with your boat building hobby, The market value of your creation will never repay what you spent; Let alone pay you for your time. But there will always be those who feel sure that they can win at this game.
For those who buy something used that is still in some sort of usable sailing condition, If they are not particularly fussy about the deficiencies and tolerate them. The requirement for repairs and upgrades will happen. So the situation is essentially the same. They are just on the optional payment plan. Most likely in denial of the true costs.

So I do not believe yacht prices defy logic, because logically its an expensive game, If you have to ask the price you probably can not afford it.

[ranger58sb]

Originally Posted by Crustyfisherman

Anywhoo, great timing of this question; check out the 2017 nobel prize winner in economics. To help out those with limited attentions spans, Richard Thaler schooled traditional economists by considering 3 psychological traits which repeatedly influence our decisions: limited rationality, individual perceptions of fairness, and lack of self control. Sound like buying a boat?
Further reading: https://www.nobelprize.org/nobel_pri...iences2017.pdf

Heh... good first post.

Originally Posted by Simi 60

I have never made a purchasing decision based on heart.
Logic and numbers only.

Originally Posted by Mike OReilly

This would make you a pretty unusual human Simi. Ample research shows almost NONE of the decisions most people make are based solely on logic and numbers. Interestingly, most people believe they are being logical and calculating, but evidence shows this to be a false belief.

But there are always outliers. You could be one of them.

I'm guessing maybe Simi is an example of that "limited rationality" thing, given he used logic and numbers... to buy a BOAT.

Not at all meant as a criticism; just struck me that boats and logic aren't usually considered compatible.

That said, once the decision to buy a boat takes hold... it certainly makes sense to proceed with a detailed analysis of candidates and how they'd fit one's own financial situation. And how they'd contribute to one's own intellectual income.

The latter probably influences folks who (can) buy new...

As does the ability to pick preferred options, colors, etc.

-Chris