Used Boat Prices

[zerubb]

A few of us were having a discussion in the local yacht club last night; regarding current used boat prices in the US. I realize this is a VERY general question but I would like to get members input on the following: What would be a good rule of thumb for purchase price compared to asking price on a well found boat in the 35’-40’ range for say $100,000. Which states are best for bargains in the current economic climate? I repeat these are VERY GENERAL QUESTIONS. I know different brands or even different models of the same brand can be vary enormously as some brands/models hold their value much better than others, I also realize there can be a great deal of difference between the final selling price of two apparently very similar boats depending on sellers circumstances, equipment levels etc. Nonetheless I would appreciate members input.

[nautical62]

The problem with trying to use a percent of asking price is that many boat owner's have very unrealistic views regarding the value of their boat, so asking prices for similar boats may vary greatly. When I did my last boat search in Florida a couple years ago, I saw selling prices vary from 95% to 50% of original asking price. I think a better predictor is knowing the rough market values for used boats of a given condition.

I looked in Florida, due to the many boats for sale there as well as proximity to the Bahamas where I wished to sail.

One possible advantage of looking at used Great Lakes boats is they are on the hard half the year or more.

[Palarran]

There was a similar thread here a year ago and I had posted that 30 to 40% off the asking price was realistic. Well, as it turns out, I paid full asking price two months ago. But, the asking price was 40% less then other models of my boat so, it was a great deal (IMO).

If your actually in the market, you have to spend a lot of time to find the right boat at the right price. After shopping for a year, you will know what that is. It only took me 2 hours to agree to the full price once I actually saw my boat.

[Richard Jordan]

When you price a yacht, the general guideline is to add 10-20% to the market value. This means that if a yacht is correctly valued you would expect a 10-20% discount off the asking price. In this hard market cycle, the discount is about 20%. At the bottom in mid 2009, yachts were selling for 60 cents on the dollar. These are averaged guidelines, and individual sales will widely vary.

[Pete the Cat]

I agree with Palaraan on the response that "it depends". I would say that it is a bit dangerous to getting a quality boat for any purchaser to adopt a "% of asking" that you offer. You should offer what the boat is worth. Here is a story..... a sad one.....

I had a friend whom I was helping find a boat. He narrowed the list to a few good boat models and a price range. At some point, he found a "deal" on one of the boats. Being a relatively inexperienced boater, he arranged to buy the boat on price and esthetics as he saw them--got the boat for 30% under what they were selling for on Yachtworld. The boat looked OK but the surveyor did a very poor job of surveying it. It was clear on closer inspection that this boat had been owned by someone who did no preventive maintenance or upgrades in the 15 years of ownership. I went to help him get it ready to launch and here were the problems: the pedestal was rusted to oblivion under the cockpit sole (the surveyor somehow missed this) $2000--including labor, the strut was loose and a bear to retighten and reglass (another survey failure) $1000, a clogged and extremely rusted and crusted heat exchanger that would have been a problem (we spent about a day cleaning and getting it all blown out--I would say this would have been $500 worth of work at a minimum). all the through hulls were frozen open (surveyor noted this, but underestimated the costs of replacing a couple that could not be freed up), the standing and running rigging was on its last legs and needed immediate replacement ($2000), the sails were rags and could not be used (figure $5000), the hull was dulled by poor maintenance to the point that it is questionable whether it could ever be brought back without paint, the packing gland was completely frozen solid, which required the coupling to be replaced which required sawing out the shaft, the cutless bearing was iffy (So we have another $2000 here in the drive system), the interior was smelly, and the covers on the cushions were original plaid from the early 80's. No modern electronics or electrical systems--old ferroresonant charger that did not work. Of course all new batteries.....etc......

So he got a heck of a deal, right? By the time he got this boat to the water for the first time he had put nearly his purchase price back into the boat--so he could have paid substantially more for a better maintained model of this boat.

I would suggest anyone shopping for a "good deal" on a boat needs to think that the "price" is the most fungible variable based on "value" to you if you actually intend to use the boat. In my experience of helping my friends buy boats: Well maintained boats of a particular model are generally underpriced, even if they are substantially more costly than the average. Poorly maintained models of a production boat are very often overpriced if you figure what it is going to take to get them to be safe and serviceable. This makes coming up with some % rule about offering vs. asking price a bit of a dilemma. It is certainly true that some owners have an exaggerated view of the value of their boat, but many buyers do not see the value in paying more for a well-maintained and consistently updated vessel--to their own eventual education and sorrow.

Don't ask me how I learned this lesson.

[dcstrng]

Originally Posted by Pete the Cat

I agree with Palaraan on the response that "it depends"... I would suggest anyone shopping for a "good deal" on a boat needs to think that the "price" is the most fungible variable based on "value" to you if you actually intend to use the boat...

I’ve bought high market (naively) and way low market (with great hope… at least for the moment), but I think what you seem to imply is well worthy remembering… the selling price is what a ready, willing and able buyer will pay – nothing more or less… consequently a knowledgeable buyer with a disinterested/panicked seller can make for some deals well below the mythical market – reverse the variables and you can inadvertently end up skewed into never, never land… Certain brands of course develop certain reputations and that drives a certain price consistency, but the older the boat the more likely that the condition and perception of the individual vessel will influence the price at least as much, or more, than any notion of blue-book pricing or whatever… Especially in the consumer boats (price is no indicator – varies from four figures to well up in the hundreds of thousands), brokers seem to try to foster the opposite mindset, but I think they largely capture the so-called average, without revealing to the potential buyer what the spread of the two-standard deviations actual might be (assuming they have any notion, which many do not…). It’s largely just what a ready, willing and able buyer will pay… (Notice, it doesn’t mean what a knowledgeable/parsimonious/competent-DIY – etc -- buyer might pay… occasionally a far different equation…)