Boat Depreciation Amid Increasing Prices

[LF4]

Originally Posted by nickfox45

I was also at the Annapolis show and saw that Bali you mentioned. Seems like a great boat if you never left the dock or were only traveling in good weather. I left not liking the setup. Really liked the FPs though!

As someone of a similar age, relatively new to boating (a few years in only), who also dreams of one day living aboard a cat, I just don't see how the depreciation math will ever justify buying a new boat OR putting one in charter if your goal is to liveaboard in 5-6 years. There will always be boats for sale, and if you're patient you will find one that's been well-cared for. The depreciation curve is just crazy. A new boat is a luxury, not a necessity.

FWIW, I also had one of the sales guy tell me that the cost of ownership of one of these new cats 10 years from now would roughly end up equalling the cost of buying one new now. He's obviously trying to make a sale of a new boat now. But if he's not full if it, that's equally concerning!

Yeah, that could be the line to get people to sign up for a new boat now. Which is something I really do NOT want to do. I do want to look after the pocket book and find a way to sail, often, and for the best value.

I believe it will be the used market, almost certainly. Something I can put on the water in Philly and at minimal expense.

How did you get your start?

[LeeV]

I was also there, as we have been at every show from here to Miami, but I’ve never seen the depreciation you’ve mentioned.

A new Leopard 45 (just a made up example) sells for 750k and then two years later sells for @ 404k? Not on this planet.

We’ve been looking for about a year now, and keeping track of prices and boats in our range about five years, but we’ve never seen that. Just be cautious...

Good luck,

[john61ct]

Originally Posted by LeeV

A new Leopard 45 (just a made up example) sells for 750k and then two years later sells for @ 404k? Not on this planet.

Are you saying that is a high estimate? Or low?

[LeeV]

Originally Posted by john61ct

Are you saying that is a high estimate? Or low?

I’m saying I’ve not seen 37 or 35% two year depreciation on any new vessels from 40 - 46’.

[Sand crab]

On the other hand boats just about bottom out in depreciation after 20 years or so. There are nice well kept and desirable older cats that still have lots of life in them. You would have no big depreciation worries and that boat might just about hold it's value over time. The trick is to find the right one.

[john61ct]

Originally Posted by LeeV

I’m saying I’ve not seen 37 or 35% two year depreciation on any new vessels from 40 - 46’.

And I still don't know whether you mean you've usually seen lower, or higher.

[LeeV]

Originally Posted by john61ct

And I still don't know whether you mean you've usually seen lower, or higher.

Oh my. Have you seen a 750k brand new cat go for 404k two years later?

No. More like 680 - 700 at best lately.

[Tillsbury]

Originally Posted by LeeV

Oh my. Have you seen a 750k brand new cat go for 404k two years later?

No. More like 680 - 700 at best lately.

Don’t forget that a “750k” new boat will have cost north of 900k by the time you sail off in her...

[FlyingScot]

Way too many variables.

Purchase with intent to charter is only viable IMO IF you plan to charter multiple times per year on similar boats for the next 5 years anyways. Most people don't fall into this category due to costs associated with travel, especially with kids.
Flights for 4 people 4 times per year. About $500-1000 per person. Charter weeks don't usually start on days that allow cheap flights (ie. Tues/Wed) so expect pricier flights or adding hotel stays to the mix. Also consider lost income during all these vacations.

Charter service might make sense for a couple who love sailing, plan to retire in 5 years, kids grown, etc and they like chartering boats multiple times per year. 5 years is a long time. 5 years ago you had one kid and pregnant wife. 5 years from now your kids will be a lot different than they are today.

Recessions in the US, France or South Africa could change everything.

Currency fluctuations between France/US/South Africa will affect new and therefore used pricing.

Buy a cheap boat locally and invest all the extra money you would have spent. Hope a recession hits at the time you have a lot of cash put aside if you are still interested in the idea.

[LeeV]

Originally Posted by Tillsbury

Don’t forget that a “750k” new boat will have cost north of 900k by the time you sail off in her...

Oh yeah, that too!

[E480]

Originally Posted by FlyingScot

Way too many variables.
Recessions in the US, France or South Africa could change everything.
Currency fluctuations between France/US/South Africa will affect new and therefore used pricing.

Africa runs on US$, anyone who knows Africa knows the US$ (cash) rules....Africats are all sold in US$.... Euro and US$ are thus your variables. Try buying a new Leopard from R&C in SA in SA Rand.... US$ all the way.

[Alita49DS]

LF4 writes "My points is I think a lot of us are trying to find the sweet spot."

Sorry. There ain't no sweet financial spot about buying, berthing and maintaining a boat. What I tell my friends is that there is something else. A pain threshold. Unless you can get over that then having a boat will always be a misery. And you will bore and make other boat owners miserable talking about the cost.

It's a lifestyle (non)investment which you have to prepared to pay for. In the same way that there is no pecuniary return from buying a holiday. It's the experience that counts.

If your idea of starting on boat ownership is to use a spreadsheet, my advice would be just forget the whole idea.

[E480]

Originally Posted by Alita49DS

LF4 writes "My points is I think a lot of us are trying to find the sweet spot."

Sorry. There ain't no sweet financial spot about buying, berthing and maintaining a boat. What I tell my friends is that there is something else. A pain threshold. Unless you can get over that then having a boat will always be a misery. And you will bore and make other boat owners miserable talking about the cost.

It's a lifestyle (non)investment which you have to prepared to pay for. In the same way that there is no pecuniary return from buying a holiday. It's the experience that counts.

If your idea of starting on boat ownership is to use a spreadsheet, my advice would be just forget the whole idea.

excellent point....!

[WindwardPrinces]

Originally Posted by Sand crab

On the other hand boats just about bottom out in depreciation after 20 years or so. There are nice well kept and desirable older cats that still have lots of life in them. You would have no big depreciation worries and that boat might just about hold it's value over time. The trick is to find the right one.

This is only true if the owner is really putting a lot of money into it to keep it in bristol condition. Even then, in this boat market, most boats are still depreciating. A 20 year old boat has a LOT of competition for boating dollars, as there are lots of used boats out there.

Most boats sadly need a lot of work at the 20 year mark.

[nickfox45]

Originally Posted by LF4

Yeah, that could be the line to get people to sign up for a new boat now. Which is something I really do NOT want to do. I do want to look after the pocket book and find a way to sail, often, and for the best value.

I believe it will be the used market, almost certainly. Something I can put on the water in Philly and at minimal expense.

How did you get your start?

My wife and I bought a 1985 Catalina 25 as our "learn to sail" boat, then sold it and bought a 2000 Hunter 380 a few years ago. The general plan is to keep this boat awhile, use it and enjoy it as much as we can, and also let it show us what we like and don't like for our next boat. From the little experience I have, my view is that a boat 15ish years old will have much of its depreciation already baked into the price, but will still have lots of life left if it's been well cared for.

At the Annapolis show we saw a 2005-ish Hunter 41 - basically a slightly larger, slightly newer version of our boat. It was priced at something like 175k. It was a beautiful boat, but much much more than we paid, and I walked off it thinking it needed to keep depreciating for a few more years before it'd be a good deal for someone.