Depreciation Curve on Production Boats?

[comesatime]

Check out this article from 10 years ago:

40 Years of Used Boats

Like many have said, depreciation never seems to stop. Compare the author's "quick survey of www.yachtworld.com" from 10 years ago with today, and you can see the values in most cases are down near 50%.

You can scroll through the archives of Used Boat Notebook and get a better idea of depreciation over time...

[Ahneema]

I think you’re right on the depreciating curve. I bought a 2003 Seaswirl 2601. Bought it in 2011 for 33k with 300hrs on Volvo I/O. The price had leveled out. Ironically I sold it 7 years later for 35K go figure. My 2005 Stamas 320 express sold in that year for $325k. Owner added $40k in upgrades. Owner had it for 8 years and sold it for $125k. I bought it 4 years later for $80k. I would recommend doing a complete survey on you boat. And mostly a mechanical. My survey used a camera and looked inside the engine, manifolds, took oil samples. Everything. Had twin 315 hp Yanmar diesels. Cost $38k to replace. I wanted to make sure I knew what I was getting. Both engines had 1200 hours when I purchased 2 years ago! Also, ask for receipts of maintenance done on vessel. I got every receipt from all work that had been done on the boat from 1st and 2nd owners.

[Scout 30]

The Martin scale is interesting in that it appears to indicate that pleasure boats have a 50 year economic life. In order to estimate depreciation you have to be able to estimate the effective age of the boat. Boats are made up of a lot of different parts that all have different economic lives but when one of those parts is replaced it reduces the overall effective age of the boat. That being said actual depreciation, rather than hypothetical, when depicted on a graph would be quite jagged.

[Capn Rick]

In appraising boats, there is no standard depreciation. The Martin scale has been accepted in court, but only when no other data is available. I have appraised many boats over the years and have found many times boats with similar cost new have entirely different used values over the years. Much has to do with the popularity of the boats. What makes one used boat more desirable over another? There are many factors and this could be the subject of endless debate.

The boat value guides (BUC, NADA, ABOS) are just that, guides. I have seen differences up to 40% on the same boat. The most reliable guide is recent selling price history. This information (Soldboats.com) is only available to those in the trade at a pricey annual subscription.

My experience has shown on average, 85%-90% of a used boat's listed price will be the selling price. Research over and over again has found this to be true, but again this is on average. There are always exceptions.

[Belezar]

So, using that chart, I should be able to approximate in today’s dollars, how much depreciation I will take on a used boat - say if I buy a five year old boat and sell it in 5 years? And the years of least depreciation, all else being equal?

[Scout 30]

Originally Posted by Capn Rick

In appraising boats, there is no standard depreciation. The Martin scale has been accepted in court, but only when no other data is available. I have appraised many boats over the years and have found many times boats with similar cost new have entirely different used values over the years. Much has to do with the popularity of the boats. What makes one used boat more desirable over another? There are many factors and this could be the subject of endless debate.

The boat value guides (BUC, NADA, ABOS) are just that, guides. I have seen differences up to 40% on the same boat. The most reliable guide is recent selling price history. This information (Soldboats.com) is only available to those in the trade at a pricey annual subscription.

My experience has shown on average, 85%-90% of a used boat's listed price will be the selling price. Research over and over again has found this to be true, but again this is on average. There are always exceptions.

Good post. It's also important for people to remember that when a cost is estimated by an appraiser it's the current replacement cost, not a reproduction cost. The boat may be 50 years old but the replacement cost would be based on materials currently in use today and that's what is depreciated. The quality should be similar but the material may be different. Reproduction costs would only apply to historically significant boats where it's necessary to reproduce the different parts exactly.

[hellosailor]

Look at Practical Sailor's "Practical Boat Buying" books, there's an actual price and depreciation curve shown at the end of every review. Gives you an idea how different boats have done over 30-40 years of actual numbers.

[Jafal]

Originally Posted by Capn Rick

In appraising boats, there is no standard depreciation. The Martin scale has been accepted in court, but only when no other data is available. I have appraised many boats over the years and have found many times boats with similar cost new have entirely different used values over the years. Much has to do with the popularity of the boats. What makes one used boat more desirable over another? There are many factors and this could be the subject of endless debate.

The boat value guides (BUC, NADA, ABOS) are just that, guides. I have seen differences up to 40% on the same boat. The most reliable guide is recent selling price history. This information (Soldboats.com) is only available to those in the trade at a pricey annual subscription.

My experience has shown on average, 85%-90% of a used boat's listed price will be the selling price. Research over and over again has found this to be true, but again this is on average. There are always exceptions.

Yep sure there are outliers on that average ... it is knowing when the 85-90% of listed price is the right sort of level to offer, vs a ridiculous asking price.

[valhalla360]

The problem with large cruising boats is the sample size is too small and the outfitting and condition.

Ford sells around a million F150s new each year and average lifespan is somewhere around 20yrs...so you likely have something on the order of 5-10million used sales each year. They can dial in the depreciation pretty well but even there, it's not unusual to see sales that are 20-30% off from the predicted value.

Now take a high production cruising boat. It might sell 100 per year...you simply aren't going to get the same kind of statistical reliability out of depreciation estimates.

That said, my experience:
- First few years it's painful with large drops.
- Then out to maybe 15yrs, there are smaller but steady drops.
- By the time you get out to 20yrs, it's the condition and functional value of the boat with age having minimal impact (ie: a well maintained 50yr old boat will sell for more than a poorly maintained 25yr old boat).

It's a quirk of inflation but very common to see 20-30yr old boats selling for original sticker price...but once you discount for inflation, they still lost a lot.