New versus Used: Real Difference in Cost

[Duke95]

So first, yes, there has to be a prior thread on this right? I really tried to find it...please point me to it if you know.

So, I have been chartering ~3 weeks a year for about 5 years now, and am in year 3 of a 5 year plan to buy and on schedule. I had always assumed I would get a 5 year old boat (catamaran, 40-42 ft), but the last 2 charters make me pause...they were both in 3-4 year boats rather than the usual 1-2 year...and man, were they tired. No way at 5 years they would not require all new sails/stackpack., running rigging, chain/anchor, bottom paint, and much tlc elsewhere to be anywhere near bristol. So it just made me wonder, how much worse off is one financially, really, in buying new?

A lot of assumptions in what I am saying below. There is no other way to do it.

Assume
$500k new, 30% depreciation = $350k used.
Assume 25% down either way, 20 year loan.
Assume the used boat would required $40k in upgrades/fixes.

The way I see it, the new boat after 5 years of ownership would cost $247k. The used boat would cost $213 (for both ignoring routine maintenance, insurance, and marina/mooring fees, this is just purchase price and payments and nonroutine maintence). So a delta of $34k.

I mean, given the new boat is new (they sail the same, I would assume, but the newer will have less issues, better design, better electronics, etc...and yes new boats have punchlists and headaches but surely less than the used), it is not necessarily a terrible financial loss to buy new.

What am I missing?

[sailormed]

New =vs= Used. Do not draw your conclusions based on a unique sample of charter boats. If you go shopping for a boat do NOT buy charter boats.
Charter boats are navigating all available days of the year. The skippers are learning how to use the boats and when they come back in a year they have to start all over. Nobody is taking care of the boat as if it is their own.
Buy a used boat from a first or second owner.

[dougweibel]

Two benefits to buying used: You won't have to wait for a new boat to be built, which can be a considerable amount of time depending on what you want. You will wait over a year for some cats at present. Also, a used boat usually comes with a ton of stuff the previous owner spent time and money to acquire - life raft, pfds, spares, tools, galleyware, sheets, enclosures, etc., etc.

From what I have observed most new boats have a considerably more extensive 'punch list' than 3-5 year old non-charter boats. The manufacturer may be paying for a lot of that work, but it is still impacts your time and schedule.

[more]

Originally Posted by Duke95

No way at 5 years they would not require all new sails/stackpack., running rigging, chain/anchor, bottom paint, and much tlc elsewhere to be anywhere near bristol. So it just made me wonder, how much worse off is one financially, really, in buying new?

A lot of assumptions in what I am saying below. There is no other way to do it.

Assume
$500k new, 30% depreciation = $350k used.
Assume 25% down either way, 20 year loan.
Assume the used boat would required $40k in upgrades/fixes.

The way I see it, the new boat after 5 years of ownership would cost $247k. The used boat would cost $213 (for both ignoring routine maintenance, insurance, and marina/mooring fees, this is just purchase price and payments and nonroutine maintence). So a delta of $34k.

I mean, given the new boat is new (they sail the same, I would assume, but the newer will have less issues, better design, better electronics, etc...and yes new boats have punchlists and headaches but surely less than the used), it is not necessarily a terrible financial loss to buy new.

What am I missing?

Your wrong,you assume Assume $500k new, 30% depreciation = $350k used.
in 5 years for cat depreciation is 10-20% max

for example this 2017 Lagoon 42 €378,000 tax not paid
https://www.yachtworld.com/yacht/201...on-42-7128596/

but totally new is from 387,555€ with new electronic like this up
without Life raft,but Life raft have serviceable life 4-10 years max (depend on manufacture) charter pack have this used,but you don't need charter pack.

new don't have chain,anchor and windlasse ,but this used have succcks anchor chain is for replace and windlasse is underpower.

this used electronic is the outside warranty,only engine is bigger in this used vs new.
I buying new CAT and I pick smaller Nautitech 40,Lagoon 40 or FP ISLA 40

all is standard factory around 300 000€ +-10% + couple thousand € for stronger engine
i don't need generator, old technology AC, crapy factory AGM batteries,

[more]

Originally Posted by sailormed

New =vs= Used. Do not draw your conclusions based on a unique sample of charter boats. If you go shopping for a boat do NOT buy charter boats.
Charter boats are navigating all available days of the year. The skippers are learning how to use the boats and when they come back in a year they have to start all over. Nobody is taking care of the boat as if it is their own.
Buy a used boat from a first or second owner.

OK try find 1 catamaran 40-45 ft 5-year-old on market .normally with 3 cabin owner version

[Duke95]

That is definitely part of the equation too...especially now...used prices super high, inventory very low...the prospects of a 1 or 2 owner 3 cabin cat? Its getting to be a unicorn.

[more]

Originally Posted by Duke95

That is definitely part of the equation too...especially now...used prices super high, inventory very low...the prospects of a 1 or 2 owner 3 cabin cat? Its getting to be a unicorn.

Try find only 1 CAT owner version and share here you experience .
Be good if is 30% depreciation 5 year old.
World is big only 1 CAT,this must be easy task

[rbk]

Average replacement age for systems/parts is between 10 and fifteen years. At five years everything is used but not quite in need of replacement. At 10-15 they are tired and are ready to be replaced (leverage for price negotiation then install what you want) or already replaced. Since you r got the time, forget how old the boat is and look at what maintenance/upgrades have been done along with initial build quality. You may find that a 20 year old well maintained upgraded boat will better suit your needs and save you a ton of money.

[clownfishsydney]

I would want a significant discount on a 5 year old charter boat compared to a 5 year old privately owned boat. As others have mentioned, the charter boat will have been used virtually every day of the sailing year, whereas a normal private boat will have been used for a few weeks. Even if used for a major cruise, it will have been looked after. I would expect that every charter boat has been run aground numerous times, even onto coral or rock.

I bought a 10 year old cat that had not been looked after for 5 or so years. However, it had not been used for that time either. We costed in replacing at least two sails, the rigging and one engine when we purchased it. Once everything had been cleaned, serviced and the sails replaced (two), it was like new.

[more]

Originally Posted by clownfishsydney

I would want a significant discount on a 5 year old charter boat compared to a 5 year old privately owned boat. .

What you (or I) want and what you receive is a huge difference.
For that reason i now buying new CAT not used.
i must save more money for buying new cat in cash. and is funny used CAT 5-6 year old is more expensive from new.
For me 10 year cat price must be minimum 50% of new. Without any electronic ,electric in price only hull

[goboatingnow]

At this stage new is the only way to get choice at the moment

[mvweebles]

Over generalization but roughly right, more accurate than using a fixed depreciation assumption such as 30% (works better for cars than boats). For decent quality higher volume production boats that have been well-maintained (including sails, rigging, electronics, etc), 5-10 year resale seems to be very close to original base price minus reasonabke upgrades. Meaning you lose whatever upgrades and doo-dads added, which can be considerable. Charter boats with unique layouts and specific marketing efforts don't really fit.

I noticed that the 2008 recession seriously disrupted boat values. Covid has too. But the overall trend of resale being close to purchase minus upgrades for a well maintained boat of higher quality is a decent crude rule.

[Joli]

It really depends on the boat you want to buy. Sometimes it's better to buy new because the refit cost brings you close to the cost of new. Other times the price delta between new and used is so extreme you can refit a boat several times and and still be a fraction of the new price.

In our instance we bought for about 7% of new and have done two big refits. Even with the refits we're only about 20% of new replacement.

Get prices and compare.

[Duke95]

All makes sense, thanks! Great points from folks, sounds like a few things I did not consider 1) really understand how much the boat was used and maybe abused 2) understand that new boat cost is missing some fairly expensive items that will need to be purchased as well (life raft, dingy, anchor and chain, etc). And of course if I am looking toward a 2023 purchase, well, decide no later than a year from now because the new boat purchase will take at least a year (I knew that), and also consider what the used market will look like at that time.

With that latter point, I suspect 2024/5 will be an interesting year(s)...replacement boats from Dorian will have run their 5 year charter course...but again, buyer beware on how much these boats have been used...with the Abacos out of action for so long, demand for Exuma boats was probably really high (in fact that was my latest charter and like I said the 3 year old boat was really beat up). But anyway, try to avoid a charter purchase, or at least be very, very careful.

[Tetepare]

I'd sit tight. Most of those who rushed into sailing during COVID will be bailing out in 2-3 years.