Boat Values - Know Before You Buy
I get calls or emails weekly from individuals that are in their final passage to boat ownership; finding and buying their dream boat.* They want my counsel.* And more often than not, most shoppers do not have a true understanding of boat values and the prices they command. Most individuals are shocked to find boats cost as much as houses do. They are often taken back when I try to explain the reason a boat is priced the way it is.
I want to give you a good idea of why used boats cost as much as they do so let's start from the top.
If you read other posts on my website, you will read about the absence of an official Yacht Blue Book.* Yes, that's right, there is no such thing. There is one for automobiles but not for boats.* If you call any used car dealer or bank in North America and name any production automobile, they will quote a value of within a few dollars of each other. This is due to the multi-billion dollar, organized wholesale car auction system.*
And there is also the Powerboat Guide, NADA and others that like to sell you their version of a boat Blue Book.
With over 2,200 boat manufacturers (USCG Listings) in North America there is no such wholesale market for boats and the older a boat gets the bigger the price discrepancies.* And keep in mind that boats and yachts are not built on an assembly line.* I've been through my share of boat building plants including Hatteras, Bertram and Carver.* Boats are built like houses, one step at a time.* Very labor intensive, boats are built, cars are assembled.* So you can easily see why new boats cost thousands, perhaps millions of dollars to produce.* Powerboats cost more to produce than sailboats as they are more complex.
Generally speaking boats do not appreciate in value.* But they do reach a point in their life where they do not loose any more value.* Much like antique automobiles, the rarer a boat is, the more it will be in demand.* A 40 year old Huckins will often bring more money today than when it was first commissioned.* But boats generally depreciate about 10% a year.
So you are looking at that 1984 40 foot Albin trawler, with a single Lehman and 2 staterooms.* What is it worth?* What is a fair price?* Simply speaking, that Albin is only worth what you are willing to give and the seller is willing to take.* So where do you start?
Here is what you need to know when considering prices of boats.* The owner has established his asking price with consultation with his listing Broker based upon several factors.** I do the same with my sellers.
*In what condition is the boat?* Good boats always command higher prices, always!* A newer boat in poor condition will bring less than an older boat in good condition always!.* By condition I am speaking of both cosmetics (cleanliness, gelcoat, paint, woodwork, canvas) and structural issues involving fuel tanks, rudder posts, blisters etc.* The more upgrades and maintenance that has been completed, the more you should expect to pay as the owner knows this. He also knows that you will have already looked at the worn out boats and have rejected them too.
*How old is the boat?* See above.* This factored in but is not the deciding factor.
*How motivated is the seller?* Some owners want to move their boat as quickly as possible and any thing close to an asking price might be acceptable.* This doesn't happen often but it does occur.
*How many of these 40' Albins are there on the market?* Remember, the more demand for the boat, the higher the price will usually be.** And I find that most people will not travel far to buy a boat, so boats in California will not be in competition with East Coast boats.
*And lastly, and perhaps the most important factor in determining that asking price will be recent past sales history of similar makes and models.* The recent past sales history is available only to Brokers however through our multiple listing service, YachtWorld.* It will give me the recent demand for this 40' Albin and at what selling prices have been in different parts of the USA.* It tells me what people are asking and what people are paying!
So when you are looking at this Albin and you have found at what seems to be a great boat for $50,000.00 and all of the others are in the $85 - $100,000.00 range, there is a reason for this.* Remember, condition, condition, condition!* Be carefull as new fuel tanks will cost you about $30,000.00 to replace, and rudder posts about $8000.00. But if you can live with the problems with the boat, then by all means buy it.* I am just wanting you to know not to expect a problem - free boat for the low, low price; you'll pay for what you get.
So now you are thinking, are all boat prices negotiable?* Certainly they are.* Everything has its selling price and neither the listing Broker nor the owner may know what that price will be.* Only a serious buyer with money on the table will be able to find that out through negotiations. but I will tell you that as of 1/17/2009, boats are selling at about 15% off of asking prices.
-- Edited by marinetrader at 05:00, 2009-01-18