There are many variations on this. Builders who go out of business. Brokers who don't pay builders. Dealers who never pay for the boat on their lot, having it on consignment and selling to you.
So, the case in the headlines now.
Buyers order new boats through Dealer. Many were already on order as spec boats. Buyer trades in boat as well. Dealer sends some money along the way to builder but not the full price of the boat. Builder won't turn boat over to buyer because they're still owed money even though buyer paid full amount with trade. Dealer claims builder owes them money for warranty claims and he's offsetting. Builder decides to sell boats to others since dealer is unwilling to finish paying. Oh, and dealer quickly closes and forms a new corporation and opens under that name. So buyer is out of their money and has no boat, not their old one or next one. Dealer and Builder both claim they're owed, builder owed $15 million on six boats. Dealer has no intention of paying and builder has none of releasing boats unpaid. Now, builder had terminated dealership months ago and tried to audit records per the agreement but dealer refused to allow. Meanwhile all parties suing each other. And, as if that isn't enough, the dealer placed liens on 30 more boats that they claim they are owed on the warranty service they performed.
What does the consumer do to protect themselves? On a used boat you make deposits only through Title companies who handle escrow and you always get a title search before releasing any funds.
On a new build, first you don't remit money to a dealer or broker. They have generally few assets to protect you and you have no way of being sure they're forwarding the funds. If you have a trade, do a buy and sell. Submit only to the builder and not their US affiliate either, to the ones with assets.
I suggest a Commercial Letter of Credit with a well written contract and releases only as they present evidence to the bank that they've met the milestones.
Otherwise, just a lot of due diligence and care. Perhaps performance insurance.
Today, there are persons who have paid $4-6 million and have no boat and no real hope of when it will all be resolved. It's been in court for months already and still just fights over procedure. There are 30 others now with liens on their boats.
So, the case in the headlines now.
Buyers order new boats through Dealer. Many were already on order as spec boats. Buyer trades in boat as well. Dealer sends some money along the way to builder but not the full price of the boat. Builder won't turn boat over to buyer because they're still owed money even though buyer paid full amount with trade. Dealer claims builder owes them money for warranty claims and he's offsetting. Builder decides to sell boats to others since dealer is unwilling to finish paying. Oh, and dealer quickly closes and forms a new corporation and opens under that name. So buyer is out of their money and has no boat, not their old one or next one. Dealer and Builder both claim they're owed, builder owed $15 million on six boats. Dealer has no intention of paying and builder has none of releasing boats unpaid. Now, builder had terminated dealership months ago and tried to audit records per the agreement but dealer refused to allow. Meanwhile all parties suing each other. And, as if that isn't enough, the dealer placed liens on 30 more boats that they claim they are owed on the warranty service they performed.
What does the consumer do to protect themselves? On a used boat you make deposits only through Title companies who handle escrow and you always get a title search before releasing any funds.
On a new build, first you don't remit money to a dealer or broker. They have generally few assets to protect you and you have no way of being sure they're forwarding the funds. If you have a trade, do a buy and sell. Submit only to the builder and not their US affiliate either, to the ones with assets.
I suggest a Commercial Letter of Credit with a well written contract and releases only as they present evidence to the bank that they've met the milestones.
Otherwise, just a lot of due diligence and care. Perhaps performance insurance.
Today, there are persons who have paid $4-6 million and have no boat and no real hope of when it will all be resolved. It's been in court for months already and still just fights over procedure. There are 30 others now with liens on their boats.