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Old 03-15-2015, 09:41 AM   #1
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You want how much?

So we went to the local boat show in Cape Coral yesterday and it was interesting.
I would never have thought that a new 51 SeaRay Sundancer now has a price of $1.6M..That's right, million for a Sundancer. Finding this a bit hard to accept I went home and went to Yacht World. A 2013 version is under contract for $771,000 currently. Marine Max did have at least 8 listed though and all new,

So do people actually pay that for this boat and then just eat that kind of depreciation?

I could not justify that kind of depreciation for anything in this world.
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Old 03-15-2015, 09:47 AM   #2
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So we went to the local boat show in Cape Coral yesterday and it was interesting.
I would never have thought that a new 51 SeaRay Sundancer now has a price of $1.6M..That's right, million for a Sundancer. Finding this a bit hard to accept I went home and went to Yacht World. A 2013 version is under contract for $771,000 currently. Marine Max did have at least 8 listed though and all new,

So do people actually pay that for this boat and then just eat that kind of depreciation?

I could not justify that kind of depreciation for anything in this world.
I was a teenager in the 1970's, so what I do is divide today's prices by 10 to get them into the sort of money I can understand.

$1.6m.....ah ok that 's $160k.
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Old 03-15-2015, 09:48 AM   #3
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So do people actually pay that for this boat and then just eat that kind of depreciation? YES!

I could not justify that kind of depreciation for anything in this world.
And thank God they do or a lot of us would not be driving the boats we have.
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Old 03-15-2015, 10:06 AM   #4
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Bankers spend their year end bonuses that way.

They don't have to worry about depreciation as they know they will get another outrageous bonus the next year.
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Old 03-15-2015, 10:37 AM   #5
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Bankers spend their year end bonuses that way.

They don't have to worry about depreciation as they know they will get another outrageous bonus the next year.
That's why I'd only buy a boat I could pay cash for
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Old 03-15-2015, 11:06 AM   #6
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And that is the secret. Agree totally.

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Old 03-15-2015, 11:29 AM   #7
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And thank God they do or a lot of us would not be driving the boats we have.
X2

Without these purchases of expensive NEW toys there would be no current size boat business. Startling how many pay cash for these baubles.


The same applies to cars, small airplanes, jewelry, art etc. Yes there is the Ferrari selling for $16M and a Picasso for $80M, a few exceptions keep the well heeled collectors and museums going.
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Old 03-15-2015, 11:47 AM   #8
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I know this has been brought-up several times, but boat ownership has become out of reach for most of the middle class. I have reviewed the statistics and boat owners are becoming older and wealthier.

My parents earned a decent living back in the 80s and could afford a three bedroom house, two cars, and a trawler (three children as well). I remember the Florida ICW back then teeming with life: sailboats, small powerboats, trawlers, etc. Mom and Dad took two week vacations and weren't glued to the cell phone (yes they had one then) or laptop during their time off.

Fast forward to 2015... My wife and I earn a good living but we wouldn't dream of owning anything larger than Sherpa while working. I avoid debt, save for retirement, and pay with cash when at all possible. I can hardly take a few days off and work far, far more hours per week than my parents who were professionals as well. There is now an expectation today that one should work during vacation or not even take a vacation.

I was recently reading my Dad's old "Time Life" boating books (maintenance, navigation, and Handy Boatman). The photos from that time are very telling: young people owning boats and no obnoxious yachts.

Times are different. My generation will not be enjoying generous vested retirement plans, golf, and owning large boats in their later years. Instead, they'll be working until death.

Sorry for venting.
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Old 03-15-2015, 11:55 AM   #9
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It doesn't have to be that way if you are willing to own an older boat AND do all the work on it yourself. I am unemployed but I own and maintain two boats (33' Cruiser from 1936 and a 36' sailboat of 1972 vintage). You can buy a pretty decent boat for little money and operation/maintenance isn't all that much if you do it yourself and cruise at displacement speed.
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Old 03-15-2015, 11:57 AM   #10
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I agree but the middle class has become (a general statement) absolutely numb with finances. They can't afford a boat because they typically live in a house that is beyond 30% of their yearly income, own a car financed for 90 months (which should be punishable by death) and have zero issues supplying the family with brand new iPhones for hundreds of dollars a month. They choose to spend money in those places so boats are out of the question. I know I couldn't afford a boat unless it is a liveaboard for 6 months of the year so that makes it affordable to me. At no time do I look at it as an investment, it is purely a liability. At 36 years old, I think I purchased it at the bottom of the depreciation curve

I'm not saying life is easy these days, energy/food/insurance costs are way out of whack but no one is holding a gun to your head to buy a brand new garbage pickup truck that "you need" to haul your family around for $45k. I think it is just the accepted norm to live like that now and be financially strapped.

I truly believe that is why you are seeing an insurgence of the tiny home craze and such because people are tired of living in the rat race hampster wheel. I don't think those are the people that are going to run out and buy a boat brand new but those are the people who will have money to spend during retirement.
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Old 03-15-2015, 12:05 PM   #11
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It doesn't have to be that way if you are willing to own an older boat AND do all the work on it yourself. I am unemployed but I own and maintain two boats (33' Cruiser from 1936 and a 36' sailboat of 1972 vintage). You can buy a pretty decent boat for little money and operation/maintenance isn't all that much if you do it yourself and cruise at displacement speed.
I FULLY agree! Unfortunately though, many working people simply do not have the time to do all their work--I know I don't. I do all maintenance on Sherpa and most repairs, but have to rely on a yard to do the complex stuff. Otherwise, I'd never be boating.

Latest statistics suggest Americans are working more hours per week and take fewer vacation time than all other industrialized nations--including Japan!
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Old 03-15-2015, 12:26 PM   #12
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Everybody is talking about their lifestyle and ability to pay here. I posted this because I don't see the value for what your paying. 1.6M plus taxes for a production boat of this type seems a little steep. I haven't priced new semi custom boats of the same configuration but find it hard to believe they're more $. This leads me to think very large margins for all sales channels involved.
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Old 03-15-2015, 12:32 PM   #13
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Larger margins due to lower sales?

I would think the margin increases if less people are buying, the overhead is staying relatively fixed for manufacturing.
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Old 03-15-2015, 12:51 PM   #14
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I agree but the middle class has become (a general statement) absolutely numb with finances. They can't afford a boat because they typically live in a house that is beyond 30% of their yearly income, own a car financed for 90 months (which should be punishable by death) and have zero issues supplying the family with brand new iPhones for hundreds of dollars a month. They choose to spend money in those places so boats are out of the question. I know I couldn't afford a boat unless it is a liveaboard for 6 months of the year so that makes it affordable to me. At no time do I look at it as an investment, it is purely a liability. At 36 years old, I think I purchased it at the bottom of the depreciation curve

I'm not saying life is easy these days, energy/food/insurance costs are way out of whack but no one is holding a gun to your head to buy a brand new garbage pickup truck that "you need" to haul your family around for $45k. I think it is just the accepted norm to live like that now and be financially strapped.

I truly believe that is why you are seeing an insurgence of the tiny home craze and such because people are tired of living in the rat race hampster wheel. I don't think those are the people that are going to run out and buy a boat brand new but those are the people who will have money to spend during retirement.

Skinny, those are some spot on points. And I'm guilty of some of these, but you are right. Needs vs wants has become very vague. Some of the things that help us afford boating are keeping my 10 year old pick up well maintained (it's a Ford), and a biggie is doing virtually all of my maintenance myself that is possible.
Of course a boat is also a "want", so your priorities need to geared that way.
And I also agree with the OP- there are WAY better choices for that kind of money!


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Old 03-15-2015, 12:53 PM   #15
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Car makers produce cars by the millions. Costs can be amortized over those millions of units so the "per unit" cost is relatively small. Not so with boats.

Part of what comes into play in the pricing of new boats is the fact that when any manufacturer makes a boat there are hundreds of moulds involved to make the fiberglass parts, and those moulds have a finite life. The moulds are expensive to create and that cost doesn't get amorized across hundreds or thousands of boats.

Speaking for myself, I could never afford to buy a new, large boat. I have a loan on my boat because I didn't want to take funds out of my retirement accounts to buy a toy. We can afford the payment and insurance and other costs, so that isn't a problem. I also didn't want to use a home loan to finance a toy. I could have done that but would have possibly put our home in jeopardy and I would never do that to avoid a slightly higher interest rate.

I also bought a boat that was 15 years old when I bought it so it was well down the depreciation curve. A new boat will lose approximately 1/2 of its value within the first five years. The next five years takes another 1/3. The next five another 1/4. So by the time it gets to be 15 years old it's getting down to a point where it becomes affordable for a lot more people.

I got lucky and bought my boat during "The Great Recession". I did my homework and bought it in the Detroit area where unemployment at that time was running about 30%-35% in the auto industries. NOBODY was buying boats, or any toys for that matter.

I negotiated hard and bought my boat for what I feel was a very good price. The dealer hated me when the deal was done because I held the trump card all the way through the negotiations and I wasn't afraid to play hard ball with him. He needed to sell the boat--I didn't need to buy his boat and let him know that in subtle ways.

By the time we struck the deal and signed the paperwork he would hardly speak to me and was almost rude in his emails.

That's OK though. I got the boat I wanted at the price I wanted and he had to take my trade to make the deal.
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Old 03-15-2015, 01:10 PM   #16
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I was thinking this the other day as I looked at a brand new Nordic Tug. I always thought they were well built (they may be) but I was surprised at how Spartan and poorly finished they were. Not that the gel coat was bad or anything, just lots of techniques to leave an edge alone, simple finishing, no trim. Then I looked at an Azimuth and it was like a Rolex to the NT's Timex with really snazzy lighting, great doors, stainless polished vents. Teak decks. Huge difference and no clue what the difference was in price. Azimut is Italian but I couldn't find out where their yards are, Asian? I suppose the NTs, if finished like an Azimuth, would be priced too high? I suppose the Azimuth appeals to me because it sorta kinda looks like my boat but mine is finished like a fuel tank, nothing snazzy at all.
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Old 03-15-2015, 01:21 PM   #17
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Everybody is talking about their lifestyle and ability to pay here. I posted this because I don't see the value for what your paying. 1.6M plus taxes for a production boat of this type seems a little steep. I haven't priced new semi custom boats of the same configuration but find it hard to believe they're more $. This leads me to think very large margins for all sales channels involved.

I posted a link to an upstart manufacturer Sea Piper yesterday in RustyBarges thread. 34' of center cockpit trawler boat for $114,000 brand new. It got my attention because I question if I could build it myself in steel for that money.

Last I checked $114,000 was about the cost of a new 26ish foot Sea Ray.
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Old 03-15-2015, 01:25 PM   #18
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I would never have thought that a new 51 SeaRay Sundancer now has a price of $1.6M..That's right, million for a Sundancer. Finding this a bit hard to accept .
In answer to your question of whether people pay that. NO. As a production boat there is considerable mark up on that boat. The average price paid for that $1.6 million MSRP is probably around $1.3 tops and might be closer to $1.2 million. Invoice to the dealer on that boat is 65% of retail. That's before any other reductions or discounts Marine Max might receive.

I don't have the price sheet on the 510, but looking at the 470, base price is $1.064, dealer cost is $692, typical selling price around $800-850. Now it is very easy to add another $200 on the price which will add about $160 or so to the purchase.

And this is the market segment that has performed the worst the last few years.
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Old 03-15-2015, 01:25 PM   #19
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And thank God they do or a lot of us would not be driving the boats we have.
How true!!!
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Old 03-15-2015, 01:32 PM   #20
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The margins may be high during low sales, if the number of sellers has decreased more.

Any way you look at it, the $ value dropping in half in a year is a big hit. Wow.

My guess is that people buying a new boat such as that, are likely those who have retired with more money than they are likely to spend in the rest of their lifetime. Maybe they are not overly experienced boaters. They are convinced by a salesperson that the boat is easy to handle with all the bells & whistles. They deserve a boat like this after working hard all their life, just to relax and enjoy life.

It soon becomes obvious that a 51 foot boat isn't as easy to handle as it was during the cruise from the sales dock on that perfect day. Perhaps it's downright stressful rather than relaxing. And the grandchildren get bored of it after a few outings. So it goes on the market along with a quite a few others in the same position. The market gets flooded. Supply & demand.
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