Newer vs. Older

MYTraveler said:

Though hard to find, I think the optimal intersection of age, reliability and value is a 1-3 year old boat build for and used by a knowledgeable owner.

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And...who has bottomless pockets, so got all the 'fixes' and 'mod cons' done with the best materials, equipment, and tradesmen. Because all boats, even brand new, still have 'must-haves' added by the new owner, even though they thought they had thought of everything in the ordering and commissioning, even if there are no significant fault type issues to sort out. So, I agree, a near new boat, about 2-3 years out is most likely to be truly turn key and go, with nothing extra needed, and has suffered the most major depreciation, and therefore probably constitutes the 'best buy'. I was never well-heeled enough to take my own advice however...

If it were me...

I'd buy a boat that has several years (not just 1-3) of actually doing what you want to do with the boat.

For example if I were in the market for a passagemaker I'd want a boat that had actually beeen used for passagemaking.

That way you're getting a boat that doesn't just represent the Previous Owners dreams of cruising. You'd be getting a boat that had actually been cruising. It would have all the "stuff" on it that the owners had decided they actually needed for that type of cruising.

In the OP's example newer will generally be the better option. Although with the right boat you can do well either way. In recent times a few TF members have really nailed it with their purchases. A patient and persistent search is required and it might take quite a long time.

As others have noted, and as one who bought an older boat, I can tell you that there will always be stuff other than the big items (engine) that will eat away at your bank balance. You are unlikely to save any money at all to end up at the same condition and reliability.

Even worse, after the spend your boat value for insurance won't be much above what you paid initially, despite whatever you have spent. Market value is typically the only cover you can get for an older boat. You should end up with a very safe boat in terms of fire risk, but could get caught up in a marina fire and be seriously out of pocket afterwards. Frankly, post-refit that's my biggest concern.

With hindsight what would I have done? Newer boat.

Insequent said:

With hindsight what would I have done? Newer boat.

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Thanks for that hurtfully honest answer Brian. If I'd had the moola I'd say and do the same thing. As it was I bought the boat my cash would buy, so it was a debt free vessel, and I have deliberately tried to keep costs down as I refurbished. However, yes, I have paid out at least 50% more in doing so, which I won't now get back. But for the GFC, I'd have been able to sell her for more than I paid for her, some years ago, but alas, held onto her too long, and not now to be. Bummer, eh?

Australia is a lot different to US boats are hard to find and we have a very poor quality boats to choose from but if you purchase a 30 yo 32' for $80k and spend $30k you have a boat that's worth $70 in a few years .If you purchase a 10 yo same design for $180k you should be able to sell in a few years for $160 k at least that's what I tell the wife

BandB said:

Well, speaking from my experience, every new boat I've purchased has been delivered problem free. We've never lost propulsion or any major equipment. I've taken extended shakedown cruises and have very little on our list upon completion. I recognize problems on new deliveries are common, just not my experience. We do get surveys as well on new boats.

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New or newer boats carefully vetted has worked well for us too. It seems easier to keep up a newer boat than to fix up and maintain an older vessel. If you have the funds, go new(er) is my vote.

Bought Bay Pelican 17 years ago when she was 14 years old. Have spent more than the initial purchase price in improvements.

17 years later I am replacing systems I installed, hoses, radios, pumps, etc.

If I had bought new I would have spent even more money and would now have a 17 year old boat and would be replacing the same systems.

If Bay Pelican were on the market someone could buy a competent well maintained Krogen 42 for less than 1/4 the price of a new Krogen 44 equipped the same. The new Krogen would have less teak, aluminum doors and newer wiring. Its insurance bill would be double or triple that of Bay Pelican.

10 years from now I don't know which would be more expensive to have owned. It is hard to believe however that the new boat would not depreciate by more than today's value of the Bay Pelican. And at ten years out all sorts of systems would need to be replaced.

A comment on keeping a boat 10 years or longer. You can fix things when they break or you can replace items as their service life expires. The old adage "if it isn't broke don't fix it" may result in the break occurring when you are 50 miles offshore.

I have a number of stories where I was replacing something before it broke that when I was removing it I found it was on its last legs.

Bay Pelican said:

Bought Bay Pelican 17 years ago when she was 14 years old. Have spent more than the initial purchase price in improvements.

17 years later I am replacing systems I installed, hoses, radios, pumps, etc.

If I had bought new I would have spent even more money and would now have a 17 year old boat and would be replacing the same systems.

If Bay Pelican were on the market someone could buy a competent well maintained Krogen 42 for less than 1/4 the price of a new Krogen 44 equipped the same. The new Krogen would have less teak, aluminum doors and newer wiring. Its insurance bill would be double or triple that of Bay Pelican.

10 years from now I don't know which would be more expensive to have owned. It is hard to believe however that the new boat would not depreciate by more than today's value of the Bay Pelican. And at ten years out all sorts of systems would need to be replaced.

A comment on keeping a boat 10 years or longer. You can fix things when they break or you can replace items as their service life expires. The old adage "if it isn't broke don't fix it" may result in the break occurring when you are 50 miles offshore.

I have a number of stories where I was replacing something before it broke that when I was removing it I found it was on its last legs.

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A lot of very good points here by Marty. During my refit a good part of the increased scope of work was related to preventative maintenance, and finding stuff very much on last legs was a frequent occurrence.

I just can't see that buying a new boat will end up better financially than one in the 3-7 year age range when you buy it. Quality of fitted components will be key: some might have a 10 year service life, but you ought to be able to get at least 15 years if done right first time. I fear that in an effort to contain costs some new builds do install the cheaper and shorter life options. During refit you get a choice of the quality you install, of course it comes with a cost if you go for top quality.

I did just think of another possible reason to favor newer (albeit not necessarily new) over older, and it has to do with some specific features that may not have been available or popular in older designs.


For example, we have stairs to the bridge -- not a ladder. That didn't mean we had to buy new, just newer.


Another example might be about pod drives, should that be a feature one wants. Or a full-beam master in a boat style (like ours, for example) that would not otherwise support that. And sometimes these kinds of features are slightly co-dependent; a full-beam master might be possible in a boat only slight larger than ours... if it also has pod drives so the engines are located further aft.


Some of my example aren't particularly applicable to common "trawler" designs, of course...


-Chris

"When I was a kid they rigged the steering on a runabout backwards so when you turned the wheel left, the boat turned right."

This is how sailing ships were steered , it reflected the tiller movement and was "natural" before cars were invented.

One thought on a boat with a super new high tech hull,,, it might be very difficult to repair.

An old hand layup in GRP is not that big a deal for an understanding workman ,

but carbon fiber + epoxy resin infused might be a very different story.

Regarding levels of boats:

I am not inclined to purchase "brand new" play toy items such as a pleasure boat... due to the fact of huge depreciation levels for first few years and because it is much easier for me to cash-out on a used play toy item. BTW - I'm firm believer that toy items like pleasure boats should not carry any loans upon them. MOF - we carry no debt on our houses, autos, boats or anything else (well... we do keep one small extended mortgage; i.e. $350 +/- per mo. for tax/credit reasons). That does not mean we have not invested heavily into business items (again with no debt lingering)... because we do and are proceeding toward fruition.


That said regarding general overview of how we run our financial life; boat purchase and ownership carries its own special criterion and set of rules in my [our] book. Such as:


1. Only purchase used and at good price - for cash!
2. Only purchase when immediately useable and in very good overall condition
3. Only purchase when both wife and I agree that we should purchase
4. Always have intent for fun with the boat and to have its ongoing costs remain minimal
5. Never think that there is any definite upside in value when reselling; but if that occurs - that is great! I have sold at profit a few times over the years... because I purchased right to begin with and have kept the boat in good condition.

Here is the most important rule for "used" boat buying in my book - Know What You Are Doing! I'm lucky in this regard due to fact that I was inside the boat world form birth. If a person is a newbie to boats then that person needs to read all they can about boats and rely heavily on marine surveyors... or close friends that may know a lot about boats - such as me. I've helped friends get into boating and have been pleased to act as their guide.

Happy Boat-Level Daze - Art

I agree with Art. We have tend to by used, in good condition and price with the intent of keeping for a long time and maintain. Also we don't get to up set if damaged or we have to walk away. We take pride of owning and maintain old. Eagle 38 years old, we owned for 21 years, run about 42 year old, owned 39 years, land rover 12 years we owned for 6 years. We also shop thrift shores.

Both of our parents grew up in the depression and taught conservative values.

CPseudonym said:

If you want to save $2-300K buy a boat the current owner spent scandalous amounts of cash refurbishing/repowering. There out there but the trick is to not have feet of clay when you find one.

Also keep in mind the purchase price is nothing more than the ante to buy a seat at the table. Forget diesel fuel, boats run on cash.

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yes, Yes, Yes. Or buy a newer boat.

Give me a 3 year old boat with 500 hours on it. I will have little worries on a delivery run the same goes true for buying one.

I think the projected # of years of ownership must come into the calculation - there can be substantial transaction costs on the higher value vessel. The contemplated boats in this thread are almost certainly going to be sold by a broker - that's 10%. And in WA state we have an (almost) 10% sales tax. Added to the depreciation of a new/newer boat, that's some significant money that will mean more to some people than others.

But if you are new to boating and buy the "wrong" boat for your use...that's going to be particularly painful.

There are some other reasons for new(er) as evidenced by hundreds of TF posts such as:

- bad #6 cylinder on a Lehman
- old tired engines in general
- leaky windows
- blisters and bottom peels
- soft rotting decks
- corroded rudder posts
- fuel and water tanks that have failed
- failed exhaust system
- shaft tube failure
- appliances worn out
- instruments outdated or not functioning
- teak decks leak and need replacement
- old engines problematic due to lack of new parts
- plumbing shot
- last but not least, wrong anchor!

It seems to me to be a budgetary question, allotted time, fixer upper skills, and or desire to cruise vs work on projects.

sunchaser said:

It seems to me to be a budgetary question, allotted time, fixer upper skills, and or desire to cruise vs work on projects.

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When you're my age, that's exactly what it is!

Sometimes the PO has the foresight to vest ownership in an LLC, so sales are easier and purchases are less costly in sales-tax-giddy states like WA.

Bought a 2yo boat for 320K
did many upgrades and maintained well, looked good and everything worked. Could have used new carpet and blinds.
sold it 16 years later for 120k


the last buyer got the better deal

drb1025 said:

Sometimes the PO has the foresight to vest ownership in an LLC, so sales are easier and purchases are less costly in sales-tax-giddy states like WA.

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I'm considering doing that myself.
Down here, in San Diego, the LLC boats seem to be moving quite well!

Codger2 said:

I'm considering doing that myself.
Down here, in San Diego, the LLC boats seem to be moving quite well!

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Will you not have to pay tax again when you transfer to LLC ?

Well said, klee wyck!

mbevins said:

Will you not have to pay tax again when you transfer to LLC ?

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That could be a small price to pay considering the speed of sale when it comes time for Walt's next boat

Survey. If you have a great hull, new engine and new current equipment for less, seems like a no brainer. Also depends how long you want to use it. If a long time, I go with the old hull and new equipment, you know what is in there and new engine, that's the bomb. If only using for a year or two, you loose your butt just based on what the future buyer can't finance because the hull is old and resale gives way less credit to new engines. Completely gets down to how you want to use the boat. 3 year used, get the newer. 10 year user, get the old and a new engine, less headaches, pay for your use with enjoyment. But as always, buy the hull for what you want to do! So important.

MBevins-no you do not have to pay sales tax again when transferring a boat to an LLC. It is not a "sale" but a change in form of ownership. You transfer ownership to the LLC in return for ownership of the LLC. States do not consider this a sale and do not charge sales tax on the transaction.

THD said:

MBevins-no you do not have to pay sales tax again when transferring a boat to an LLC. It is not a "sale" but a change in form of ownership. You transfer ownership to the LLC in return for ownership of the LLC. States do not consider this a sale and do not charge sales tax on the transaction.

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Does the LLC need to be in same state as boat registration is in?

Delaware is inexpensive to own an LLC. Approx. $100 per yr for service co and $300 per yr state use fee. No state income tax.

WHAT'S AN LLC..?

Please don't assume everyone knows...this is a worldwide forum, remember...

Marty's post # 37 and Art's post # 41 represent points of view that are similar to my opinions on the subject. We waited for the right boat and spent a lot of effort looking. Commissioning a new build would be out of the question for us. Marty points out that the cost of a KK44 would be several times higher than a KK42. There is a KK44 for sale in BC right now that is 4 times more than what we spent for our boat. While it's a very nice boat (I've been on it) such a purchase would be impossible. And yet aside from a few newer bits and bots, this KK44 would not add anything more to our boating pleasure: it's essentially a slightly larger version of the KK42, with not a lot more to add. And you face a faster depreciation.

My advice is to be patient and wait for a boat where the PO's have done major re-fits.


Jim
Sent from my iPad using Trawler Forum

Peter B said:

WHAT'S AN LLC..?

Please don't assume everyone knows...this is a worldwide forum, remember...

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Limited Liability Company

https://www.legalzoom.com/knowledge/limited-liability-company/topic/limited-liability-company

THD said:

MBevins-no you do not have to pay sales tax again when transferring a boat to an LLC. It is not a "sale" but a change in form of ownership. You transfer ownership to the LLC in return for ownership of the LLC. States do not consider this a sale and do not charge sales tax on the transaction.

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That makes sense !