Reasonable Offer On A New Boat

I have seen and read a lot of info on looking at and offering $$$ on a used boat. And it is fairly easy to price compare if you are willing to do the work.
What about a new boat? A lot of boats in the trawler category you are going to be buying direct from the manufacture as opposed to a dealer. I know with a new car I never pay MSRP, so what about a new boat?

Thanks and look forward to hearing some great advice from you all.

Pricing on a new boat varies widely depending on the channels of distribution.

Channel 1-Through dealers. Sea Ray and Carver are good examples. They sell to the dealers for 30 or 35% off of the MSRP. Depending on the price of the boat, the retail customer should get anywhere from a 10% to 15% discount from MSRP and sometimes 20% on more expensive models. These are volume production boats sold through dealerships.

Channel 2-On larger boats this is more common. They may have captive dealerships in the US but owned by the brand. For instance OA, Sunseeker, Riva, Ferretti all have entities in South Florida. In some other places they might have dealers. These entities and boats do not get the range of discounts shown above. They might be able to discount 5% or a maximum of 10%. Some do not discount off MSRP.

Channel 3-Direct sales from the factory. Most of these companies intend to give you a price and that is it. They will perhaps negotiate a little which migt amount to 1% or 2%. Sometimes their price will fluctuate based on their business. If it fluctuates too much, it's time to run. Boat building isn't so profitable that they can start giving big discounts. Ask Northern Marine and their customers.

Classifying a few brands you might be considering.

Sea Ray, Meridian and Carver. They fit in channel one and you should get a substantial discount off MSRP. Carver is actually at 20%, Sea Ray at

KK has company owned sales locations but fits in Channel 3. Perhaps a very small discount. Nordhavn also would be Channel 3 as would Fleming. Marlow is the same but has been known to be more negotiable. Grand Banks can't make up their minds but now they're selling from the factory. They may give discounts of some amount because they're still getting more than when they were using brokers and dealers.

Here are some of the finances behind how this works. Note all prices would be higher as these are base prices.

Carver C40. Base price $491,570. Invoice price to dealer $393,256.
I would expect a 5-10% discount. At 10% the price would be $442,414. This would give the dealership a margin of 11%. A 5% discount to $466,991. That leaves a margin of 15%. That would be more the target of a dealership but they're not likely to refuse a lower number.

Sea Ray 590L. Base $2,326,698 Invoice $1,396,019. That's actually a 40% discount. So, I would expect to buy at 20% off for $1,861,358 giving the dealer a 25% margin or at 25% off for $1,745,023 giving the dealer a 20% margin. Honestly, I would negotiate for an even lower price but Marine Max would certainly be fine with 20% margin.

Now, let's take a $3 million boat working through a related US sales company that is stocking inventory and has a showroom. This entity is often treated like a brokerage and so they'd be paid $300k commission for a sale. That's likely though 5% for salesman, 5% for company. They might then drop the price another $50k, maybe $100k.

Now a factory. If they've always been factory direct, probably no discount. If they've changed and were paying 10% or more, they might discount $50k-100k on a $3 million boat.

It's very complicated. I will say this, when dealing with a factory or their US sales office. When you sit down you can probably determine very quickly if the price is negotiable. When they show you that, ask if there's any flexibility. They'll say clearly "no" or "perhaps a little, but not much." Then you just sit trying to get a feeling for how much.

Why not negotiate from the other direction? Ask the dealer what he considers to be a reasonable profit on a new boat then negotiate on that mount. If you're doing it this way I would expect him to show you the dealer invoice. He may also be up for additional cash or discounts from the factory but those are his to keep.

GFC said:

Why not negotiate from the other direction? Ask the dealer what he considers to be a reasonable profit on a new boat then negotiate on that mount. If you're doing it this way I would expect him to show you the dealer invoice. He may also be up for additional cash or discounts from the factory but those are his to keep.

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Certainly a method with large run production boats.

If they're the manufacturer though or in some way directly connected, there is no dealer's invoice.

Oh, the invoices for Sea Ray, Carver, Marquis and a few others are available online.

http://www.seedealercost.com/boats

Great information. A lot of what I expected, the big pump'em out factories (Sea Ray etc) operate more like a car dealership and you can and should get some discount if you negotiate.

Other brands (North Pacific Yachts) are more like a custom home builder I would imagine. Since they only manufacture a few a year the margin is slim and what you are paying reflects that. In this case while the price might not be too negotiable you might be able to get some perks thrown in for the same price.

Now once the boat is already built then you are pretty much stuck with what you have and the price at that point is also pretty much set I would think.

I am more interested in this type of boat myself (North Pacific, American Tug, Nordic Tug etc) so it would be more of a custom build. Thank so far for all the good info.

DDorr said:

I am more interested in this type of boat myself (North Pacific, American Tug, Nordic Tug etc) so it would be more of a custom build. Thank so far for all the good info.

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Subtle differences on those three. I know little about North Pacific. I am disturbed I can't find a physical address on their website. Perhaps I'm overlooking it.

Nordic Tug has a large number of dealers. American has themselves on the West Coast and two on the East. I would think of them both as "soft negotiating." Perhaps you start with a base boat price and you get extras added on at something less than MSRP for them. Maybe if you're talking a $700k boat you get it for $680k or perhaps more often you start with a $600k base boat, add $100k worth of equipment to it and get that for $75k.

A word on a boat like this and negotiating. Don't hesitate to ask if there's any room to negotiate. However, don't go for every possible dollar, don't turn yourself into "that customer". Don't put them in a position that they feel as the boat is built it's already one they're not doing well on. You want your builder to be profitable. It's to your benefit short and long run. Somewhere in the build process, it will come back to benefit you. They might go with a slightly upgraded freezer or watermaker or something and not charge you the difference. There's the old adage, "You work with them and they'll work with you." At the end of negotiations both sides need to feel they gave a little but weren't pushed to the limit. If one is buying a $700k boat then the last $10k or $20k in price shouldn't be material.

Look at Show Specials to get ideas on how far builders will negotiate. American offers a 435 at a $7,995 discount to $699,500 with free stern thrusters. So, they give a small amount off and give you something more sizable free. Turns out to be a reasonable discount in total. It's the old, "Ok, I'll pay $X if you'll throw in X" kind of negotiation.

Maybe another time, it's toss in a watermaker or upgrade the appliances.

BandB said:

Subtle differences on those three. I know little about North Pacific. I am disturbed I can't find a physical address on their website. Perhaps I'm overlooking it.

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I have a little experience with North Pacific Yachts as I am in the process of buying a used NP43 that is being brokered by North Pacific Yachts. (it appears as if almost all original owners of NP boats have North Pacific broker their sale when they are ready).

When you deal with North Pacific Yachts, you deal with Trevor Brice. Trevor is in Vancouver Canada. If you call the 800 number, you will likely get a very nice lady who answers the phone. She is located on the East Coast of the US. She and her husband own a NP 43.

I just did a survey with Trevor last Wednesday. I have been working with him for a couple of months. I now understand why all the NP owners that I have talked to not only love their boats, but also really appreciate working with Trevor.

NP is a small operation with very low overhead producing very nice boats.

dhays said:

I have a little experience with North Pacific Yachts as I am in the process of buying a used NP43 that is being brokered by North Pacific Yachts. (it appears as if almost all original owners of NP boats have North Pacific broker their sale when they are ready).

When you deal with North Pacific Yachts, you deal with Trevor Brice. Trevor is in Vancouver Canada. If you call the 800 number, you will likely get a very nice lady who answers the phone. She is located on the East Coast of the US. She and her husband own a NP 43.

I just did a survey with Trevor last Wednesday. I have been working with him for a couple of months. I now understand why all the NP owners that I have talked to not only love their boats, but also really appreciate working with Trevor.

NP is a small operation with very low overhead producing very nice boats.

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Thanks for providing the information. I appreciate it. Next time you see him, suggest he puts location on his website. It might be important to someone to know where the people they'll be dealing with are, even if just the city. I have the same issue on the factory, that I like disclosure of location. Just odd to see on the Contact page, "Head Office" and phone number and not even a mailing address.

Otherwise a great website. Great information from you as well.

BandB said:

Thanks for providing the information. I appreciate it. Next time you see him, suggest he puts location on his website. It might be important to someone to know where the people they'll be dealing with are, even if just the city. I have the same issue on the factory, that I like disclosure of location. Just odd to see on the Contact page, "Head Office" and phone number and not even a mailing address.

Otherwise a great website. Great information from you as well.

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I actually agree with you on the address. I think a mailing address should be included in the website information.

dhays said:

I actually agree with you on the address. I think a mailing address should be included in the website information.

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Will mention that to Trevor tomorrow!

Rob

"Since they only manufacture a few a year the margin is slim and what you are paying reflects that."

The dealer markup is usually in the area of 20% , some higher some lower.

One recommendation I can not stress to highly is to contract that the vessel will be surveyed before cash changes hands , and the builder/dealer must solve the problem.

YOUR surveyor at your cost. Really cheap insurance.

A new boat pre purchase survey is at least as important as surveying a 40 year old boat.

FF said:

"Since they only manufacture a few a year the margin is slim and what you are paying reflects that."

The dealer markup is usually in the area of 20% , some higher some lower.

One recommendation I can not stress to highly is to contract that the vessel will be surveyed before cash changes hands , and the builder/dealer must solve the problem.

YOUR surveyor at your cost. Really cheap insurance.

A new boat pre purchase survey is at least as important as surveying a 40 year old boat.

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I completely agree. New boats can sink at launch. I had a friend by a brand new boat, took possession in the water. He owned it for over 1 year before he found out the vessel was a demo, was used in filming a boating show and was accidentally run up on the rocks during the filming.

They hauled, it, patched it, bottom painted, relaunched it and sold it as new.