Passage Nautical: Yacht News & Know-How

Should You Buy A New or Used Boat?

Jul 17, 2019 1:02:33 AM / by D Reynolds

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New or used? There is no right answer. 

It all depends upon your likes, budget, mechanical aptitude, how much time you want to spend boating and your risk tolerance.

NEW:                                                                 USED:

  • 3-year stem to stern warranty covers all parts and labor
  • 7-year structural warranty
  • All systems new and the latest technology
  • Simple routine maintenance for many years of ownership
  • Higher entry price
  • Lower ownership costs
  • Responsible for all repairs and parts
  • May be unknown cost for repairs and upgrades from lack of servicing in the past
  • Non-factory changes that affect use
  • Completing deferred maintenance and needed equipment upgrades at time of
    purchase
  • Lower entry price
  • Higher maintenance costs

Many of us simply prefer new or used. Do you like the look and feel of pristine, unused equipment and the security of new, or do you get a sense of personal satisfaction by shopping on price and don’t mind refurbishing? Or maybe only a used boat fits your budget?

Going into a purchase knowing what the long-term and short-term gains and losses are is paramount to a successful ownership experience. And that is what we want to help you with.

As you read this, please know that we sell both new and used and pride ourselves in creating a transparent transaction so you are served as best as possible in your boat purchase. Our goal is to match your personality, budget, likes and goals to the best boat. We are not a transactional business, we are a lifestyle business and as such are committed your lifelong boating pleasure.

OPERATING COSTS

One of the most valuable benefits of a new boat is that it's new! You’re not inheriting any previous known or unknown problems and deferred maintenance. A new boat, and the warranty it has, insures years of carefree operation. And with the advances in technology, the gear you get on new boats have longer life cycles and lower maintenance costs in general.

The great thing about a warranty is that it covers you for everything, and with the Beneteau brand, this coverage is a 3-year stem to stern warranty, covering all the equipment installed on your boat, from pumps to engine to rigging. If something goes wrong, you simply call us and bring your boat in for inspection and correction. This is worth real dollars. (We also have a mobile service).

Your annual expenses on a new boat for a good number of years are going to be for routine maintenance. And if you do the regular maintenance as recommended, your boat will continue to service you happily for many years.

A used boat is sold as-is where-is and all repairs, parts replacements, upgrades, and maintenance are out of pocket expenses for you.  With marine repair rates ranging from $75 - $135 an hour, vendor travel time to your boat, or your time to take the boat to a service, costs can add up quickly.  Your operating costs for a used boat, given all the first year costs and replacement parts is higher than new boats.

Finding reliable, independent marine repair providers is not easy. There is no licensing in this industry or training schools. If you buy a brand without a local dealer for assistance, or a boat that is no longer manufactured, it’s not always easy to get replacement parts and repair information. This eats up both your time and money and can sometimes involve costly modifications to fit in new equipment.  

If you prepare yourself with the knowledge that every used boat will require some upgrading or repairs at the time of purchase, as well as performing any deferred maintenance such as new bottom paint, engine service, and systems servicing you will be in a much better position financially. 

Expect to invest at least 10% to 20% of the purchase price into these costs at the time of purchase depending upon age and condition. This is one area used boat buyers sorely underestimate. If you take to heart the realities of used, you're purchase will be a good one. Knowing the first year cost to own should be part of the buying budget as well.

NO UNKNOWNS

You may be one of those people who prefers to buy new because you’ve had bad luck with used boats, cars or other goods in the past and don’t like to inherit other people’s bad care habits, ignored problems or unknown deferred maintenance. There is the satisfaction and security of having all new and the latest, state of the art equipment knowing it will be that way for years to come.

With a new boat, you start with everything in working order, and you’re off and running into your boating life without any delays or unforeseen setbacks. Every system is manufactured to the latest commercial standards and regulations. You know what you’re getting. You’re the first one using the boat, sleeping in the beds, making the maintenance decisions and setting the standards of care. There are no unknowns.

When you buy a used boat, normal wear and tear is to be expected and can be seen upon inspection. The hope is that all important issues - seen and unseen - are found in the survey. A survey is a visual inspections and mostly dockside operations of onboard systems that is completed in a day. Intermittent issues may go unfound. Recommendations for repairs and upgrades are based on national standards as well as commonly understood maintenance principals. 

While wear and tear is normal, damage and abuse is not normal, and if it can be detected, is reason to reconsider. Unfortunately, not all abuse is visible and this is the area that can rack up money and disappointment in the purchase, as well as discomfort with a “what’s next” reaction when unforeseen things occur. Type of neglect or abuse can include: 

  • Repairs made incorrectly or performed utilizing inadequate parts or the wrong parts
  • Engines, power systems, etc. pushed beyond their limits that may be damaged or worn out even if they have relatively low hours
  • Cables, wiring, electrical components that have been stressed and suffered internal damage
  • Non-standard modifications that are not disclosed
  • Changes to original factory systems or parts 
  • Manufacturer service intervals that are not adhered to lowering the life span of the onboard equipment
  • Equipment whose useful life is coming ending

With used, you should have a comfort level with the unknown and that things may come up after the purchase. Good surveys and inspections are paramount and we strive to get you the best.

SECURITY

One of the most significant and undervalued new boat benefits is the warranty, and what comes with that is our fully staffed Service Department. You’re only a call away from getting operational answers, repeating training on boat systems, and obtaining qualified and factory authorized service.

From day one, you know the integrity of all your systems. A new boat gives you continued operation and very few service interruptions.

You boat more with a new boat and have a greater sense of security that there are no unknown issues. We're your support system on all fronts of ownership and maintenance, and a strong manufacturer stands behind us.

A warranty is also a recommended roadmap to knowing what regular care and maintenance is required to keep your boat in top condition. Following this will pay off in higher resale value and more overall enjoyment.  

Just like a car that has been dealer serviced versus by random contractors, when you go to sell, the security you pass on to the next owner with a regularly maintained boat by factory trained techs will pay off. Big time.

Know that even with the perceived savings, used boat purchases carry more risk than new, as you really don't know 100% what you're getting. This is usually the most unrecognized part of a used boat purchase. There are some very good used boats on the market, but there are bad ones as well. This is where our expertise comes in.

Understanding that you’re responsible for all upfront and ongoing repair costs, on your own to organize services, repairs, and maintenance, and taking care of known and unforeseen after-purchase problems will help alleviate discomfort.

If you keep in mind that condition and price are an inverse relationship, you won’t have unpleasant or shocking surprises. You do get what you pay for here.

The security you get when buying used is supported by your broker, hopefully us. When we help you with a used boat purchase, you’ll get a market analysis and a great education in how to see value and know what constitutes a real “bargain”.  

If you budget for the unknown and for the upgrades you need as part of the purchase process, you will be in a much better position for a good outcome. This should not be overlooked or you will be an unhappy buyer, and this could infect your joy of ownership.

DEPRECIATION

 This is by far the biggest misunderstood part of buying new or used. All boats depreciate. Period, Just at at different rates. This is based on the brand, age, equipment (diesel vs gas engines for instance), condition, history (charter vs private ownership) and style.  Sometimes used boats can have a greater deprecation than new.

Trends change, consumer preferences change, and technologies in design and equipment creates certain desires and demands in the market. Bell bottom pants will always come back, but old designs with uncomfortable handling characteristics or narrow beams will never be in style again.

The obvious attraction for purchasing used is price and the belief that depreciation is gone. Not. You could buy a used boat and after 5 years be in a worse shape (net sale gain) when you sell it than a new boat, again depending upon the factors previously stated.

When you buy a major brand that keeps producing new boats and are popular on the resale market, your depreciation is very reasonable, and when considering the entertainment and vacation value of the boat, the depreciation over time is minimal.  

It’s true that your first year of any purchase is the highest rate of depreciation, but unless you made a very bad buying mistake you won’t be selling anytime soon and have to think about that.

A brand like Beneteau is one that has the lowest depreciation rate than any other brand. The new models that come out on the market increase between 2-5% every year offsetting the depreciation of of used models.  A premium brand like Beneteau has an average of about 8% in the first few years, versus other brands at 10-15% depreciation.  Factoring in the increase of new boats, the net depreciation is about 5% per year the first 4-5 years then tapers. The very sought after models will fare even better.

CONCLUSION

In your search for a boat, the most important criteria is an open mind to consider the factors and balance the urges to go solely on price, get overwhelmed and buy just to put an end to decision making, or ignore facts. These are the biggest pitfalls.

Buying a boat is an emotional buy no matter how much we work to make it a rational process.  It just is. There will always be one hook that keeps getting you, and it will either trip you up or serve you, depending upon how clear you are with long term goals, expectations and real costs.

The reality is that the demand for newer, used boats is great and these boats go for asking or close to it. These are great values, but not always “bargains”. It's a buyer's market these days so sellers are sticking close to asking prices more often.

We have tools and people to help you. Because we have been doing this for over 30 years, we have the experience to make the buying journey painless and easy, as well as easy.

 

Topics: Insider

D Reynolds

Written by D Reynolds

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