Buying a yacht tips

New -vs- Used Consider your option of new or usedmotor yacht and sell it after 3-4 years, annual
carefully. There are very good values to be had inmaintenance is likely to average around 4%. The
used boats. More first time buyers purchase newlonger you own it, the more it will increase as things
boats, while experienced boaters more often buywear out and breakdown. The first big hit usually
used. And with good reason. Experienced boaterscomes when an engine or generator goes bad
know that there is better value dollar for dollar insomewhere between 5-7 years. Obviously, if you
many used boats than new ones. They've alreadyown the vessel this long, suddenly the annual
had the experience of taking a big hit in depreciation,average takes a big leap. If you're buying used, then
along with the high cost of financing involved in ayou have to be prepared for this, whether it's an
new boat purchase. To help decide which is right forunexpected blister repair job, or some other problem
you, consider the following.that's not covered by insurance. Of course, with a
When we track the depreciation curve for many ofused boat, that fifty or hundred thousand you saved
the most popular builder's models by determining theoff the new price more than makes up for "big bill."
net annual loss in resale value, we find that the higherThe point is that in compiling averages, over time we
the vessel quality, the sooner the depreciation curveknow that costs can be reduced to annual
will flatten out. That means that higher quality boatspercentages for which an owner should be prepared.
proportionately loose less value than lower qualityFor twin screw diesel motor yachts or fishermen, a
vessels. For the above mentioned builders, theten year average will run around 7% annually. After
flattening out usually starts around five years, so thatten years even more. This accounts for all types of
by the time a vessel is 6 years old, the annual loss ofmaintenance from bottom painting to pump
value is only a few percentage points. If you trulyreplacements and engine overhauls. Moreover, this
want to know what the annual cost of ownership is,assumes that there is little or no deferred
add in the total principle plus interest to the annualmaintenance, and for a boat owned since new. If
operation and maintenance costs. Then, simplyyou're getting into a used boat with considerable
subtract the anticipated residual valve and divide bydeferred maintenance, that annual average can
the number of years owned. For a new boat, thisincrease dramatically, especially when serious
can be an enormous sum each and every year.problems gang up on you all at once.
Perform the same calculation for the purchase of anGet a Survey Marine surveyors universally
8 year old vessel and the cost of ownership comesrecommend new boat surveys, not just because
to only a fraction of that of a new vessel.they want the business, but because new boat
A general rule of thumb is that a new boat purchasesurveys often turn up as many defects as used boat
works out better for the owner who keeps a boatsurveys. Not only can the surveyor tell you a lot
longer than the average four years, or at leastabout the quality of the boat you're buying, but he
through the bottoming out of the depreciation curve.can help you get those problems fixed before you
Obviously, the longer a boat is owned, the less thetake delivery and head off warranty problems before
annual cost becomes. However, that doesn't helpthey become problems. See also More on Cores.
much as far as residual value is concerned unless weDiesel Engine Surveys Diesel engines over three
consider the original cost versus anticipated resaleyears old should be subjected to a full survey. Engine
value. Once we do this, we understand that whatsurveys are expensive, but the cost is nothing
they told us was really true: boats, like automobiles,compared to the repair costs you may face. As with
are not an investment but a major expense. If youany surveyor, seek out the best you can find.
plan to only own the vessel for a few years, or youEngines over 5 years old should either have a
anticipate that there is a chance you may have tocompression test or the injectors pulled and the
sell, by far a used boat will be your better value.cylinders inspected with a boroscope. See also It's
Gas -vs- Diesel Within the size range of 25-35 feet, itGot Recent Overhauls!.
is a myth that diesel power is more economical thanYacht Surveyors The way to find the best surveyor
gas. After about four years, diesel engines becomein your area is to ask people who know and are
much more costly to own and maintain. When a gaswilling to give you an honest answer. Its a mistake to
engine goes bad, it can be rebuilt or replaced for atake recommendations from yacht brokers or others
few thousand dollars while we measure the costs ofwho have a conflict of interest. Insurance agents,
diesel overhauls in the tens of thousands. Unless onecompany claims offices and yard managers are in a
plans to get a lot of use from his boat, gas enginesgood position to know which surveyors know their
are usually a better choice for boats up to 35 feet.business and who aren't in the pockets of brokers. If
See also Power Options, Gas -vs- Diesel - Part II.you want a good surveyor, choose your surveyor
With used boats, don't make the mistake of equatingcarefully.
low hour meter readings with good engine condition.The next most important consideration is to make
For the most part, engine hours mean little becausesure that the surveyor has adequate time to do his
engines deteriorate over time. Engines that are littlejob, along with good working conditions. The
used, gas or diesel, are often in worse condition forsurveyor can't do a good job if he's being hustled by
the lack of use. Also, don't succumb to the mytha broker or seller. Nor can he do a good job if too
that marine diesels last for thousands of hours. Theymany people are present on the boat. As the buyer,
don't. The average time between major repairs isyou should accompany the surveyor so that you're
around 6-7 years. Or, if you want to put it in termsavailable to see things first hand. Sea trials should be
of hours, around 1500 hours. Marine enginesconducted in open water, not restricted waterways.
deteriorate rapidly in a salt water environment.A brief run up a river or the Intracoastal, interspersed
Good boats with bad engines can turn out to be awith no wake zones won't do. If weather conditions
good buy when comparing price differentials against adon't permit an open water run, be prepared to
newer boat purchase, particularly for smaller boats,reschedule another day. Its extremely important to
and boats with gas engines where enginegive the vessel a good run.
replacements are easier. Many buyers find that theyAfter the survey, avoid letting a broker rush your
can get a good buy in a boat with clapped outdecision. They all say that if you don't sign today,
engines and rebuilding or replacing them. If you don'tthey got someone who will tomorrow. Its the oldest
mind the trouble, it may be worth making the pricecon in the book. Surveyors need time to consider
comparison. If the price works out, you end up withtheir findings, and the survey is not really finished until
a boat with new engines, a real comfort to any boathe has written his report. Most surveyors get their
owner.reports done in a day or two, so give him adequate
Older Vessels While used boats can represent goodtime to finish his job.
value, this is true only up to a point. The problemPurchase Agreements Make sure that your purchase
with some boats once they get beyond 10-12 yearsagreement allows you to cancel the deal if the vessel
is deferred maintenance. It is an unfortunate fact ofdoes not meet your standards. Include a stipulation
life that many boat owners cut a lot of cornersthat the sea trial must be conducted in open water
when making repairs, additions or improvements. Thisfor a minimum of two hours.
is particularly true when it comes to mechanical,If the seller warrants that he will repair any defects,
electrical and plumbing. While the interior may bemake sure that you get that in writing, preferably
beautiful, major systems may have been ignored. Onwith a maximum dollar amount attached. It is not
good quality boats, repairs are often done to a muchwise to allow the seller to repair deficiencies himself.
lower standard than the original, so that by the timeThe reason should be obvious, but many buyers
a decade has gone by, there may be a lot ofoverlook the possibility that the repairs that the seller
substandard maintenance and jury-rigging.makes may not be satisfactory. Indeed, they often
On older boats, these problems can accumulate toaren't. The best procedure is to negotiate a dollar
the point where it is no longer economically viable toreduction to the sales price and make the repairs
restore the vessel when considering the cost ofyourself, even if there is an element of uncertainty
refurbishment versus market value. Nothing can takeas to cost. Of course you should get cost estimates
the pleasure out of boating faster than to get inon deficiencies, and better still a contract price.
over one's head financially by underestimatingIf you can't get away from the seller making repairs,
restoration and maintenance costs. Whenat least stipulate in the contract that the repair firm
experienced boaters make reference to repairsmust be mutually agreeable to both buyer and seller.
always costing double what they think it will, they'reWhat you're looking to avoid is the shade-tree
not kidding or exaggerating. Estimating marine repairsmechanic who doesn't do the job right.
is extremely difficult, even for professionals. AndRemember that the broker represents the seller, not
nowhere is the statement, "You get what you payyou, the buyer. If you want to believe their
for," more true than in the marine business.representations, make them put it in writing. That
Be wary of vessel's with excessive amounts ofway you have a contract, not just a sales pitch.
deferred maintenance or jury-rigging. After theConcluding the Deal Don't be too quick to condemn
survey is completed, ask a yard to estimate the costan otherwise good boat that has a major problem
of repairs. If they can't do it, or are having a hardsuch as a bad engine. If you've done your homework
time estimating, chances are that you'll have a hardand have researched more than just a few boats,
time paying when the bill comes due. See also Allyou know what is available and at what price. The
About Buying Used and Older Boats.old saying that the devil you know is better than the
Cost of Ownership In addition to purchase price,one you don't applies. If you can get serious defects
interest and depreciation, the cost of ownershiprepaired well within economic range, you'll probably
includes maintenance and repairs, something ownersend up with a better boat than the next one you
rarely consider. For new boats, maintenance is lowlook at. The reason is simple: if the problem has
for the first three years or so. But after three yearsmanifested, it has become known. When you're
costs start increasing significantly. Regardless of type,looking at boats of comparable age, chances are
major machinery will often require major repairs inthose boats are also well on the way to having
years 5-7. There's a reason why warranties expiresimilar problems. Therefore, the more problems that
when they do, and that's because that's when thecan be discovered and repaired, the better off you'll
breakdowns begin to happen. If you buy a new 40'be.