| New -vs- Used Consider your option of new or used | | | | motor yacht and sell it after 3-4 years, annual |
| carefully. There are very good values to be had in | | | | maintenance is likely to average around 4%. The |
| used boats. More first time buyers purchase new | | | | longer you own it, the more it will increase as things |
| boats, while experienced boaters more often buy | | | | wear out and breakdown. The first big hit usually |
| used. And with good reason. Experienced boaters | | | | comes when an engine or generator goes bad |
| know that there is better value dollar for dollar in | | | | somewhere between 5-7 years. Obviously, if you |
| many used boats than new ones. They've already | | | | own 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 a | | | | you have to be prepared for this, whether it's an |
| new boat purchase. To help decide which is right for | | | | unexpected 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 of | | | | used boat, that fifty or hundred thousand you saved |
| the most popular builder's models by determining the | | | | off the new price more than makes up for "big bill." |
| net annual loss in resale value, we find that the higher | | | | The point is that in compiling averages, over time we |
| the vessel quality, the sooner the depreciation curve | | | | know that costs can be reduced to annual |
| will flatten out. That means that higher quality boats | | | | percentages for which an owner should be prepared. |
| proportionately loose less value than lower quality | | | | For twin screw diesel motor yachts or fishermen, a |
| vessels. For the above mentioned builders, the | | | | ten year average will run around 7% annually. After |
| flattening out usually starts around five years, so that | | | | ten years even more. This accounts for all types of |
| by the time a vessel is 6 years old, the annual loss of | | | | maintenance from bottom painting to pump |
| value is only a few percentage points. If you truly | | | | replacements 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 annual | | | | maintenance, and for a boat owned since new. If |
| operation and maintenance costs. Then, simply | | | | you're getting into a used boat with considerable |
| subtract the anticipated residual valve and divide by | | | | deferred maintenance, that annual average can |
| the number of years owned. For a new boat, this | | | | increase 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 an | | | | Get a Survey Marine surveyors universally |
| 8 year old vessel and the cost of ownership comes | | | | recommend 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 purchase | | | | surveys often turn up as many defects as used boat |
| works out better for the owner who keeps a boat | | | | surveys. Not only can the surveyor tell you a lot |
| longer than the average four years, or at least | | | | about 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 the | | | | take delivery and head off warranty problems before |
| annual cost becomes. However, that doesn't help | | | | they become problems. See also More on Cores. |
| much as far as residual value is concerned unless we | | | | Diesel Engine Surveys Diesel engines over three |
| consider the original cost versus anticipated resale | | | | years old should be subjected to a full survey. Engine |
| value. Once we do this, we understand that what | | | | surveys 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 you | | | | any surveyor, seek out the best you can find. |
| plan to only own the vessel for a few years, or you | | | | Engines over 5 years old should either have a |
| anticipate that there is a chance you may have to | | | | compression 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, it | | | | Got Recent Overhauls!. |
| is a myth that diesel power is more economical than | | | | Yacht Surveyors The way to find the best surveyor |
| gas. After about four years, diesel engines become | | | | in your area is to ask people who know and are |
| much more costly to own and maintain. When a gas | | | | willing to give you an honest answer. Its a mistake to |
| engine goes bad, it can be rebuilt or replaced for a | | | | take recommendations from yacht brokers or others |
| few thousand dollars while we measure the costs of | | | | who have a conflict of interest. Insurance agents, |
| diesel overhauls in the tens of thousands. Unless one | | | | company claims offices and yard managers are in a |
| plans to get a lot of use from his boat, gas engines | | | | good 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 equating | | | | carefully. |
| low hour meter readings with good engine condition. | | | | The next most important consideration is to make |
| For the most part, engine hours mean little because | | | | sure that the surveyor has adequate time to do his |
| engines deteriorate over time. Engines that are little | | | | job, along with good working conditions. The |
| used, gas or diesel, are often in worse condition for | | | | surveyor can't do a good job if he's being hustled by |
| the lack of use. Also, don't succumb to the myth | | | | a broker or seller. Nor can he do a good job if too |
| that marine diesels last for thousands of hours. They | | | | many people are present on the boat. As the buyer, |
| don't. The average time between major repairs is | | | | you should accompany the surveyor so that you're |
| around 6-7 years. Or, if you want to put it in terms | | | | available to see things first hand. Sea trials should be |
| of hours, around 1500 hours. Marine engines | | | | conducted 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 a | | | | with no wake zones won't do. If weather conditions |
| good buy when comparing price differentials against a | | | | don'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 engine | | | | give the vessel a good run. |
| replacements are easier. Many buyers find that they | | | | After the survey, avoid letting a broker rush your |
| can get a good buy in a boat with clapped out | | | | decision. They all say that if you don't sign today, |
| engines and rebuilding or replacing them. If you don't | | | | they got someone who will tomorrow. Its the oldest |
| mind the trouble, it may be worth making the price | | | | con in the book. Surveyors need time to consider |
| comparison. If the price works out, you end up with | | | | their findings, and the survey is not really finished until |
| a boat with new engines, a real comfort to any boat | | | | he 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 good | | | | time to finish his job. |
| value, this is true only up to a point. The problem | | | | Purchase Agreements Make sure that your purchase |
| with some boats once they get beyond 10-12 years | | | | agreement allows you to cancel the deal if the vessel |
| is deferred maintenance. It is an unfortunate fact of | | | | does not meet your standards. Include a stipulation |
| life that many boat owners cut a lot of corners | | | | that the sea trial must be conducted in open water |
| when making repairs, additions or improvements. This | | | | for 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 be | | | | make sure that you get that in writing, preferably |
| beautiful, major systems may have been ignored. On | | | | with a maximum dollar amount attached. It is not |
| good quality boats, repairs are often done to a much | | | | wise to allow the seller to repair deficiencies himself. |
| lower standard than the original, so that by the time | | | | The reason should be obvious, but many buyers |
| a decade has gone by, there may be a lot of | | | | overlook 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 to | | | | aren't. The best procedure is to negotiate a dollar |
| the point where it is no longer economically viable to | | | | reduction to the sales price and make the repairs |
| restore the vessel when considering the cost of | | | | yourself, even if there is an element of uncertainty |
| refurbishment versus market value. Nothing can take | | | | as to cost. Of course you should get cost estimates |
| the pleasure out of boating faster than to get in | | | | on deficiencies, and better still a contract price. |
| over one's head financially by underestimating | | | | If you can't get away from the seller making repairs, |
| restoration and maintenance costs. When | | | | at least stipulate in the contract that the repair firm |
| experienced boaters make reference to repairs | | | | must be mutually agreeable to both buyer and seller. |
| always costing double what they think it will, they're | | | | What you're looking to avoid is the shade-tree |
| not kidding or exaggerating. Estimating marine repairs | | | | mechanic who doesn't do the job right. |
| is extremely difficult, even for professionals. And | | | | Remember that the broker represents the seller, not |
| nowhere is the statement, "You get what you pay | | | | you, 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 of | | | | way you have a contract, not just a sales pitch. |
| deferred maintenance or jury-rigging. After the | | | | Concluding the Deal Don't be too quick to condemn |
| survey is completed, ask a yard to estimate the cost | | | | an otherwise good boat that has a major problem |
| of repairs. If they can't do it, or are having a hard | | | | such as a bad engine. If you've done your homework |
| time estimating, chances are that you'll have a hard | | | | and have researched more than just a few boats, |
| time paying when the bill comes due. See also All | | | | you 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 ownership | | | | repaired well within economic range, you'll probably |
| includes maintenance and repairs, something owners | | | | end up with a better boat than the next one you |
| rarely consider. For new boats, maintenance is low | | | | look at. The reason is simple: if the problem has |
| for the first three years or so. But after three years | | | | manifested, 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 in | | | | those boats are also well on the way to having |
| years 5-7. There's a reason why warranties expire | | | | similar problems. Therefore, the more problems that |
| when they do, and that's because that's when the | | | | can be discovered and repaired, the better off you'll |
| breakdowns begin to happen. If you buy a new 40' | | | | be. |