Can someone explain blue book values?

R

RLWsnook

New Member
Feb 14, 2010
59
Sandusky
Boat Info
Boatless
Engines
Boatless
Ok, so I've been looking at blue book nadaguides.com and Boat us (blue book) values... and they are for the most part WAY under what people are asking... 20-30% or more... and those are the retail values of the boats that are that much under... So for example if the blue book value for retail is 15,000 most people are asking like 18,000 or more..

Am I looking at something wrong, or do people really pay this much of a premium... or what's the deal?? (I thought this was a buyers market not a sellers)

I've read 100's of threads about how the market is different in each area... but my section of boats I'm looking at is across the entire nation...

And what do you do in these cases? I emailed one guy who's boat was priced over double retail blue book, and he got offended that I told him the blue book value. (Mind you this is a boat that his dealer bought as a bank repo and he doesn't know the hours or the service records... But he said that it looks like it is in really great shape so that's why they can charge a 100% premium...)

Any guidance on this, and what kind of offers I should make on boats would be great... ie is there a rule of thumb my offer should be no more than 20% less than they are asking as to not offend.. or what's the deal?
 
The NADA values are based on a moving average of like boats as reported by boat dealers across the country. The thing to realize is that it is a national average, and it is also the average of all sales. That includes both the top of the mark well kept boats, to the kind of boat you described, a repo with an unknown history.

I would suggest you talk to folks local to where you are. Ideally, someone who has actually bought a boat in the recent past. You should also talk to your local Sea Ray dealer and local brokers keeping in mind that they do have an agenda to sell you a boat.

Henry
 
Ok, but should I expect to pay a premium to this moving average price for a boat with an unknown history?

I kinda get the sense that if you are a dealer, you should expect someone to come in wanting to pay average retail for a boat with an unknown history even if the exterior and the interior do not show any problems.

Note this is on NADA guides description of average retail "Average Retail Value — An average retail valued boat should be in good condition with no visible damage or defects. This boat will show moderate wear and tear and will be in sound running condition. The buyer may need to invest in either minor cosmetic or mechanical work."

But most of the boats I'm looking at 185's aren't listed at average retail. They are 30% plus above average retail. Some even 100% plus above retail.

What I'm really wondering is, am I in the wrong to go in and offer the average retail price of the boat for boats that are a bank repo and the history is unknown? even though it appears to have no problems or very minor ones..
 
IMHO - Part of the problem is all the repos that are being sold at deep deep discounted prices is pulling down the averages. The banks don't care what they sell for because what ever is left between sales price and what is owned the bank is just going to go for a judgement against the repoed owner.
 
If you pay average retail - just consider you got a decent deal.
 
In this market, I believe published price guides to be essentially worthless for the purpose you are attempting to use them for.

As Henry says, the guides are based on averages, but the problem with relying on them is average of what. Member dealers report actual sales to the guide publisher. Due to inability of buyers being able to finance boats and, therefore, dealers to sell them, the numbers of sold boats are a fraction of what it takes for the data to be statistically accurate.

Second, the recent sales activity, since about the 3rd quarter of 2008, most of the boats were sold due to reasons that are not normal. Forclosures, short sales, emergency liquidation of an asset due to other financial pressures on the owner severely skewed boat prices to the low side in a market where financing was difficult unless the buyer had either cash or stellar credit. Distressed boats are rarely in top condition so those sales reported to the price guides gave an inflated (inaccurate) value to the reported sale because some additional expense (many times significant) was usually necessary to make the newly purchased boat seaworthy and trustworthy.

Don't fall into the trap of trying to use auto purchasing logic on a boat. The parallels are few which usually leads to either over-paying or dissapointment, but seldom yield the right number.

Good luck with your search.............
 
For future reference - If anyone wants to buy my boat, don't offer less than my asking price 'cause you'll just offend me. :thumbsup:
 
Here is the thing that keeps making me scratch my head though.

The bank repo boats, are some of the most expensive.. at least the ones sold to dealers are that I'm looking at. Yes I am looking at slightly newer boats, and thus many have low hours and low use... (so I guess if maintained well they should be worth more... but you have no clue how the bank repo boats were maintained a big negative in my mind maybe I'm wrong.. )

But am I in the wrong for going into some of the dealers though and making cash offers 10-20% below their asking prices?

Or am I just being cheap?
 
I think you are doing what you need to do and have the right idea. On a Sea Ray with Mercruiser engines, even a doofus for a prior owner can't do a lot of damage in a few hours.......say 75-100 hours. Buying from a SR dealer who either traded for, is selling a repossessed boat for a bank, or bought the boat wholesale from a lender is an advantage because you can require that he go back and bring all the neglected and deferred maintenance current.

ON used boats sold thru brokerage firms, most sellers are advised by their broker to expect to negotiate by at least 10%, so an offer at 10-20% shouldn't be "out of the money". However, boats are not autos and buying them is different.

If you are getting offers refused, it is most likely that you have not convinced the dealer that you are a serious buyer yet. Looking at the boat and asking "Do you think the dealer will take $XXX" won't do it. Try looking at the boat then tell the salesman "I want to buy this boat today"........and shut up. The salesman will drag out a "BUYER'S ORDER" (which is a contract for purchase). Let him fill it out and when he pushes it offer to you for your signature, change the $ and add your contingencies for survey, maintenance ,etc. then (this is critically important) write a real paper deposit check to the dealership for 10% of the amount you want to pay. The check becomes your consideration in the contract and will prevent the boat from being sold out from under you. Now its time to shut up again.........listen to all the "Oh we can't take that," and "they'll never let me sell it for that".........to which you respond, "Well, maybe not, but if you want to sell this boat today, that is what I'm willing to pay for it." The goal here is to obviously buy a boat, but secondarily, you want to make them hand you your check back if they won't take your offer. In today's market, cash flow not profit is king and my bet is that a quick close @ 10% under asking money will buy most boats.

Good luck..........
 
Being a former GM of a MarineMax store, I know a little about how deals are considered. Do not be feel compelled to make any offer you do not like. Remember fair market valve means a willing buyer and a willing seller when neither are under any duress to make the deal. If you do not agee with the price, make an offer you fell good about. However if you are unable to close a deal because you are lowballing every offer, maybe you need to reconsider your desire to own a boat. Boats are not a necessity, they are a luxury. Find the boat and price that fits your style and enjoy the experience.
 
Thanks for the replies everyone.

The funny thing to me. The reason I'm coming to understand the average values are going down is because of these bank repo boats being sold at fire sale prices to these dealers or whoever buys them..

Then they want to turn around and sell them for what the average retail use to be or maybe more...

Well for a while i'm guessing that worked... and it worked well. For a while it was kinda more rare to get a bank repo boat, you had to know who to call, and what to do... But see the problem with that is, there have been soo many bank repo boats that the average numbers have started to catch up with the fire sale prices... Thus their margins are getting squeezed.

Really blue book values should be correct. the issue is, private sales of boats don't want to accept that there is so much supply out there, and the people buying these bank repo boats (to re-sell them) don't want to have their margins go down...

Now for the private seller this sucks. I feel bad for them of which I assume many of you are or are trying to be right now. But for these dealers, and the people trying to flip these boats... It's like, how can anyone feel bad for a situation they created.
 
The average describes a value for all sales. There are an equal number of sales at numbers below the average, as above the average. That means when talking about a specific boat, its price can be legitimately above the average, or below it.

A boat selling for the current average, that is in well 'average' condition is a fair deal. You have to exclude the cost side from this discussion in this environment. Some dealers can buy boats at lower costs through their bank contacts, or having cash to buy a boat when a really motivated seller comes through the door and needs cash more than realizing book value.

Henry
 
Henry,

I hear you and agree. Boats can be worth more or less based on the shape of the boat and so forth.

The thing is, every boat I'm looking at is pretty much the same low hours minimal wear and tear... there aren't too many newer 185 sports on the market that are being sold because the engine doesnt work, or whatever... At least not that I've seen or that they have disclosed.

That being said... I think it's hard for some people to realize what average is... Just because say a 08 boat is in nice shape. compared to say a 02... doesn't mean that it is worth more than any other 08 that are in the same "average" condition.

Now I could see why some older boats that are in really good shape, do warrant these higher prices... higher than average...

But the issue is "average" for boats that are 2 maybe 3 years old is very different from average for boats 5-10 years old...

See what I guess the real question is... What is average?

How much wear and tear is normal? I've looked at just about each and every 185 on the market today... and they are all in such a tight range of what type of shape they are in... I'd be hard pressed to see why some of these boats should deserve the premium they are asking for them.

And so it comes down to maintenance... which one has been maintained the best... But for many of these newer boats... they are a bank repo... so that is a wash....

It's really a crap shoot as to which one is really and truly worth more... or which one deserves a premium.

But to come to the market with a boat what every other boat looks like every other boat on the market and try to warrant a 30% or more premium to average prices is what doesn't make sense to me...

I"d love to see or have someone explain to me how any of these boats that are bank repos and are asking 30-50% premiums over the average retail price warrant these prices...

I mean I guess some people will pay it... And that's sorta what they are looking for... but...
 
In one part there is a big difference in values between a 2-3 year old boat and a 5-6 year old one. There are going to be more hours on the older boat, and even if there are low hours, things wear out due to age, e.g. canvas is faded, cushions not so new, a little rust etc.

Part of it is also market preference and part is based on the idea that a 2-3 year old boat is more likely to get financing than an older one.

To answer the what is average, you have to make the group as small as possible in the terms of range of ages, and features. A lot of boat options cost a lot of dough. To put a windlass on a boat is $ 2k, a gennie $8-10K, new canvas 2-3k etc. A larger engine with a BIII, vs smaller engine and alpha drive is a big difference. Does it come with a trailer? How good is the trailer? and so on

But you really have to disconnect the cost side from the selling side. Think of it this way; You inherit a house from your great aunt. You already have a house so you decide to sell your great aunt's. Turns out she bought the house in 1962 for $14,000.00. Does this mean you have to sell the house for $14,000.00? Of course not, you sell it for market.

Henry
 
Henry, I agree you have to make the sample as similar as possible...

But most of the 185 sports have the same options... and I factor in the options into the NADA pricing...

I'm not looking for a 100k+ boat so big option differences aren't really there...

That being said... You are right you have to sell it for the market price. But the thing I am saying is if the banks are selling the boats for such fire sale prices, that discount should then be passed along to the consumer.

For example: A boat dealer that goes and buys a boat for 10 grand shouldn't be looking to turn it over for 20 grand... when before they were buying the same boat for 15 grand and selling it for 20 grand... there was a reason that they were able to pay 10 grand for the boat...

You see what i'm saying? it appears to me that these dealers should be making the same margins and willing to pass that savings they got, to make the same types of margins.

So when you say you can't look at the cost side, i'm saying you have to look at the cost side... A dealer is going to want to make a specific margin on a boat. if they buy that boat for more or less should determine what they are willing to sell that boat for... Grant it that the boat is selling within the market value or NADA value assuming the boat is close to average...

If I were a dealer, I'd be stupid to go out and pay above average retail on a boat (on an average boat), in hopes that I could sell it for even further above retail value...

And further to assume that I could then turn around and profit even more because the prices are cheaper is kinda funny to me.

Yes you might find a great deal every once and a while, where you make more money... but if every boat dealer is getting these deals... that's not going to work out so well.. Simple supply and demand.

the market won't support pricing like this...
 
"I"d love to see or have someone explain to me how any of these boats that are bank repos and are asking 30-50% premiums over the average retail price warrant these prices... "

I recently just dealt with this on a few different deals, so heres food for thought.

Since there are so many repos out there it may be that the "repo" boats you are looking at the people who owed the bank money on the boat owed more than it was worth. The banks I dealt with had never seen the boats or even cared to look at the market for them, they looked at what the boats were on the market for, what the customer owed on the boat and what the boat was appraised at when it was bought. In general they have no idea what the market really is.....

UNTIL they go to finance it for the next buyer, then the price is obviously lower!

Moral of the story is, there is usually a reason a boat is priced higher than another, sometimes its condition and others its all the owner can possibly afford to sell the boat for!
 
sfergson727 said:
Personally I am glad to see the dealers not giving away their inventory. Who decides what profit the dealer makes on a boat, why is it our business? They will sell the boat for what they want. period. The are not concerned with you feeling you were treated fairly, nor should they be. They are in the business to make money, end of story.

I know you aren't looking at expensive boats, but imagine yourself in my shoes. I owe about 215K on my boat which I bought in 2007. The original selling price was a little north than 240K, which was typical for a 340, not a great price, but not a bad one either. Fast forward two and a half years later...What's the NADA on my boat??

I don't want to commit suicide, so I haven't checked it recently. Last time I looked it was around 160K. So I axe you, mister boat buyer, what do you think about losing 80K value (minimum) in two and a half years because idiots in Washington can't get their act together.

The market had better start supporting prices like this and higher, because if it doesn't that means that poverty wins, as our economy will never improve. I will not and can not bank on the US economy being shot forever.

As soon as people stop giving their boats away, the buyers will be forced to pay more for their toys, and you know what? That is a good thing.
Click to expand...

+1 Couldn't have said it better

As a side note, Scott I have clients who ponied up $ 140 million each for new new containerships two years ago that can now be replaced for $ 60 million. So it could be worse!
 
Last edited:
Carver370,

The thing is most of the boats have been sold through auctions to dealers. Or at least that's my understanding.

So if a dealer sees a boat. And it is for sale in the auction over the retail value. why in the world would they buy it?

This is a risk the banks take... thus the reason they charge like 10% interest...

And for individuals who owe more on the boat than it is worth.. that's kinda their deal as well... If they can't afford to pay for it, it is taken from them or they have to declare bankruptcy... and then it is on the bank to recover as much money as they can from the boat... hence the fire sale auctions

I would be very confused if some how these dealers were all paying high prices on these boats (above retail) in hopes they could flip them for even more.. in todays market..

What I think is going on, is this business use to be pretty lucrative, when there were fewer of these types of boats around... but now, with the extra supply... it doesn't support itself like it use to..

I dunno I could be talking completely out of my rear end... But this is just my theory...
 
sfergson727,

Couple points.

1. Regardless of what the market has done, there should be a value at which the boat is worth. It might not have found a bottom yet, but that doesn't mean it won't..

2. IT sucks what has happened but unfortunately you got a new boat at probably the worst possible time (of which you couldn't really have known)... and got screwed because of what others have done.

3. This being said, Sea Ray along with all the other boat makers also has to adjust things as well. They are very likely making far fewer boats now. which will in years to come overall help the used market. but it is going to take time to work through the current inventory.

IMHO you should be wanting a big purge of this used market. Get rid of the inventory that is out there, and all of the inventory that people bought that couldn't afford.

The major issue when it comes to our economy is that the reason we got into this mess, was easy money... Low interest rates and the government forcing banks to loan money...

Now... the comical thing is the geniuses in our govt come up with a solution to our problem. Lend more money and pour gasoline on the fire... (just wait for the next time this happens things will be a lot worse and when it does get ready to short the market... SDS)

Now as for your question about what do I feel as a boat buyer when you have lost more value on your boat than you would have due to people in washington? Do you want an honest answer? Because honestly it benefits me... it sucks for you... But as a buyer, or someone looking to get a boat, I am trying to take advantage of that very issue... Because I know that in a few years this inventory will be worked off.. and I won't be able to get that kind of deal again..

Now for the above, how I think you should feel... Unless you can't afford your boat (or want to get a new boat in the next year or so), it shouldn't really effect you much. Because if you say come to the market in 5 years to sell it... there are going to be far fewer boats in the few years newer than yours... thus adding to your boats used value... And by then we should have worked through this and have a stronger economy... Thus providing a much stronger market for your boat.
 
You must log in or register to reply here.

Forum statistics

Threads
113,187
Messages
1,428,217
Members
61,099
Latest member
Lorenzo512
Back
Top