Why did my 300 lose so much value?

[MichaelNJ]

I bought my 300 Sundancer in August '04 for $115,000

It's pretty loaded: Radar, Generator, Bow Thruster, Windlas, Cockpit Fridge
I upgraded the chartplotter to a color unit. I installed SmartCraft SystemView 5000, Upgraded to Camper Canvas with new Canvas

Now after 2 1/2 seasons I was offered $73,000 on a trade. I know that's wholesale not retail but what's the normal spread?

I thought Sea Rays held their value better. I can't believe the boat cost me over $40,000 plus the money I put in in only 2 1/2 seasons.

 

[Hampton]

I don't think you'll actually suffer that great of a loss, but the new boat deal has its disadvantages.

I am not an expert, but it appears that I'm saving a little more than 100,000 by buying my 2005 340 with 130 hours on it, rather than buying the exact same boat in a new 2006.

My figures are probably not perfect, but I think they retail at about 305, and sell for 265 (new)?

Some people can afford the new boat thing. I bought my 250 new in '97 for somewhere in the low 50's. Now, it's worth about 30. The vast majority of the depreciation occurs immediately, and in the first couple of years. Over time, that is absorbed somewhat through a decreased rate of depreciation and inflation.

Getting into and out of boats can be VERY expensive. I guess that's why they say that you should buy the biggest boat you can possibly afford. Buy and hold. You know what you've got, and you don't have to pay for loan origination, dealer commissions (2X), tax....

Buying new boats are for two kinds of people: Filthy rich, and long term owners. You have a beautiful boat. If you really need to move up, move up in the same year group. You'll end up with less of a hit than if you'd bought the bigger boat new in place of your current boat.

I've though long and hard about this topic. People get 2-foot-itis. The dealers make it work through trades and increased time in financing, and getting people further and further upside down in payments. There's only 2 ways out - death, and buying your way out.

I'd trade into a similar year or one year newer. Either way, you'll be happy and not that bad off. In hindsight, I've told people that the way to go is to buy a 1-year old boat with a five year warranty. Then, do it again after 3 years.

 

[MichaelNJ]

Let me provide some more info. It's not really 2 foot-itis. I wouldn't bother going to a 320. It's not worth all the extra money.

I'm looking at a Meridian 341. It was redesigned for 2006. So it's lot more boat than the 300. There is a dealer selling a used 2006 for about $45,000 less than what a new 2007 would cost. Plus this boat has an extended warranty and some additional options.

MarineMax offered me 85,000 on my trade toward a new '07. That was generous but there is some assistance from Sea Ray.

The other dealer is only offering $73,000 but that is on a trade on a used boat.

I didn't want to start a whole discussion on new vs used but I agree. I don't see the point of buying a new boat when you can buy a one or two year old boat and save a lot of money.

I would not buy a boat the same year as mine just to go bigger. If I'm going to spend this much money I want to start with something almost new and hopefully keep it longer.

 

[First Born]

I thought Sea Rays held their value better. I can't believe the boat cost me over $40,000 plus the money I put in in only 2 1/2 seasons.

I'm looking at a Meridian 341. It was redesigned for 2006. So it's lot more boat than the 300. There is a dealer selling a used 2006 for about $45,000 less than what a new 2007 would cost. Plus this boat has an extended warranty and some additional options.

Michael,

I know you are talking about losing about two of my boats so I am not trying to downplay your loss, but your quotes are hard for me to follow. You state you "thought Sea Rays held their value better". You purchased a new Sea Ray used it two and half years and are trading it in (trade in value during off season) and losing $40,000. You are looking at a different make boat that is used but only one year old (or less) and you are getting it at a $45,000 saving over a new boat. Ok again I am not use to looking at that large of a boat so maybe on a % basis you are right but to me it sounds as your Sea Ray is holding it's value better. If I have read correctly from the board the biggest depreciation on boats happen in the first three years. So with your Sea Ray you are at the slow down approach however, how much will the other boat have depreciated when it reaches year 2 and 1/2? Maybe I am looking at this wrong and it is kinda late but I just am not following your math. :huh:

 

[PMvdb395DA]

If I have read correctly from the board the biggest depreciation on boats happen in the first three years. So with your Sea Ray you are at the slow down approach however, how much will the other boat have depreciated when it reaches year 2 and 1/2? Maybe I am looking at this wrong and it is kinda late but I just am not following your math. :huh:

This is the right answer... Buy that other boat and wait 2 years and look what you have lost than.

You can buy a 380 DA '02 for 140K or less... what do you think what this boat cost in 2004??

If you buy new than the margin for a dealer is less...
I think most of the time that they start to get a profit when they sell your used boat.

 

[jg300da]

Michael,
I had the same question you did in looking to trade up to a new 340. Look at the asking prices on Yachtworld for a 2002 300da. They range anywhere from $78,000 to $120,000. I can tell you that they have sold only one out of about 40 listings since August, and anything priced over 90,00 is not even getting a call. They simply aren't moving. The market is too soft. I paid $125,000 new in 2002, the fact that you paid $115,00 two years later shows that at that time the resale value was very strong but has suffered greatly with the changing market. There are a ton of used Searays out there and not enough demand especially with the dealers and Searay offering great incentives to buy new. Just realize that the better the deal on the trade in side, the less room for a deal on the new purchase side.

 

[MichaelNJ]

First Born, I didn't buy the Sea Ray new. It is a 2002. I bought it at the end of its third season after I thought it had already depreciated a lot. It only had 74 hours on it.

JG, Good points. Sounds like yougot a great deal when you bought new.

I think the market defintely softened. There are definitely a lot of Sea Rays on the market. Typical Supply and Demand situation.

 

[Stray Cat]

Michael, are there a lot of 300DA's in your geographic market? When I wanted to trade my 270 in on the 300, I learned that there were so many 270's within 2 years of our model in our market that it "commoditized" our boat making it a less value on a trade.

Have you considered selling your 300 on your own?

 

[Skip]

Michael,
This is a bit far afield, and I am probably telling you something you already know..
There is a Meridian 341 on my dock at Quantico. An 05 model, I think, with 8.1s. She rarely moves because of the fuel consumption. I talked to the owner and he simply quit making long runs because of the fuel usage with the big blocks. I'd guess something in the 36-40 GPH range. The last time I saw the boat out it was running at 1500 RPMs for about a 15 mile run downriver. Of course, every situation is different as regards fuel budgeting.

A second observation is that depite a pretty solid maintenance regimen the boat appears to be aging rather quickly. She just got new canvas because the factory product did not hold up well.

Just a couple snapshots, and not a condemnation of the brand--

regards
Skip

 

[First Born]

First Born, I didn't buy the Sea Ray new. It is a 2002. I bought it at the end of its third season after I thought it had already depreciated a lot. It only had 74 hours on it.

Ok I missed that point. Good luck with whatever you decide.

Wesley

 

[Divedaddy]

For what it's worth, I think your sense is good. Just for grins I played with the NADA Blue Book calculator for a 2002 300 DA. The low retails without options is 73,300 and the average retail is 82,950. I put in a bunch of options common to Sea Rays and your description and came up with a low retail of 95,575 and an average retail of 108,005. I have no way of knowing of these upgraded values represent your boat or not , but you can run through the same at boattest, here's a link : NADA Link

You can also look at broker listings and get an idea of what's being asked - value is probably 90 - 95% of list. Here's one in our area that I looked at in November - it's in very good shape:

You can also use Marine Max's Brokerage listings and search by region, etc. I just pulled the national listings for 30' Sea Rays and came up with a 2002 300 DA in CA listed at 119,500 and two in FL listed at 89,900.

Location / region has a lot to do with, as well as time of year. But 73,000 sounds entirely too low. If you boat is in good shape, with the upgrades you have, I would expect a good bit more.

 

[Hampton]

Michael,

I, too, missed that you bought your boat used. That's a little disconcerting. I would have hoped that the majority of depreciation had already passed. If you've got time, the right buyer will come along.

The dealer is counting on us losing patience or taking the easy way out. Those places aren't slums either. Someone's paying for them.

 

[fwebster]

I think your consternation is a product of 2 things.......a retail to wholesale comparison and the fact that demand was high 2 years ago and boat sales are quite slow right now.

Any buyer why pays retail then tries to trade a boat is faced with comparing retail on the buy and wholesale on the sell....its not an apples to apples comparison and it is unfair to condem Sea Rays for not holding value on that basis. A more real comparison is retail to retail and in your case, the Sea Ray is worth more like $88-$92K with its equipment, if it is clean. That explains why the dealer is willing to take a trade.

If you think that the numbers on the Sea Ray are bad, buy that gas powered Meridian run it 2 years, then do the numbers. However, it is really a buyers market for bigger gas boats. If this is a boat you want, trade hard. The dealer would much rather have a 300DA in inventory than a slower seller.

Good luck with it..............

 

[jg300da]

You can also look at broker listings and get an idea of what's being asked - value is probably 90 - 95% of list.
Location / region has a lot to do with, as well as time of year. But 73,000 sounds entirely too low. If you boat is in good shape, with the upgrades you have, I would expect a good bit more.

More like 75-80%. Believe me, I researched this for 4 months. There is a glut of 280's and 300's on the market.
Remember, you can't expect the dealer to take 25% off retail when you buy and then ask for retail when you trade.

 

[MichaelNJ]

Skip, Thanks for that info about your neighbor. The boat was redesigned for '06. Not syaing that the quality would be better but it's a much nicer layout. The fuel burn you mentioned sounds about right for gas engines. I read a review and they reported 36GPH at cruise.

Performance and fuel burn are the two big drawbacks going from the 300 SD to this boat. Not that the 300 was exactly easy on gas.

Frank and JG, raise good points. 2004 was a good year and 2006 is not. There are a lot of 300's sitting out there. There weren't when I bought it.

There is no way I would be able to sell this on my own. I sold my last boat and it took me a year. Not because I held out for my price. I got a fair price for it, only $2,500 less than I paid with a broker which mean I actually netted more than that original owner. No one even looked at the boat for the year it was on the market. I advertised it all over and got little repsonse. The guy that bought was riding his bike and saw it. He bought it. I think he was kind of impatient and impulsive. He put it up for sale less than a year later.

There are a lot of '02 300's in my area. The proces are all over the map. You have to figure that the boat is worth around the lowest price it's being offered for in the area. But even the ones listed real low are not selling.

In reality, it doesn't matter what the selling price of the boat I want is or the trade in price of mine. It comes down to the delta between the two which is what I pay out of pocket.

I'll look at the Meridian and make an offer in terms of the cash difference. I don't think he really wants the SR which is why the trade offer was so low. If I was just buying the Meridian, I could probably do better than what he's asking.

Worst case, I can make a low offer and if he doesn't accept, I can walk away and stick with what I have.

 

[osd9]

Hey Mike:

I just closed (about an hour ago) on a 2003 410DA. I traded in the 2002 380DA that I bought in May of 2005.

Throughout my negotiations I ONLY concentrated on the difference. The price they gave me and the price I paid for the new boat only matter with the insurance company. Tax is paid on the difference and more importantly the difference is the amount that I pay.

That said, the market for large gas boats is soft...as you know....however, since you are buying an even larger gas boat, that market is equally if not more soft. I think you are doing the right thing by offering what you consider is a number (difference) that works for you. If they want or can make the deal, they will. If they don't make the deal, than it will be up to you to reconsider you finances and decide if you want to spend more or shop for a different size/type boat. OR, wait for the market to turn and enjoy the 300DA for a few more years....

Either way, I wish you the best and keep us posted......

 

[fwebster]

I'd say you have the right attitude about the trade. Try to be objective and understand the market pressures at work.

It looks to me like you are getting an "out of the book" wholesale number on your 300DA. I have a close friend who was moving to a full time wet slip and needed to trade an '03 300 w/outdrives for a 320DA w/inboards and, adjusting for the year difference, your trade in number is about what his first offer was on a $170K boat.

Additionally, your 300DA is going to sell faster than most if it is clean and if it still looks like your signature photo.......it looks different than the other 100 of them out there.....the dark canvas is unique and gives it a more contemporary color contrast which makes the boat appear clean and crisp. But, smaller DA's generally don't sell until Spring breaks and folks "get the fever" again.

The other thing going on in these market conditions is that if your Meridan is owned by a new boat dealer, he has other forces at work besides the value of the 2 boats. He has either paid cash for the Meridian or its on his floor plan. Either way, that affects his ability to take new boats for spring sales since his available cash/leveredge is at work on used inventory. If the boat is on the floor plan, he's paying the monthly debt service to his lender.......which could be $800-$1000/month. I'm betting he'd much prefer to have a fast spring seller like a 300DA for less money in his inventory.

He also will not make anything on t he Meridian until it is sold.


This is a time when I would make an offer that might have been considered ridiculous a year ago................

 

[MichaelNJ]

Congratulations Dom.

Frank, thanks for the advice. My boat is clean. I actually changed from Green Canvas to Tan. I needed to replace my plastic windows and I got a great deal on a new full Camper Canvas from a MarineMax on eBay. I bought the full set of canvas for $500. Less than the replacement windows would have cost. I just had to buy the aft bow from Great Lakes. I still have the Green Canvas but I prefer the tan.

 

[Bridog]

Mike, 73K sounds like a pretty low number. Looking at the NEW 300DA's offered by Marine Max your used boat should start to see an up swing this Spring. The new ones don't even have generators or even a windlass as an option. What are they thinking when they order these new boats? Are they trying to keep the MSRP down? Also why isn't the 300DA included in the new SR promotion? I would think if it was such a slow seller or if they wanted to move inventory they would include it with the new promotion they are offering. Is it possible your engine choices are keeping it low? Most of the unsold 300 DA's on the used market and leftover new 300DA's are with the twin 260 option. I'm not saying it's the reason, just something to consider. Anyway, I wish you the best with your new search.

 

[fwebster]

Isn't this one also a lame duck now that an all new 31 DA is offered?

That, however, usually works to the advantage of late model used owners since all the new tooling must be ammortized over the expected 3 year volume of the new boat, and that results in significant price increases on the replacement boats.