Depreciation.... How do you beat this monster ?

[Henry Boyd]

Henry... The FMV curve is what I am looking for. I would want to use it to know when to jump in and out of a boats life with minimal financial impact. Going in and out of a recession in the middle of the boats life cycle is going to complicate that curve, I am thinking

Dan,

We do this as part of our business on port and marine equipment. Even under the simplified conditions we encounter with respect to the equipment we are at best providing an educated estimate. We still can't predict the global economy, trade flows, or changes in technology, and we have clauses that say so in our contracts and reports. I don't see how it could be done on something as complex as a 40 to 50 foot boat.

The best you do is listen to guys like Frank Webster who have built up a sizeable body of institutional knowledge

Henry


Sent from my iPad using Tapatalk HD

 

[Blueone]

So I went on NADA and looked up some pricing. I chose a 42’ with a 13’ beam and Diesel. I didn’t add options just used base price for each. There were a lot of model and size changes over the years. Below is the breakdown in size. Suggested new is the dealer asking price at the time. The blank years are averaged until a similar size boat was available again.

Series 410 – 42’ x 13’ Beam
Series 40 – 41’ x 13’-2” Beam
Series 380 – 42’ x 13’ Beam
Series 410 – 42’ x 13’-10” Beam
Series 400 – 42’ x 13’-10” Beam

Based on this basic information it looks like the best time to get in is 2006/2007 and the best time to get out is 5/6 years later.

 

[Woody]

In my world this is not acceptable.

'Boat' and 'investment'...not complimentary terms. Putting $$$$ into boats is a loser if you're looking at $$$$...the monster can't be beat, only tamed a bit. Pick the right model in good condition, negotiate well, keep it up. The important factor is the quote above...what is acceptable to each of us? That's illustrated here at CSR with purchases of '70's models to a new 650Fly.

 

[Converse48]

Here is the boat depreciation curve that I use as part of the analysis. I've developed this over time using data points observed both personally and from others. It is far from perfect. This is how I came to add "must be at least ten years old" to my list of criteria when searching for my latest vessel.

The bottom line is that buying a boat is an act of "consumption" and not an "investment". That doesn't mean one should not try to minimize their losses, but the fact is that a boat is a depreciating asset and that depreciation expense needs to be factored in to decision making.

 

[Blueone]

It boils down to the used boat's condition being a huge variable in pricing, value and demand.

I just know that you should find the nicest, best maintained boat you can, bring her maintenance current and keep it that way, then keep the cosmetics condition as close to original as you can and you will have preserved as much of your investment as possible.

Frank ...I couldn't agree more. The curve is just another check on the list in my opinion. That's all I was trying to figure out.

Thanks for all your reply's ...it was very interesting info and perspectives

 

[Blueone]

Here is the boat depreciation curve that I use as part of the analysis.

Converse... your chart and mine are fairly close....seems like 8 -10 years is probably the best bet in this case.

 

[Woody]

Here is the boat depreciation curve that I use as part of the analysis. I've developed this over time using data points observed both personally and from others. It is far from perfect. This is how I came to add "must be at least ten years old" to my list of criteria when searching for my latest vessel.

The bottom line is that buying a boat is an act of "consumption" and not an "investment". That doesn't mean one should not try to minimize their losses, but the fact is that a boat is a depreciating asset and that depreciation expense needs to be factored in to decision making.

View attachment 41032

Interesting...10yo was also in my criteria for the same reason.

 

[Z-Worthy]

I am a huge advocate of the 1995-1999 450DA for a lot of reasons. I own one so I know them very well. Right now there are 3 CSR members looking for 450's, one has surveyed 2 and has just started the process on the 3rd. Another has looked at 4 boats and hasn't found one he wants to make an offer on. The mechanicals are usually good, but the cleanliness and overall condition is lacking. These boats are offered for sale between $89K and $170K. The demand is there, but finding a nice boat that will survey gets more difficult as the boats age.

I agree with Frank here. And remember, during the '97-'99 run, the 400 was basically a miniaturized 450. We found that it was easier to find a nicely maintained diesel-powered 400 in the Great Lakes than it was to find a 450 (not to mention the earlier 450s can look very "dated" if they weren't updated inside). If those additional 5ft (and seemingly 1200sq ft of cabin space) are important to you, search far and wide for a 450. If you really just want the second head but don't need all the space, then take a real close look at the 400. We love ours!

 

[SeaNile]

More variables as the size of the boat increases. I've had my fair share of toys, from the 6 Porsches, 1 Ferrari and 4 boats in the past 5 (or is it 6 years?) and the key is in the purchase. You can minimize the depreciation on the front end of the deal but don't go into this thinking you'll make money on the boat. As the size and price go up usually the demand goes down. With this in mind you can typically do very well when purchasing the boat. I've been pretty fortunate and actually have made a few thousand when I've sold the cars and boats.

 

[Converse48]

Of course, right on cue my 13 year old boat (10 when I bought it) popped a turbo today which will set me back a chunk. Bottom line is boats cost a lot of money.

 

[Blueone]

Ya but not as much as if you bought a 5 year old boat.... because you bought at 10yrs that turbo is basically free.

 

[stupe]

Another option, if you have the stomach and the balls for it, is buy a repo. A few years ago I bought an 07 Doral (with 200 hours on it) for $60K from a bank. I had to sink $20K into it to bring it back to perfect. I hired a surveyor for the boat and a surveyor for the engines so I knew what I was getting into. At the time it booked for about $130K. I could probably sell it for what I got into it today. Or just face the fact that boats are a money pit and stop thinking about it.

 

[Gofirstclass]

I agree. If you can do your homework and get quality surveys done, buying a repo can be a great deal. Mine was a repo when I bought it (refer back to post #9).