Chris Edmonston: It's a great day to be out in the water. Hi! I'm Chris Edmonston, President of the BoatUS foundation. If you're thinking about buying a boat, you might wonder just as you would if you're buying a house whether to buy a new boat or a used boat. Well, here are some things to consider.
Personal finances are often key factor in the decision to buy a new or used boat, however other factors beyond the cost of the boat should also be considered. There are almost always additional expenses beyond the price of the boat and loan interest. There is often one time fees such as sales tax or recurring fees like storage, personal property taxes, slip rental maintenance and insurance. The age, use, hull material and quality of construction all affect annual expenses.
In fact the yearly cost of operating, maintaining and repairing equipment on your boat can average 10% or more of your boat's value. Something else to look at is after sales service. The retail cost of a new boat often includes the cost of providing warranty service. When a used boat is sold as is where is, the only thing that's guaranteed is that buyer will pay to fix any problems that crop up.
If you're thinking about buying a used boat, financing for older boats can often be more difficult. While it's sure that new and used boats are treated equally in terms of interest rates and down payments, you can expect some extra financing hurdles if you're buying a boat over 15 years old or one that requires a lot of repairs.
Boat shows are great places to find low prices, but show specials may be no bargain if the dealer doesn't maintain a service shop or is located hundreds of miles away when repairs are needed. You can also try getting a good deal on a new boat after the boat show season, but also look for good deals on new leftover models sitting unsold on dealer lots from previous years.
If you're thinking about who the best person to buy from is, when it comes to bargaining, keep in mind that although markup rates vary according to dealer volume, commissions on new boats are generally 10% to 20% over factory cost. After a market equipment installed by the dealer, it's marked up roughly 40% and labor about 25%. The going broker commission rate on used boats is 10%, so buying directly from an owner can help you reduce costs.
So if you found a boat you like, you're probably wondering what's a fair price, you have Buck Book and NADA price guides found at libraries or online, that will give you high and low retail prices for each model year. In addition, they get price adjustments for physical condition, engine options and even geographical location. But classified ads may be better indicators of boat prices in your area. You could monitor prices over a one or two month period to get an accurate picture.
Finally have your boat inspected before purchase. A marine surveyor will give evaluation as part of a written report.
Let's face it; a boat is a big purchase, but keeping these tips in mind will help you better understand the cost of buying a boat.