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TallRedRider

Let's talk new boat depreciation

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TallRedRider

I am currently in a boat partnership, so the boat sees a lot of use. I have a 2015 boat that we purchased in March of this year and we are rolling at 120 hours right now. I live in the desert southwest, so I am likely going to be over 150 before she goes to sleep for the winter. If weather cooperates, then she will even get out a few days during the winter.

I am considering an upgrade to the 2016 just because I can. I am curious on what the crew's thoughts are about how the boat will be perceived after 1 vs. 2 years. I am still baffled by the number of low hour boats that are out there...people just don't use their boats. Joe public often commented when I was selling my last boat that 430 hours was a lot for a 2006 boat! And to some extent they were right, because there were many similar aged boats with less hours. Most of the educated folks on here understand that a reasonably maintained boat at 500 hours is really nothing to be concerned about. But unfortunately, most buyers don't consult the crew daily.

So what is going to hurt more? A 1 year old boat with 150 hours, or a 2 year old boat with potentially 300 hours?

Frankly, I think I would lose just as much in year 2 as year 1 with that many hours. I might just make the upgrade now.

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teamerickson

Tough to say. I would think you'd lose more in the first year and it eases off a little in the second. But you should be able to sell it for more now to go towards a new one. Prices are only going up and you never know If the economy is going to tank. Which would make selling your boat tough.

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Pnwrider

How do you like the boat partnership?

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nyryan2001

Tall, it really depends on the boat.

The highest demand boats depreciate less. Not all boats are created equal, or are in the highest demand. There are 10-20 variables to answer this.

Colors, options and location have a lot to do with it. How well the boat is maintained and kept has a LOT to do with it. Does it look showroom new? How well of a deal did you get when you bought it?

In 2010 I saw gorgeous Xstar sell for 85k with 300+ hours on it, arguably the highest demand boat in the industry at the time. Selling for 5k less than what he bought it for after 300hrs in only 9 months. Boat looked brand new, sold in 2 weeks.

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EchelonMike

Condition rules the day in my opinion. A beat up boat with 150 hrs, vs a flawless boat with 600 hours and good maintenance history, I would buy the 600 hr boat. But that is just me. You can put thousands of hours on these drivetrains as long as you maintain them properly. Hours don't really matter that much.

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TallRedRider

How do you like the boat partnership?

It has been very good for me. I have a partner that matches my personality. He just wants a boat that is awesome, and he doesn't overuse it. He detests all of the ancillary stuff that goes with owning a boat. I arranged insurance, did the stereo upgrades, bought whatever extras we need, take it to the dealership for maintenance, and he just shows up to use it and eagerly pays half the bills without any complaint. If the boat were mine only, I would have to do all that stuff anyway, so for me it is a win/win. We often ride together anyway, so it made pretty good sense.

I think that with newer boats, they are almost all in great condition aren't they? Even a neglected 1 year old boat can look brand new if you put a good detail person on it for 5 hours. I would think that for the boats I am referring to, they are all going to look new, aren't they? At least I think mine will easily look new with a little elbow grease.

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shawndoggy

My thought is that your market has a lot to do with it. St. George is off the beaten path and isn't the same as being in Dallas or Atlanta or Minneapolis for resale purposes. You are going to have many fewer drive by tire kickers. Hard even for someone doing a national search to fly in for the day (even though you really can fly nonstop to/from anywhere from LV)

So, while I think Ryan definitely knows his stuff on G23 resale, I think that being pretty far from a national market (even though you aren't really far at all from L.A.... LA isn't a huge boat market considering population). Really given cultural and geographic limitations, I'd suspect you are pretty tied (limited) to the LV and SLC markets? That's where I'd look for precedent, I think. Are 2 year old 300 hour boats trading at a substantial discount to 1 year 150 hour boats? I suspect not, but would be interested to hear about real data.

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Fman

Time of year is also key, you are coming into a stagnant time of year with fall coming soon. At least for a large portion of the country. Most won't buy a boat now at full price to have it sit all winter, those buyers are looking for a great can't pass up deal. Most of the boat flippers list there boats now for a good price to move them. They also purchase at a good price to be able to sell low. There are two key factors I have noticed when selling, color choice and stereo systems. All the rest seems irrelevant, typical buyers don't even ask about engine size. Engine hours also have not seemed to play a factor like I would have thought. This has been my experience with my last three boat sales in 7 years. My 2011 had 256 hours, which was max hours I have ever sold a boat with.

Surprisingly, I sold my last boat in October to a New Zealand buyer, there summer starts soon. Make sure and advertise over there (along with Australia). My dealer said when a boats hits 350-400 hours is when people start to get gunshy or hesitant because of hours.

I have to agree with Shawn, not sure you would see a significant hit keeping another season with 300 hours, probably minimal. A lot of this depends if new boat prices continue to rise, this helps minimize depreciation of older boats. All indications are new boat prices will continue to rise with low interest rates and long term financing.

Edited by Fman

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IXFE

Flipping a one-year old boat is all about giving your buyer "like new" while saving thousands over "actually new."

So yes, as mentioned your boat has to appear showroom new. No water sports, no dings, no scratches, no curb rash, perfect vinyl, sparkling trailer, etc. And you really have two sets of comps you have to pay attention to... 1) What does a brand new one cost (i.e. '16 G23)? You need to be A LOT less. 2) What are other '15 G23's going for (i.e. leftover inventory or other flippers)? You need to be less than the leftovers and competitive with the flippers.

I don't know any of those numbers for a G23. But here's what I do know... the more expensive the boat, the harder it is to flip w/out taking a bath. Most guys who can afford a G23 are the type of people who are less sensitive to paying a little more to just get a new one the way they want it. Or maybe paying the same and getting a 23 LSV the way they want. Case in point... my dealer sells Nautique and they've had a nice '13 G23 sitting on the lot all summer at $99K. Mind you, this has been their biggest year of boat sales EVER. And yet that G23 has been sitting there while they've sold tons of new 6-figure boats. I'm kind of surprised it's still there.

That said... you are close to Las Vegas, Salt Lake City, and Phoenix. All of these cities are BIG boat cities. So maybe you'll catch the right buyer.

Fman is spot on about timing. With every passing day your chances of selling a boat in the Fall dwindle. You really should have listed in 3 weeks ago. At this point you might as well just sit tight and wait until January. That's when all the Boat Shows begin and people will be back in the mood. Not only that, but folks often go to the show and get sticker shock. Then they come home and start searching for... you guessed it, "like new" boats that cost $20k less than what they just saw at the show. I've sold 5 boats in the past 5 years... only ONE of them sold in September. The other FOUR all sold in February.

Good luck!!

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nyryan2001

Need thtrog to chime in... He is the Jedi Master of the wake boat flip.

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Indyxc

A couple pretty good tips out there.

I'm on my third boat in 5 years now, so I can comment on a couple things.

As far as hours, it seems psychologically anything over 400 hours is harder to sell, and 500 hours seems to be equivalent to 100,000 miles in a car. Buyers are harder to find in that range.

Condition also makes a huge difference as noted. I keep my boats in immaculate condition. Even if people won't take care of the boat like you did, everyone wants a new looking boat, for a non new price.

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TenTwentyOne

I am on my 8th Boat in 7 years. I average 130-150 hours on each of them. Condition is obviously a biggie. The other biggest variable, is the deal you got when you purchased the boat. I couldn't flip them yearly if I wasn't regularly paying less than the average. As we all know, the price of a new boat could easily be $10k different, from one customer to another. It is just the way it works. If you are at the low end of the scale, it is easier to flip every year. The other key, is to- 1) Put in the effort to sell it yourself. 2) Don't be in a hurry to sell it. 3)Put a lot of effort into detail on your classified ad.

Go in with the mindset of- I don't need this new boat. If it works out, great, if not, oh well. Be ready to walk away from a deal that's not "great". And don't feel that you can't wait for the right buyer.

While I would typically agree with nyryan that demand/colors/options etc.. are important, I have not found that to be the case (for me). No matter the Brand/Model/Options/Colors, I have always found an audience. Heck, I even moved one of those POS XStars, fully loaded, and fully flaked. 140 hours of use cost me less than 5K on that boat. While the internet warriors might love to trash the XStar, they are less than 5% of the market. It's not hard to get the attention of the other 95%, take them for a Demo, and have them fall in love. Like it or not, the XStar is one heck of a boat.

Nyryan is certainly correct with saying these things help, but in my experience, I have not found them to be nearly as important as condition, or value. That said, I would stay away from polarizing color schemes. You can go crazy on color, but use a color scheme that most people would like.

In 7 years, and 8 boats, I have lost about 20k to depreciation, and probably about the same on the increase in boat prices. With all things considered, I think I did pretty well. .... I went SAN210, 23LSV, X25, X25, XStar, X30, X23, and currently running a G21 Demo while I wait for the new boat to come in later this month.

Edited by TenTwentyOne

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saidainc

Our Malibu dealership sells Nautique and the dealer said that ALL of the G23s and G25s sell out every year for nearly full price since 2010. There are a handful of Malibus left after each year

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Fman

Need thtrog to chime in... He is the Jedi Master of the wake boat flip.

No kidding, seems like they all sell within a week of listing them. He also chooses great color schemes with totally custom stereo installs. Every boat that he puts together looks fantastic. If I would have been in market for an lsv I would have been all over his 2015 lsv, that thing was sick.

Edited by Fman

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wakebrdr94

Our Malibu dealership sells Nautique and the dealer said that ALL of the G23s and G25s sell out every year for nearly full price since 2010. There are a handful of Malibus left after each year

Easy to do when you only sell 3 of each. :) at least here in our market

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saidainc

Easy to do when you only sell 3 of each. :) at least here in our market

True but you are talking boats that fly out the door at $150K all day. Most of the customers also upgrade to the triple axle trailer so Im sure that adds more cost.

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wakebrdr94

I don't know if I would call selling 6 a year "flying off the shelf" as opposed to selling 50, or whatever numbers your dealer does

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wakeboarder3780

I have no idea what would pay off more in the long run. I would think a lot of people would raise an eyebrow to 300 hours in 2 years. I'd be wondering if it was a wakeboard school boat and had lots of foot traffic / knuckle draggers stomping throughout the boat. I'm on the crew and even I get a little antsy about it. If the numbers seemed close, my vote is trade up yearly.

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TallRedRider

I have no idea what would pay off more in the long run. I would think a lot of people would raise an eyebrow to 300 hours in 2 years. I'd be wondering if it was a wakeboard school boat and had lots of foot traffic / knuckle draggers stomping throughout the boat. I'm on the crew and even I get a little antsy about it. If the numbers seemed close, my vote is trade up yearly.

That is kind of my thinking. I think I may lose as much in year 2 as in year 1, but not everyone agrees, as noted above.

Funny that you called them knuckledraggers...

EvolutionFoil2%202_zpsisv4pykx.jpg

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saidainc

I don't know if I would call selling 6 a year "flying off the shelf" as opposed to selling 50, or whatever numbers your dealer does

what Malibu dealer is selling 50 boats out of their store per year??

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IXFE

what Malibu dealer is selling 50 boats out of their store per year??

Plenty...

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saidainc

Plenty...

Name one that is not located in SoCal that also doesnt include Axis brands....

There were roughly 7000 inboard boats sold new in the US in 2014. Lets assume, for the sake of argument, that half the contiguous US States are selling at least 50 boats at 2 dealerships per state and the rest are selling half that or 25 boats per 2 dealerships per state per year

Are you honestly saying that Malibu is selling nearly 40% of that 7000 boat figure?

Edited by saidainc

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IXFE

Name one that is not located in SoCal that also doesnt include Axis brands....

There were roughly 7000 inboard boats sold new in the US in 2014. Lets assume, for the sake of argument, that half the contiguous US States are selling at least 50 boats at 2 dealerships per state and the rest are selling half that or 25 boats per 2 dealerships per state per year

Are you honestly saying that Malibu is selling nearly 40% of that 7000 boat figure?

Where did I say anything about 40% of anything? All I said was there are multiple Bu dealers selling 50+ boats (which is what you asked).

I really try to stick to facts, not assumptions. Malibu + Axis is 33% market share. And there are quite a few dealers selling 50+. There are some real whales out there. There are also others selling single digits.

What are we arguing about anyway? I already forgot. This is silly.

mss2_zps8bi8mrry.jpg

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saidainc

Where did I say anything about 40% of anything? All I said was there are multiple Bu dealers selling 50+ boats (which is what you asked).

I really try to stick to facts, not assumptions. Malibu + Axis is 33% market share. And there are quite a few dealers selling 50+. There are some real whales out there. There are also others selling single digits.

What are we arguing about anyway? I already forgot. This is silly.

mss2_zps8bi8mrry.jpg

IDK but it is keeping me mildly entertained

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Sixer

Pretty sure my local dealership sells over 100 per year............and we can only boat half the year here. But I also think they're #1 in the US, and #2 in the world.

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