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jammer

Dealer's Motivations

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jammer

Can anyone educate me on whether a dealer is more incentivized to sell a like-new used 2015 or sell an order slot for a custom 2016? Are their margins typically wider on a used or new sale?

I am in the valley of decision on a nearly-new 2015 23 LSV (25 hours - immaculate condition - G4 tower + clamping racks - LSA 555!) or ordering a new 2016 23LSV -- but with less total options but a few specific ones I'm interested in (power seat, new vinyl, + 5 year warranty...)

Just curious how motivated my dealer will be to sell the used versus new boat. I appreciate any thoughts.

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Badger

The answer depends on who owns the used boat. IXFE's answer is correct if the dealer still owns the boat and has been using it as a demo all summer.

If the boat was purchased by someone else and ended back up at the dealer, there could be a couple of scenarios.

1. The dealer has the boat on consignment to sell for the owner while the new owner has already ordered new. The dealer has very little incentive to sell this. I think they'd want to steer you to another new boat. You really are negotiating with the owners of the boat, not the dealer.

2. Boat is on consignment but the owner hasn't ordered yet, until the boat is sold. I'd say it's 50/50 on incentive. Dealer is now more motivated, but not as much as if they own the boat as IXFE described above. You're still relying on the owners to be willing to negotiate, not the dealer.

3. Dealer has taken the boat on a trade and they own the boat. Dealer is probably not out any money yet, so I'd think their interest is in filling their build slots with a guaranteed purchase, so they don't get into the scenario that IXFE outlined above.

Overall, my experience is that dealers aren't as interested in taking ownership and selling used boats. If they do, they surely build a nice margin into the trade price, so it's never a losing proposition for themselves. Most of the time, boats will be on consignment and then the 10% or so they get, isn't going to be as valuable as selling you the new boat.

Edited by Badger

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MLA

A used boat may not be floored and it may not even be owned by the dealer, could be consigned. But, a 2015 with 25 hours could be never titled boat with dealer demo hours.

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JeffK

And some dealers buy their stock outright, meaning there is no interest at all, just money tied up. Basically, not all things are created equal. I'd just tell them you are really deal focused and ask them which one they are more motivated to move. Honesty and clear communication can go a long way to establishing a great relationship with your dealer.

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That Guy

In my experience I saw greater motivation to sell a new order than anything in inventory. YMMV

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gordon20mxz

The dealer's motivation is to make money. He will make money either way. It depends on the exact financial circimstances of the used boat, which you will never know. It also depends on the strength of his business and his cash flow, which you will never know.

If you buy the used boat (if not consignment) he gets all of the money right now. If you buy a new boat he gets a small deposit now and the rest when you pcik up the boat, and I am guessing you would wait to the Spring, many months away. If you buy the used boat and it is on consignment, he gets a cut and the other owner is probably waiting on the consigment sale to use the money to order a new boat. So the dealer really makes money on two sales.

Buy the boat you want, making the best deal you can either way. Only the dealer knows how good the deal is to him financially and that will be reflected in your negotiations with him when you really get serious about the purchase.

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bbattiste247

Good question...but he probably wants the cash now rather than later.

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jammer

While I do not know the actual disposition of the boat -- whether the boat is on consignment or is now owned by the dealer -- I do know that the original owner orders a new boat each year, and his boat was just delivered yesterday to the dealers lot. I suspect the boat is on consignment. Your responses have been helpful -- thanks! If it is on consignment, I worry that negotiation tactics with the dealer may fall flat -- it's hard not negotiating with the source. When it's all said and done, I just need to buy the best boat for me.

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Malibuzer

Which dealer? Links to the boats?

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gordon20mxz

While I do not know the actual disposition of the boat -- whether the boat is on consignment or is now owned by the dealer -- I do know that the original owner orders a new boat each year, and his boat was just delivered yesterday to the dealers lot. I suspect the boat is on consignment. Your responses have been helpful -- thanks! If it is on consignment, I worry that negotiation tactics with the dealer may fall flat -- it's hard not negotiating with the source. When it's all said and done, I just need to buy the best boat for me.

If the original owner gets a boat each year and his new boat just came in, then I would bet that the boat you are looking at has been traded in by the owner, to the dealer, towards the purchase of the new boat. Most boat owners don't want to be out of the money for two big boats simultaneously (the one you bought, and the one that you are waiting for the consignment sale on). That essentially means that the dealer has bought the boat and owns it.

The dealer probably gave a trade in value to the owner between 10% and 20% under "book value" and/or what he think he can sell it for.

So the dealer is going to make money either way. But the sale of the used boat will put a lot of money in his pocket right away.

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IXFE

Sorry guys... I misread the OP. I didn't see that he said "like new used." I just assumed we were talking about a new leftover '15 boat (more than likely financed by a flooring plan).

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IXFE

If the original owner gets a boat each year and his new boat just came in, then I would bet that the boat you are looking at has been traded in by the owner, to the dealer, towards the purchase of the new boat. Most boat owners don't want to be out of the money for two big boats simultaneously (the one you bought, and the one that you are waiting for the consignment sale on). That essentially means that the dealer has bought the boat and owns it.

The dealer probably gave a trade in value to the owner between 10% and 20% under "book value" and/or what he think he can sell it for.

So the dealer is going to make money either way. But the sale of the used boat will put a lot of money in his pocket right away.

Not so fast... just because the new boat has been delivered to the dealer's lot, does not mean that the owner has taken delivery or will anytime soon. He may be waiting until the old boat sells. The new boat can sit on the lot (or in the warehouse) for months before it costs the dealer anything.

If it's a consignment boat, the dealer was given a bottom line number by the owner. Then the dealer has added an undisclosed amount to cover negotiation and a small profit for themselves. Good luck finding out what those numbers are. :lol:

Finally, be sure you consider the fact that as a "used" boat you'll have to pay (twice) to have the Malibu and Indmar warranties transferred to you. I don't remember the amount, but it's something like $800 in total. I'm sure somebody here will chime in if I'm wrong.

All that said... I've sold my last two boats this way (one year old, through dealer consignment), and in both cases the new owners got a "better than new" boat and saved thousands in the process. So it's not a bad way to go.

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dlb

I ordered my boat in September and bought it in early April. My old boat was traded in at the time of the order. My dealer said that this was sweet all around. He filled a winter build slot. Took delivery the week I picked it up and in the spring sold my old boat. He had no money in either transaction until my boat was delivered and was paid within the week. Because of this I also got a great deal.

Like others have said each situation is different, just find what works for you.

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gordon20mxz

IXFE, You are correct, just because the new boat is on the lot, does not mean that the owner paid for it and took delivery now. Jammer, who started the thread did not say what state he lived in, I was wrongly assuming it was a warm weather state and they still had boating time left. Maybe not.

And I agree with you, buying a "very slightly" used boat with low hours can be a very good deal for someone, it can save a lot of money. Every purchasing situation, used versus new, is unique.

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ConnollyCrew

Finally, be sure you consider the fact that as a "used" boat you'll have to pay (twice) to have the Malibu and Indmar warranties transferred to you. I don't remember the amount, but it's something like $800 in total. I'm sure somebody here will chime in if I'm wrong.

I paid 700 last week

Edited by BamaLSV

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