Used Boat Prices Falling

[TenTwentyOne]

7 hours ago, IXFE said:

Never said the bank was giving free flooring. Just that the dealers aren’t paying it. That’s the only way Malibu can keep the factory humming all year long. Otherwise, what dealer would stock up on late summer and fall deliveries?

Now… how Malibu accounts for that is something neither of us are privy to. In your case it would seem you’re seeing two invoice prices. I’ve been around the block more than once with Bu and never heard of nothing like that. Who knows? Maybe they peanut butter it across all boat volume? Wouldn’t be the first time… 

All I know is… Malibu dealers see it as enough of an incentive to keep the orders flowing smoothly all year long. And they will sit on a boat I order for months so long as the juice isn’t running… 

We aren't shown 2 invoice costs. There is an invoice cost, which is the cost if you put it through floor plan as would normally happen..... However, if paying upon invoice (in our case, within 10 days of invoice date), there is a discount applied by the manufacturer, for the reduction in cost to them (due to them not kicking up to the floor plan finance company for "free floor plan".

Sure, this may vary depending on timing/manufacturer/rates/etc.

[dalt1]

What would you do? I have a new boat purchase in the works. Dealer is wanting to sell mine on Consignment. Says he can get 10% more for it in spring than our agreed upon cost right now. My fear is the used market taking a dump between now and then and it being worth 20% less than than it is now. It has been advertised for over a month now with no action hardly at all. I know it is slow at this time and figure after our Boat show Jan 6,7,8 and sticker shock sets in to lookers, things will start moving. Anyone else have any luck selling a boat in the last 2 months?

 

 

[mxmark4]

10 minutes ago, dalt1 said:

What would you do? I have a new boat purchase in the works. Dealer is wanting to sell mine on Consignment. Says he can get 10% more for it in spring than our agreed upon cost right now. My fear is the used market taking a dump between now and then and it being worth 20% less than than it is now. It has been advertised for over a month now with no action hardly at all. I know it is slow at this time and figure after our Boat show Jan 6,7,8 and sticker shock sets in to lookers, things will start moving. Anyone else have any luck selling a boat in the last 2 months?

Ask him to put it in writing that he can get 10% more and hold him to it. Or have him buy it outright at a price acceptable to you and let him assume the risk of getting more for it in the Spring. 

 

 

[RCorsa]

I think many dealers will move to Consignment only on used boats as it costs them nothing and it can bring in an interested buyer for your boat or if that person decided they don’t like your boat they now have a lead and can sell them something else.  Personally I would just try to sell it yourself.  Be aggressive with price and get rid of it ASAP especially if you have a new boat boat coming 

[oldjeep]

I wonder how much consignment would impact sales.  Here in MN when buying a new boat, the trade in is deducted off the sale price to determine the tax.  On a 6 figure boat with a 5-6 figure trade, that is a bunch of money.

[TallRedRider]

2 hours ago, RCorsa said:

I think many dealers will move to Consignment only on used boats as it costs them nothing and it can bring in an interested buyer for your boat or if that person decided they don’t like your boat they now have a lead and can sell them something else.  Personally I would just try to sell it yourself.  Be aggressive with price and get rid of it ASAP especially if you have a new boat boat coming 

I agree.  I typically am not all doomsdayish (or should I say Hulkish), but the fear of a recession alone is creating one all by itself.  I think things will only get worse.  My sister worked for Camping World who just laid off around 20% of their employees.   A lot of buyers are going to just sit at the sidelines and wait out the uncertainty.  

[braindamage]

59 minutes ago, TallRedRider said:

I agree.  I typically am not all doomsdayish (or should I say Hulkish), but the fear of a recession alone is creating one all by itself.  I think things will only get worse.  My sister worked for Camping World who just laid off around 20% of their employees.   A lot of buyers are going to just sit at the sidelines and wait out the uncertainty.  

And that’s how inflation turns into stagflation.

[Murphys]

4 hours ago, RCorsa said:

I think many dealers will move to Consignment only on used boats as it costs them nothing and it can bring in an interested buyer for your boat or if that person decided they don’t like your boat they now have a lead and can sell them something else.  Personally I would just try to sell it yourself.  Be aggressive with price and get rid of it ASAP especially if you have a new boat boat coming 

Not certain how it goes in the boat business, but my nephew who owns a used car lot stopped taking consignment vehicles. The reasons being sellers who wanted ridiculous prices for their vehicles and would not accept any reasonable offers from potential buyers,  and potential buyers taking much time to deal with and often walking away. He makes more money seeking out quality vehicles, paying cash for them, then flipping at auction or selling on the lot.

As far as the used boat market goes, it seems there is always someone willing to pay top dollar for a well maintained boat. If I were @dalt1I believe I would wait to sell in the spring, unless i couldn't swing the financial side of things until then.

[The Hulk]

IMO, I'd take any reasonable offer if you are expecting to use that $ towards the new purchase or if you need the $

Fed has said over and over they are going to kill demand, and continue on path of rising unemployment. Ughh 😭

Talked to a few mid level VPs/ COO's of a few companies ($50M-1.5b in size) over holiday most are expecting and taking immediate action estimating a minimum of 25-30+% sales reduction or more for 2023. .The big question was is that back to normal levels or worse. Some optimistic back to trend most think will be below trend. General consensus is obviously past few years were way above trend..  sadly they are planning or have been told to eliminate  20%+ staff before years end.. not all in tech.. yikes.. and obviously starting with the higher 6 figured plus folks first.. 

We have all seen the tech layoff massacre unfolding which are tons of folks in the 200-350k salary ranges on avg. As this transfers outside the tech industry to the general economy those are going to be upper income folks and start hitting boating households..   

Housing is all but done for with current rates, and there are a zillion products and industries that feed that sector. Scary in it's own realm. 

Black Friday record $.. well add YOY inflation and it's actually a Huge drop. Love how they twist the numbers to hide the damage.. at least here in IN the craziness was not crazy at all. I'm sure lots of folks shifted further to online purchases but still just A little bit eerie how low key it was compared to back in the day.. 

Used cars especially luxury are currently falling off the cliff. Dealers can't afford to pay for anything and are going underwater on many vehicles.. that liquidity ship only floats for so long. 

Is boating isolated?  We're sure to find out very soon. Personally I wouldn't want to buy new now without having already sold or knowing what a guaranteed trade in value would bring. Having used on hand would have been great the past few years for top dollar.. Currently you could not convince me it's anything but the Worse time to be selling a used boat no matter the condition.

Maybe other areas are different but lake homes/sales hit a brick wall here.. nothing is moving not even what would have been a steal.. those cash buyers everyone talks about IMO already purchased or are going to wait for a steal over next 2yrs like they did or learned they should of done in 08.. 

Sure there are still boat buyers but I have a feeling anyone smart enough to afford such toys also knows the tide has turned and they can probably afford to be paitent for a steal of a deal over the next year or two when folks need out.. vast majority of folks buying a NEW boat of any kind are only worried about the monthly payment.. especially basically every pandemic /new boating style buyers. 

I greatly worry we will follow the RV industry with a 6-12mo lag of some sort due to the backlogs finally clearing. 

 

 

 

Edited November 28, 2022 by The Hulk

[OtherBoatisaCessna]

You’re not wrong, Walter…

[NWBU]

2 hours ago, The Hulk said:

Sure there are still boat buyers but I have a feeling anyone smart enough to afford such toys also knows the tide has turned and they can probably afford to be paitent for a steal of a deal over the next year or two when folks need out.. vast majority of folks buying a NEW boat of any kind are only worried about the monthly payment.. especially basically every pandemic /new boating style buyers. 

Hulk - I don't know how the next 18 months play out and I suspect you may just be ahead of your time again, since I don't know how households making less than $100K can afford to drive, put food on their table and do much of anything else anymore. However, I expect the memories of the massive snap-backs from the 2008-2012 and March 2020 lows in various asset classes will bring in dip buyers more quickly than most of us who are hoping for another round of absolute steals would like. 

Talking to the Nautique and Malibu regional reps last week when they were in town at AWS, they're each seeing fall orders trending at around 2019 levels, give or take a bit. Interestingly, both said the % of cash buyers has actually increased significantly, as fewer buyers are planning to finance. And if you want a 2023 Paragon, better get your order in soon...

On the RV side, lots around here are full but I'm still waiting to see any great deals yet, on the nearly new side. The last couple of years have been great times to buy in the late fall, but hardly anything has come up this year that's interesting. 

[The Hulk]

5 hours ago, NWBU said:

Hulk - I don't know how the next 18 months play out and I suspect you may just be ahead of your time again, since I don't know how households making less than $100K can afford to drive, put food on their table and do much of anything else anymore. However, I expect the memories of the massive snap-backs from the 2008-2012 and March 2020 lows in various asset classes will bring in dip buyers more quickly than most of us who are hoping for another round of absolute steals would like. 

Talking to the Nautique and Malibu regional reps last week when they were in town at AWS, they're each seeing fall orders trending at around 2019 levels, give or take a bit. Interestingly, both said the % of cash buyers has actually increased significantly, as fewer buyers are planning to finance. And if you want a 2023 Paragon, better get your order in soon...

On the RV side, lots around here are full but I'm still waiting to see any great deals yet, on the nearly new side. The last couple of years have been great times to buy in the late fall, but hardly anything has come up this year that's interesting. 

The Paragon has amazed me since it started! This kind of customer is also obviously in a little different league financially. 

Yes will be interesting to see if we just go back to trend #s, or better, or worse. I'd be happy with that, and I think Many people would appreciate going back to the mean/Norm.  That's the Trillion $ question for the entire economy at the moment.

That a great point on buyers that will come in quicker for the deals.. no doubt! 

What has me MOST freigtened is the # of bankruptcy and closures happening in the world's factory over the past few months. (Unofficially of course).  20-25% of small companies are basically gone & bankrupt due to lack of orders, lockdowns, and such. Most all are down by 50-70%+ in 2022 yikes! 

They all say 2023 looking even worse. Apparently it's unimaginable how bad the economic situation has gotten. The bully whip affect in full force so I suspect we'll see it here soon.

 I'm was bit surprised all these places across the pond are having such a bad fiscal 2022 but on avg they run  ahead of the rest of the world by roughly 9-12 mo so that translates into our 2023 at some point 

Most companies here even if significantly slowing will end up with a solid 2022. Checking import data seems to confirm the above situations, they fell off the cliff.. 

2023 is the big question but I'll say it again look to the other side to know what's coming down the pipeline. While I can't predict a fast pivot to zero or trillions more in spending, or full blown war, the current indicators of what's headed our way doesn't look good.

IMO we could quickly change course for a soft landing if we opened The spigots immediately and did a soft Pivot of some sort.. it takes about 1yr for money and policy to flow through system, lagging indicators have done nothing but caused trouble the past few years..

Frankly I'm worried our industry is also using lagging indicators 

 

[Hemmy]

On 11/23/2022 at 2:27 PM, bcoppess23 said:

Can @RCorsa take each of us on a drive??  Congrats on being in your position to enjoy!

I am open for adoption.

[Brandonloos21]

On 11/25/2022 at 10:35 AM, RCorsa said:

I think many dealers will move to Consignment only on used boats as it costs them nothing and it can bring in an interested buyer for your boat or if that person decided they don’t like your boat they now have a lead and can sell them something else.  Personally I would just try to sell it yourself.  Be aggressive with price and get rid of it ASAP especially if you have a new boat boat coming 

Consignment is great because you can use tax credits.

We have done courtesy trade on our last 2 boats. Find buyer, agree on price, go to dealer with price and old boat, they sell boat at agreed price, take a % fee, and apply the rest as trade in towards new boat (this is all given you discuss fee and deal with dealership beforehand).

[Cole2001]

My Nautique dealer(Wizard) hasn't had this many used P's and G's since way before covid times. Meaning 2 things. 1 being new paragons are selling strong and the used market is slowing down a bit as In the past these boats wouldn't even hit the website. 

[The Hulk]

I suspect those used #s will continue to rise during the hard times ahead.

the question is how bad and long lasting the recession will be. .. guess that also depends how we rewrite the definition to fit the narrative. 

Gray area = recessions.. 

Jobs are lagging data we'll see what happens when that blue line goes below the black (probably already has) but won't reflect for a few months.

All indicators show fed has it all wrong, they will overcorrect. 

If there is any possible silver linings, one might consider the past several years have been swinging like a pendulum in (roughly) 1yr increments like below. Perhaps that gives us some insight? 

* Initial recession ie 2wks to slow the curve. turned into faaar longer. Closures , layoffs, we're all gonna die. Massive Order cancellations in china, nobody will have $ world is ending 

* 800 LB gorilla responded pumping the money press at light speed.  China economy booming with orders at this time. US not so much yet. Production/ PPI, raw materials and prices rising sharply. Assets surging. Huge producer cost increases, consumers not much yet. 

*China starts shipping all that stuff, bottlenecks, Supply chain Backloggs, ports ,truck congestions, massive cost increases of anything being transported, to many goods not enough capacity.. labor shortage, wage increases, massive inflation hits employers + consumers highest on record (if calculated correctly)

* 800 LB gorilla responds again, raises rates faster than ever and starts vacuuming up all that money, credit tightening, higher rates , stricter lending, assets take a hit. Higher energy prices, Kill all demand at all costs! China orders crashed overnight. US gets inventory hang over +30-40% overages. Price slashing on overages starting. FEDEX barometer falls off cliff, grounding planes. Trucking and port backlogs cleared and drying up. Amazon laying off during holiday surge 

 ***Now enter at least a year of mass layoffs, order cuts, cap X elimination, recession, closures,  (18 months and counting) of consumer wage decreases compared to inflation. Disposable income vanishes. Credit card debt all time high, over paid for used and new Vehicle loan defaults. MUCH POORER & BROKE CONSUMER. (The official recession) 

******TBD...Late 2023 - early 2024 Fed goes back to zero, but takes 2-3 yrs more to get back to normal? 

 

 

 

 

[justgary]

5 hours ago, The Hulk said:

800 LB gorilla responded pumping the money press at light speed.

This 800 pound gorilla you speak of is the US Congress.  All of the social programs, bailouts, and big government programs that never get smaller are the primary issue.  The Congress has not passed a real budget in a very long time.  They keep funding at the same relative rates every year through "continuing resolution" so they don't have to think or work. 

They still have not completed the FY23 budget, even though FY23 started two months ago.  Any corporate management that did that would get fired immediately.  I noticed that not very many of us fired our US Representative earlier this month.

 

5 hours ago, The Hulk said:

800 LB gorilla responds again, raises rates faster than ever and starts vacuuming up all that money, credit tightening, higher rates , stricter lending, assets take a hit.

This 800 pound gorilla you speak of is the US Federal Reserve, also known as the "Fed."  It is not affiliated with the US Congress except that it has a congressional mandate to: 1) manage inflation at 2%; and 2) control unemployment.  The Fed has no control over government spending.  It can only react to what has already happened, so it is by definition a lag control system, and as such will have overshoot.

I suppose that the Fed could have immediately raised rates as soon as Congress passed the trillions of dollars in extra spending a few years ago.  Inflation is the dilution of the value money by adding new money into the supply (which is done by Congress handing new money to the Fed).  Everyone would have whined about instant rate hikes, but it would have helped control the $3T money injection.

To make matters worse, the Congress passed an "inflation control act" that basically piles on *more* inflationary spending.  Half of the country thought that was a good idea....

As for China, their lockdowns for COVID have really thrown a wrench into the works.  Their 800 pound gorilla is a completely different beast, and does not have our best interest in mind at all.  The sad thing is that we created that beast by insisting on teaching them how to produce stuff for us at a quality level we can accept.  US companies still coach Chinese companies on production quality.

I think that the government should have reminded everybody why having ~6 months of expenses saved is a great idea.  Instead, they said, "bless your heart *" and started handing everybody a bunch of money.  It isn't too late to remind people, so I'll do it.  Everybody should have at least six months of expenses saved and available.  This does not include your retirement plan, which should be considered untouchable until you retire.

* "Bless your heart" is the southern curse.  It means, "you are such a hopeless idiot."

[The Hulk]

@justgary... Amen! 

[rockbottom]

Interesting thread.  But Janet Y. said inflation is transitory? LOL

[BlindSquirrel]

3 hours ago, justgary said:

Everybody should have at least six months of expenses saved and available. 

Gulp... The google machine reports that only ~26% of Americans have this. (the number varies +/- 4% or so by website) Worse yet, ~27% of Americans have zero savings. 

Who's doing it right? The people that live within their means, save for a rainy day, and have a decently consistent fun time. Or the people that live wildly outside their means and have awesome short times, until the loan folks come take their toys? Only for that person to do it again, with little consequence. 

What behavior are we teaching by "loan forgiveness"? I didn't have college debut, I played tennis on a scholarship and work study to make it through for free, but I would sure not be happy if I paid my debt back to find out they would have forgave it. Personal finance should be taught in school or at least the basics. If the kid's parents are not good with money... well that ole saying the apple doesn't fall far from the tree typically applies....

Edited November 30, 2022 by BlindSquirrel

[The Hulk]

1 hour ago, rockbottom said:

Interesting thread.  But Janet Y. said inflation is transitory? LOL

Well they clarified it's the rate of inflation being transitory... Not inflation.. prices will continue to rise but they hope to bring the speed at which they rise back down.. gotta love their game of words.. 

[shawndoggy]

1 hour ago, The Hulk said:

Well they clarified it's the rate of inflation being transitory... Not inflation.. prices will continue to rise but they hope to bring the speed at which they rise back down.. gotta love their game of words.. 

If the Fed's mandate is 2%, there's always inflation. 

If you understood "transitory" to mean that inflation would somehow go away to zero, you misunderstood.

Some inflation is necessary to stimulate the economy.  If you know something is going to cost more in six months, mightn't you buy it now to lock in your outlay?

Edited November 30, 2022 by shawndoggy

[The Hulk]

31 minutes ago, shawndoggy said:

If the Fed's mandate is 2%, there's always inflation. 

If you understood "transitory" to mean that inflation would somehow go away to zero, you misunderstood.

Some inflation is necessary to stimulate the economy.  If you know something is going to cost more in six months, mightn't you buy it now to lock in your outlay?

Agree they totally missled avg joe in this word play.

2% is the magic number.. sadly they change the basket of goods or the calculation to meet the objectives over the past decades. Reality is it's always higher than the official number, like technically our 8% is actually 16-20% by old metrics. 

I think most folks called this transitory bluff earlier on and thus why so much demand was brought/pulled Forward.. most everyone purchased something on the basis that at the time borrowing was free and actually you were getting paid a LOT to borrow with "real"  inflation and that item would definitely cost more in the near future.. 

IMO folks are being overly optimistic and kidding themselves thinking that demand just falls back to 2019 levels. If you go way above trend then it's likely you will go below trend before getting back on track.

Used boats IMO are going to pile up quickly at some point next year. Perhaps it's not the $200k boat/type folks, but maybe a lot 100k and less for sure 

 

 

Edited November 30, 2022 by The Hulk

[shawndoggy]

3 hours ago, BlindSquirrel said:

Personal finance should be taught in school or at least the basics. If the kid's parents are not good with money... well that ole saying the apple doesn't fall far from the tree typically applies....

There are so many resources out there right now to learn how to manage your $$$ and plan for the future.  But it doesn't mean that people will act prudently and rationally.  And to some degree all of that profligate spending runs our economy and drives up the value of the well disciplined saver's investments.  If everyone suddenly got financial discipline and started spending prudently our economy would grind to a halt. 

I still remember the first ads that came back on the TV a few weeks after 9/11... images of waving flags and patriotic music urging me to go to Sears and buy a fridge.

Haha as a Nevadan (where our tax base is very levered up on sales tax) I've lived through more boom-n-bust economic cycles that I can count.  Get a little skeered and peeps don't wanna find out what happens in Vegas, even if it does stay there.

[shawndoggy]

59 minutes ago, The Hulk said:

Used boats IMO are going to pile up quickly at some point next year. Perhaps it's not the $200k boat/type folks, but maybe a lot 100k and less for sure 

Bitcoin is already 75% off!