Buying a Used Yacht
Wisdom in acquiring a used yacht as the second owner
Whether a first-time buyer or a seasoned yachtsman, the art of locating and buying a used yacht can be a truly enjoyable experience. Here are some tips to making a good decision:
I find that the best yachts (or boats, or cars, etc) are ones that are slightly used or exceptionally cared for. When I managed boats for television shows (such as Miami Vice), I found that the first year is spent troubleshooting glitches, or problems. Most of these were electrical in nature, some mechanical. Because boats and yachts are built of components that become increasingly complex with size, thus system, increase – it is hard to tell what will fail from one boat to the next. I found that most problems were solved within a year, after which each boat was fairly trouble-free as long as it was maintained and operated well. I actually pleaded for the manufacturer to leave the one-year old fleet of fast boats alone, as they were much better than when I put them into service. Thus - the value of warranty in new boat ownership.
Historically, yachts (especially production yachts) depreciate rapidly the first year. Often, if it is a bad sales year, the dealer will actually compete with used boat prices by discounting their inventory. The real gimmick for the dealer to keep the business of these one or two year old boat owners, is to inflate the trade-in price and get them into a new model (at full retail). It’s really just a shell game and most savvy buyers eventually come to grips with this form of business – then face the real market and take their lumps. Then they get smart and buy next time as the second owner.
Here’s another reason why – options don’t increase market price. A 2002 46 SeaRay is worth “x” amount of money on the market, whether it has a transom lift, or satellite TV, or new electronics. These options cost someone a lot of money up front, but only add value several years down the road. However, if you have to have a certain option, such as a lift, it is wiser to seek used yachts that already have these installed, as retro-fitting is expensive in some cases and often not able to be recaptured on resale. Of note – the electronics industry has morphed to “black box” technology – thus allowing upgrades to equipment over time rather than planned obsolescence – making wise electronics purchasing a viable investment in your yacht.
Thus, It is a win-win situation to buy a second hand boat – the first guy takes the biggest hit, you get lots of virtually free options (even if you don’t need some) and hopefully the bugs are worked out (with maybe some warranty left).
Yachts that are well-cared for are certainly more desirable than those which are not. And though you might congratulate yourself on the “killer” deal that you made on a repossessed boat with only one engine running – just wait until you start seeing all the other problems that show up as a result of neglect. In some ways, boats are like onions – you often don’t see the real boat until you peel away a few layers - and while some things work well at the dock, murphy’s law has a sinister way of coming into play when one is in difficult conditions. The “idiot light” is sure to blink on when your family holiday is ruined because of neglect problems.
Most buyers realize that a good broker is a true asset in finding the perfect yacht. Find one that is willing to help you find you the best boat at the best price. Stick with him (or her); as they will do the same and be an invaluable resource to help make those moments on the water the best ones of your life. Be reasonable and try to learn as much as you can – most brokers have a lifetime of experience to offer, and will surely agree that the best value is often a fresh used yacht or boat.
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