How many times have we heard over the last 18 months that “this is the best time ever” to buy a boat? It may very well be true. And the reason is the simple economics of supply (a ton of it) and demand (not so much). Even as we see signs of improvement, the economy has taken its toll, and the result is lots of boats for sale and not that many hungry buyers.
The days of your local dealer being the only option are long gone. Today’s buyer not only has to determine what to buy, why to buy and when to buy, but also where to buy. Dealer? Broker? eBay? Usedboats.com? Never has the inventory been so broad. The question today is, where can you find the best deal? We looked for answers from the experiences of four recent buyers.
Jim Anderson’s story is simple: He purchased a second home on Long Island. It came with a boat slip, and he wanted to fill it, preferably with a 20-foot center console or walkaround. Anderson quickly realized that the price of a new boat was more than he cared to spend. So he did what an ever-increasing number of consumers are doing — he turned to eBay, Craigslist and a few local boat traders. There, online, he found numerous promising candidates, but ultimately the experience left him cold.
One seller claimed the first $16,000 would take his 2003 20-foot Boston Whaler Dauntless. When Anderson offered the asking price pending a test of the engine, the buyer claimed he had another offer and upped the ante to $18,000. Later, Anderson saw the boat advertised to the first person to offer $19,000. Says Anderson: “I sent him a very strongly worded e-mail questioning the ethics of his pricing strategy.”
Other boats being offered online simply did not live up to what the listing promised. “For the most part, there was always something wrong with the boat that was not in the advertisement,” Anderson says. “Some looked beautiful in the photos and description, but when you actually got there, they showed more signs of wear and tear.”
Most owners were honest about problems once Anderson pointed them out, but they didn’t offer them unprompted. “They didn’t try to hide anything, but they didn’t go out of their way to mention anything until you noticed it.”
Mark Menachem, eBay and Craigslist specialist for Marine Max Miami, states the obvious: There’s no guarantee with private online sales. Horror stories include listings of everything from stolen boats, to boats about to be repossessed, to total neglect. “A lot of the boats for sale are through a private party that hasn’t been able to afford to maintain it for the past year,” Menachem cautions. He’s also seen boats with undisclosed storm damage or altered hour meters. “Boats are misrepresented very often by individuals.”
In contrast, a dealer will often commission a survey, send a boat through the service department for review, even offer a warranty (some states require a 60-day mechanical warranty, but structural issues are still up to the buyer to find, dealer or not). Weighing these pros and cons ultimately pushed Anderson away from the private market. “At the end of the day, I decided I really didn’t want to buy a boat out of somebody’s backyard,” he says. So Anderson moved on.
Steal of a Deal
While the online route didn’t pan out for Anderson, others found that the ailing economy — and a private owner’s desire to get out of a boat yesterday — could literally produce a deal they could not refuse.
Martin Kullman of St. Petersburg, Florida, knew what he wanted — a 33-foot Sea Ray Amberjack. Kullman was in no rush to buy. Still, he kept a watchful eye on eBay and Boat Trader online, just in case the right deal came along. One day it did — a 1997 model that was $20,000 less than what he’d come to expect. “You’re just kind of looking with something in mind, and thinking you can’t really afford it,” he recalls. “Then all of a sudden you get to a number you can.”
Kullman knew that if the deal was legit, he had to act quickly. He jumped in the car (along with a friend who owns a similar model) and drove four hours to the owner’s residence. The first impression was promising. There were no signs of excess wear in the gelcoat, bottom paint, vinyl or cabinetry. The boat’s hearty diesels also started and idled without a hitch. Kullman next verified engine and serial numbers, registration and ownership. A conversation with the mechanics that recently rebuilt the Amberjack’s motors and Kullman’s own reputable surveyor sealed the deal.
“When you see a price difference of that much, you think there’s got to be something wrong with it,” says Kullman, who ultimately bought the boat for $60,000. “Turns out there wasn’t. The seller just had to get out of it.
“I think the key to online stuff is you’ve got to know what you’re buying. The sale was contingent upon a positive survey, so that left it for me to make a final determination.”
Remember our friend Jim Anderson? He never found that deal he couldn’t refuse privately, but he did find a 2003 23-foot Pro-Line walkaround at a local dealership. unlike what discouraged him in the private market, this boat’s condition was excellent. The 225 hp Mercury OptiMax had nine months remaining on its warranty, and the dealer offered to cover the boat with a 60-day warranty against mechanical failure as well (not much good if the boat’s laid up for two more months of winter). Already listed at a decent price of $24,500, Anderson offered $21,000 based on risk and his used-market research. The dealer countered, and the parties settled at $21,750.
“I had some leverage,” Anderson says. “You could see over time the boat was coming down by $500, then $1,000. The market had its own price elasticity to it. Perhaps I should have been more aggressive, but I really felt I got a fair deal.
Pete Werner likewise turned to a dealer for his purchase, in his case a 2010 Malibu VLX. Werner, of Orlando, Florida, upgrades his boat every year, so he’s built a good relationship with his dealer. Still, he acknowledges the deal was even better due to the current economy.
“I’m kind of a research hound,” Werner says. “I look at Boat Trader and eBay, look at what old boats are going for on resale. I read the magazines, go to the boat shows. My dealer has always taken good care of me, but he bends a little farther now.”
How far? Werner’s not comfortable saying, but his dealer, Liquid Sports Marine’s Mark Watts, is. Watts says a manufacturer’s suggested retail price is typically about 35 to 38 percent above invoice. Back in the day, getting a good deal meant paying around 22 percent above invoice. Today? He’s letting boats, especially leftover models, go for as little as 8 to 10 percent over invoice.
“It’s a good 15 percent below what we would have previously wanted, just to get them off the lot,” Watts says. “Dealers have been paying interest on [2008 and 2009 models] and were getting rid of them at any cost. But that inventory is dwindling down quickly.”
Even the used market is affected.
“We do a lot of used and consigned business,” Watts says, “and the attitude of the consumer is that, if we’ve got a boat online for $39,000, the first thing they offer is $29,000. nobody offered $10,000 below price before, but buyers are of this mentality that we’ve got to get rid of our boats. In the summer of 2009 that was true, but we’re turning the corner.”
Still a Buyer’s Market
Both the buyer’s and dealer’s perspectives are familiar to Mike Klimek. Klimek has bought — and sold — two boats within the last 12 months.
The happy owner of a 1996 Sea Ray 250 Sundancer, Klimek resisted when his wife suggested they hit a 2009 boat show. But there the couple took enough of a liking to a Regal 3360 Window express Cruiser that they put in an offer — albeit a halfhearted one.
“They had this boat priced at $205,000, discounted from $229,000,” Klimek recalls. “We made a ridiculously lowball offer of $155,000 … and they took it. We were shocked.”
Within six months, however, Klimek had another shock. He had long admired a friend’s 2005 Riviera 370 Convertible and was surprised to hear it was being offered through a broker. Soon the Klimeks’ barely used Regal was also up for sale, through the same broker who was listing the Riviera. And Klimek found himself on the receiving end of lowball offers.
“As the seller of a boat, you have to be willing to slash your price,” he says of the current market. “We lost $30,000 on a boat that we had for six months.”
In the long run, however, he doesn’t view it as a loss. Why? That same buyer/seller reality also worked in his favor. Klimek had seen similar Rivieras listed online as high as $450,000. An almost identical boat was listed within 120 miles of his St. Petersburg Beach, Florida, home for $329,000. Klimek, with help from united Yacht Services (a broker), was ultimately able to close his deal for $290,000.
“The savings on a new purchase can make up the difference of what you lose,” says Klimek. “In a different market, that boat would have easily been $75,000 to $125,000 more than I was able to get it for.”
So which buyer got the best deal … and where? It’s a subjective question. each is satisfied with his purchase, and each for different reasons.
Anderson recognizes there may have been cheaper deals in the eBay and Craigslist world, but he wasn’t willing to take the chance on lower quality and having no recourse in the event of a problem. Kullman trusted his instincts about a quality buy and a motivated private seller and ended up getting what he considers a steal. So, ultimately, did Klimek. In fact, every buyer got the boat he wanted for far less than he expected … and each continues to be happy with the deal.
Their collective advice: Go forth and negotiate. And as you do, keep in mind these parting words from dealer Mark Watts: “The smoking deals are still out there … but we’re definitely in the fourth quarter of the game.”