How To Spot a Lo$er

Buying a boat—with selling it in mind.

There's no need to be ashamed of buying a boat with an eye toward selling it. Inevitably, you'll want to trade up, trade down, or drop out. (Actually, shame on you for the latter.) But it's hard to look at your vessel as an investment. As soon as you crack the champagne and watch your new boat slide into the drink, you've lost money. We asked the experts how to minimize the value your boat loses.

Brand Identity. The number one factor to consider is the brand name. But buying the right brand isn't as simple as it sounds. The consensus: Pick a brand that's popular in your area. But Dave Dugan of the North Atlantic Marine Group in Virginia sees it differently: "If a model is popular, excessive availability of used boats could put downward pressure on the sale price." He recommends seeking a limited production manufacturer with an outstanding reputation for quality. The perfect answer is probably somewhere in between. Buy as good a brand as you can afford and enjoy the hell out of it while it's yours.

Keep It Clean. They say cleanliness is next to godliness…well, a clean boat is, too. A documented engine service record is worth its weight in fiberglass. Copies of yard bills for simple stuff like bottom cleaning, changing zincs, and hull waxing help, too. Be meticulous with the interior upholstery, carpeting, galley, and head fixtures. A dirty or poorly maintained boat could chop thousands off your sale price.

Watch the Warranties. New boat warranties can last 5 to 10 years for manufacturing flaws, and some companies provide limited lifetime warranties. Engine manufacturers offer the ability to buy extended coverage. The same goes for high-end electronics. File all your warranties, and purchase extended ones where it makes sense. Note which are transferable. A warranty that can be passed along is worth a lot to a new owner.

What's the Deal? Ever see a great deal on a "brand-new leftover"? If it's the end of the season and a popular model, perhaps the dealer's projection was a little too aggressive. If the boat is over a season old, according to John Ulanowski of Scituate Yacht in Scituate, Massachusetts, "you'd better ask some hard questions of the dealer and others who know more than you. If it seems too good to be true, it probably is." You may save when you buy, but the only way to get rid of the boat may be to run it on the rocks-a tactic not appreciated by insurance companies.

Cash or Credit? With interest rates so low, there's no reason to pay for your new boat in full. "Put down as little as possible to create payments that you can handle and put the rest of your money to work earning as much or more than the interest on the loan" is Ulanowski's feeling. Also, if you meet the requirements (it has a galley and a head) your boat may qualify as a second home and some or all of the interest may be tax-deductible. This helps you offset some of your depreciation through earnings and tax savings.

Fashion Sense. Be wary of "fashion-driven" models. They're like Hula-Hoops and Pet Rocks-when they're in, they're in. When they're out, you're left out in the rain holding the dockline.

Check the Books. If you're buying the latest version of a model that's been around for a few years, compare the original cost of earlier years' against the one-year, three-year, and current values in the NADA guide, also known as the boater's blue book. The value trends are indicative of your potential downside.