Are dealers doing PX's artificially proping up the New Market?

[Nautorius]

Are dealers doing PX\'s artificially proping up the New Market?

In recent years I have noted more and more dealers offering PX on their new boats (with the exception of Peters last year!).

As new sales continue to thrive, and the secondhand market slows, I wonder if by offering PX's the new sales are being propped up. Afterall, how many people in a bouyant second hand market would PX for a new boat. Most would sell and then buy a nearly new boat. But some boats are not selling, so people are buying new at top whack prices and trading their boats on. These boats are then punted on at the expense of the general secondhand market which suffers further depression.

Last week I had a call from two seperate dealers who at SIBS said they did not do PX (but took Marina Cays details just in case) to say they would now do a PX. Presumably they missed their target at SIBS.

Iknow some people will always buy new, but a lot would prefer to keep in the second hand market!

Just look at Essex, record New boat sales (32 Boats) followed by well priced PX's arriving in Essex and being sold on fast. As Peters found out...if you do not offer PX, you do not sell as many boats.

Even new dealers with new brands were offering PX's! That would never have been the case 5 years ago.

Cheers

Paul /forums/images/graemlins/smile.gif

 

[Whitelighter]

Re: Are dealers doing PX\'s artificially proping up the New Market?

I am not so sure. Clearly the used boat will only ever be sold at market value, so any dealer who over pays when he takes it in PX will take a hit when he sells it on (for its actual value).

If people are getting more for their PX than it is worth, i am assuming they are not getting a discount on the new boat that would otherwise be available. This sort of thing has been going on in the motor trade for years and it is no suprise the marine market has cought up as boats become more accesible for the average man.

As well as the price you get, there is also the hassle factor. if you are looking at £160k on a new 35ft wotnot super express hardtop, then the hassle of keeping the boat clean, showing people around, the uncertainty of it actually selling it before the delivery of you new boat might all be just too much hassle. After all, you will loose 10% of its final vlaue to the broker, 5-10% in negotiation plus three months (or more) of having that money tied up doing nothing suddenly the dealer offing you 75% of its market value which can immediatly go against your new toy (because, lets be honest, this is now what you want) would look pretty attrctive.

Are dealers heling the new boat market by offering trade in? Absolutley. is it anything new? Not really, the big brands have been doing it for years and the smaller brands have just caught up.

 

[gjgm]

Re: Are dealers doing PX\'s artificially proping up the New Market?

I wonder how competent they are are the cashflow costs.

 

[PowerYachtBlog]

Re: Are dealers doing PX\'s artificially proping up the New Market?

the problem in UK and not only is for over inflated used boat prices
here are the problems IMO
1) a slow new boat market usually pulls the p/ex deals up as more dealers are willing to get rid of there new boats stock
2) the price for new boats, which in the last 10 years has double if not more for most of the famous brands especially from 10 to about 20 mtrs
3) second hand used boat prices now looks to be full of expensive used boats and very little bargains around
4) a market slowdown usually starts with the flow of used boats and then continues in the new boats....
5) I heard some pretty good deals and huge discounts which happened in the shows for new boats especially cash buyers
during September even discounts of 30%
6) here in the med we have a problem with finance leasing schemes with VAT reduced rates which really is pushing new builds to records after records and has slowed down used sales to a record minimum
7) the problem for the expensive used boat prices IMO is more of dealers who inflate the prices of the boats inorder to keep the owners happy of the brand

 

[Sundays_Child]

Re: Are dealers doing PX\'s artificially proping up the New Market?

"i am assuming they are not getting a discount on the new boat that would otherwise be available."

I disagree. Not saying there are a lot of boat buyers that are fools, but rather that there are a good number that won't squeeze avery last penny for a sale (unseemly etc).

When the dealers' smoke is blown away and their mirrors crack, there is a lot more being "ta-da'd" from their end. A lot. I've been in under the radar liquidations that gave the customers profit, should they have the contacts to sell on, even after a year. Not on boats I must add, but widgets are very quickly houses.

 

[Deleted User YDKXO]

Re: Are dealers doing PX\'s artificially proping up the New Market?

The answer is of course p/x's are driving the new boat market (I would'nt say propping up). For many peeps the hassle and uncertainty of selling their existing boat before taking delivery of their new boat is too much grief. And why not? We live in a 'I want it now' culture and buying boats is no different
I don't see anything wrong with this practice from the dealer point of view either. Taking a p/x means that the buyer probably pays top dollar for his new boat and the dealer can make a few quid on reselling the p/x boat as well so the level of profit on the whole deal can be a lot more than a discounted cash purchase. Any dealer offering unrealistically high p/x values will soon go out of business so the market is naturally self regulating
Where this practice may have an effect is in the used market. Obviously the effect of a large number of p/x boats coming onto the used market may depress used boat values

 

[ari]

Re: Are dealers doing PX\'s artificially proping up the New Market?

Nothing new here, years ago Sealine were openly offering "your money back" on your new S23 if you traded up to a bigger Sealine.

Of course you paid full list for the new one...

No one really thought they were then disposing of the used S23's at new price did they?

Thing is, people love to think they're boating for free don't they?

 

[Nautorius]

Re: Are dealers doing PX\'s artificially proping up the New Market?

Jez,

Great interpretation of the situation. I like the 'dealer' slant as well!

Cheers

Paul /forums/images/graemlins/cool.gif