Otter
Well-Known Member
Buying a new £100,000 yacht has all the financial security of taking a £50 punt on a Kickstarter product.
Bavaria in administration?
- Thread starter bitbaltic
- Start date
maby
Well-Known Member
That also works. Boat purchase really is ridiculous these days - a moderately nice boat can easily cost as much as a house in many parts of the UK - but you buy it with a similar level of protection as a microwave oven.
Blue Sunray
Well-Known Member
Tranona
Well-Known Member
pvb is correct. The contract is (usually) with the dealer, not the factory, so the risk is with the dealer going bust. Bavaria require a 20% deposit from the dealer which the buyer pays on confirmation of the build date. In my case this was 6 weeks before the build, so the risk was for a short period of time. The final payment was when the boat was complete and ready for shipment. In my case I had a part exchange which represented over 40% of the total and cash for the balance. The final payment and handing over title to my old boat was done when the builder's certificate and BofS from Bavaria to the dealer arrived. I received the certificate, a BoS from the dealer to me and a VAT invoice in exchange for the final cash payment.
So the only risk points were the initial deposit and the commissioning which were included in the final cash payment but obviously not carried out until after the boat was shipped.
Much less risk than the furniture I bought from Dreams recently where I had to pay the whole amount upfront with a 6 week delivery.
So, although there is risk attached to buying new boats it is not hugely different in nature from buying other high value consumer items that are not existing stock.
So the only risk points were the initial deposit and the commissioning which were included in the final cash payment but obviously not carried out until after the boat was shipped.
Much less risk than the furniture I bought from Dreams recently where I had to pay the whole amount upfront with a 6 week delivery.
So, although there is risk attached to buying new boats it is not hugely different in nature from buying other high value consumer items that are not existing stock.
pvb
Well-Known Member
No, you lost, they're not a limited company.
pvb
Well-Known Member
I think it's much more risky. If you go to order a high value car, you'll typically be asked to pay a token deposit (Porsche ask for £3K, for example). Then nothing until the day you actually collect the car, by which time you've been able to inspect it, check its specification, etc.
Lucky Duck
Well-Known Member
plus the deposit would most likely have been made via credit card.
I suspect the same applies with most furniture suppliers
I suspect the same applies with most furniture suppliers
Tranona
Well-Known Member
That may be true for cars which are generally high volume and have a ready market if the buyer defaults, but there are many high value items such as building related works when it is common to pay at least a substantial part of the costs before the work is complete.
Payment terms vary in the boat building business depending on a whole host of factors and the dealer distribution model is not universal. In my view it is up to the individual buyer to assess the risks involved and the "rewards" and make their own decision as to whether the balance is acceptable. There is always room for negotiation. As you see I retained title to my old boat and did not pay the final amount until the boat was built and the title documents were available. This was different from what was originally offered.
There is no totally risk free method of having a new boat built for you and if you don't want to take the risk there is often the alternative of buying a stock boat, although of course you may not then get exactly what you want.
dom
Well-Known Member
Although the buyer doesn't necessarily have to fund those stage payments. I for example purchased a boat where builder demanded similar terms during a big recession. Agreed with the dealer that we would both fund 10% of the initial 20% and the builder agreed to hold off the final payment until final handover. I did however deposit the entire amount up-front in an escrow account.
Also agree with pvb that doing unsecured business with companies struggling for cashflow is an amber light ...at least!
Tranona
Well-Known Member
I paid both the deposit and final payment on the boat by debit card, so covered by the Chargeback scheme.
Tranona
Well-Known Member
Discussed a similar arrangement about the deposit and the possibility of have a BofS for the deposit giving me some title. However as the boat only exists for about a week in the factory that is of dubious value.
Did, however successfully negotiate a sharing of the gain due to exchange rate movements and addition of some factory extras FOC which were worth a significant sum.
One has to consider the totality of the deal of which security of prepayments is just part.
Good thing is boat was delivered on time exactly as ordered and so far virtually trouble free.
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dom
Well-Known Member
Agreed, it's basically a credit/legal question. IMHO someone either unfamiliar with the ground, or in the least bit worried would be wise to engage a competent solicitor. Surprised so few do.
dunedin
Well-Known Member
Not sure that the debit card Chargeback scheme would give me much confidence for a six figure purchase.
And whilst the contracts may be with the dealer rather than Bavaria, the fact of Bavaria hitting public issues could easily knock buyer confidence and thereby push a dealer company into insolvency by impacting its cash flow (generic risk rather than any implied statement about any specific / real dealership)
Blue Sunray
Well-Known Member
Err, that's what I said?
Tranona
Well-Known Member
As I understand it the the chargeback scheme does not have a limit and will work in the case of insolvency. The big difference compared with Section 75 that covers credit cards is that the card issuer has the right to call back the funds if the claim turns out not to be justified. I have no direct experience of going through the process, but it would appear to some degree of protection.
As to your second point that may well be an outcome, but perhaps in a longer term. It seems that in the current situation there is little risk for boats due for build in the next couple of months, but for buyers with a build date after that some action to protect themselves would be required.
pvb
Well-Known Member
No, you said "Bet you fiver they are now NewCompany Ltd..." They're not now a limited company.
JumbleDuck
Well-Known Member
I said that. Can't yet tell whether I was right or not.
pvb
Well-Known Member
Sorry, so you did! Also sorry to say you're not right; the cowboys are now operating I imagine as a sole trader type outfit, with no limited company status.
maby
Well-Known Member
I don't agree with that - you can make it risk free if you are prepared to pay the premium. Simply tell the dealer and/or builder to borrow the money from a bank themselves and agree to pay the cost of the money along with the cost of the boat on delivery. We have had dealers agree to that - and on reasonably high value purchases. If they cannot get any bank to agree at any price, then that is a pretty sure indicator that they can't be trusted with your money either.
Frogmogman
Well-Known Member
Sounds risky for the builder, assuming that their lender agrees to the deal. If the buyer backs out, they're left holding a boat to that buyer's spec.
To make it a fair deal the buyer would need to block the funds in an escrow account against the delivery of the boat.
