Buying a new boat?

D

Duffer

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If you pay up front (or earlier than required) you can get a better deal on your new boat. But how can you safeguard your payment if the dealer or manufacturer goes bust? If your boat hasn't been finished you may have to complete the task yourself or you may only be an unsecured creditor (as happened in the recent Farepack debacle) and be lucky to get any of your money back. A previous thread mentioned bonding - does anyone know how this works or have any other suggestions (other than paying on delivery)?
 
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use an escrow account

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In which case I wouldnt have thought he would get a discount.

With a UK builder (yes there are a small number) you can ensure that the contract passes ownership to you of everything as it is bought and the boats at all stages of construction. But given that receivers are usually appointed by the banks to recover the banks money, and since they know where their next commission is coming from, you will likely still have an argument to prove what ypou own and whay is available for other creditors.

With a foreign builder ( and from experience of trying to collect foreign debts) you are in a weak position and I dont know how you would protect yourself against (say ) Benny going bust. But given the much more nationalistic attitude to business in most other Euro countries, the banks have a lesser ability to shut down businesses so the event is less likely IMHO.

The only real answer is to pay when you take over ownership of the complete boat. I backed out of a deal with a UK builder because the balance sheet was poor IMO and the risk great. They insisted on stage payments.
 
Has anybody been able to get a boat manufacturer to provide a bank guarantee to secure your deposit and stage payments?

I use these all the time in the business to secure up-front payments to suppliers and contractors. If the vendor fails to deliver the goods the bank has to pay up the money they guaranteed. It does mean that the bank has to be reasonably sure that the vendor will deliver, so dodgy vendors can't provide a bank guarante, which is usually a useful alarm bell.

TonyD
 
It seems that paying ahead of time is not without its risks - caveat emptor (in the absence of some industry wide or insurance based scheme). I hope that as a result of Farepak, payments will be ring-fenced so that a parent (or affiliated) company cannot use payments from customers to finance some, risky unrelated business (such as futures trading in the Far East). If anyone has contacts at the DTI or with Mandy in Brussels then please notify.

Presumably banks charge either the builder or customer to guarantee payments - I've no idea how much, if they offer it at all. It was an American who suggested bonding so perhaps they have a different set up over there.

At one time Westerly kept going bust - did customers lose their money as a result?
 
Westerly bust- yes they owned whatever state the hull was in and had to pay finishing costs.

Most will give a discount providing its obvious you are serious and can quote serious alternative boats you are considering and making sure they understand cost is a factor.

Most only want 10% up front and a number put it in a seperate account but I would need written assurance that the money was untouched and available to give back in the event of bankrupcy of the distributor. Any loss would then be criminal - fraud rather than a civil action.

Most then want balance on leaving factory but I always refuse to pay for any extras still to be fitted.

DEpendant on where boat is made I would get local quotes and consider buying in that country but check up on their consumer law as UK is pretty good for the consumer.
 
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