Judders
Well-Known Member
Having looked at boat prices for about three years now, depreciation seems to vary greatly from model to model, manufacturer to manufacturer. What are others experiences?
Depreciation
- Thread starter Judders
- Start date
Sailfree
Well-Known Member
If you go for an AWB that can be bought off the shelf allow 10% per year up to 25% over 3 yrs.
If its an HR or one with a 12 - 18months waiting list it retains its original price obeying the laws of supply & demand.
If say you were buying a £100k boat and delivery was in say 10 weeks how much would it take to tempt you to buy a 1yrs old one secondhand?
I see silly comments about AWB's devaluing compared to "quality" boats but I really think its finally about supply and demand. The quality makes NEED to have a 12-18months waiting list to inflate their 2nd hand prices to give the added rational of retained value when in economic terms you are losing the use of an equal amount of money (for equivalent boat length) as quality boats are roughly 2x the cost of AWB's.
If its an HR or one with a 12 - 18months waiting list it retains its original price obeying the laws of supply & demand.
If say you were buying a £100k boat and delivery was in say 10 weeks how much would it take to tempt you to buy a 1yrs old one secondhand?
I see silly comments about AWB's devaluing compared to "quality" boats but I really think its finally about supply and demand. The quality makes NEED to have a 12-18months waiting list to inflate their 2nd hand prices to give the added rational of retained value when in economic terms you are losing the use of an equal amount of money (for equivalent boat length) as quality boats are roughly 2x the cost of AWB's.
FullCircle
Well-Known Member
Depreciation, what depreciation? /forums/images/graemlins/grin.gif
photodog
Lord High Commander of Upper Broughton and Gunthor
Buy a older boat, then the prices have largley stabilised.
If you buy new I think you can write off the VAT right away,
Prices on the used market have dropped recently, however I think thats a market thing versus a boat thing.
We are on our third boat, first was 11years old, and she made more when we sold her than we bought her for, the second was new, and we lost about 15 percent in 2 years,
Our current boat was bought 2 seasons ago, and she is a 1999,
She is down about 10% on when we bought her, but the whole market is down!
Get something evergreen (Sadler, Warrior, Rival) and you cant go wrong, then its more condition.
If you buy new I think you can write off the VAT right away,
Prices on the used market have dropped recently, however I think thats a market thing versus a boat thing.
We are on our third boat, first was 11years old, and she made more when we sold her than we bought her for, the second was new, and we lost about 15 percent in 2 years,
Our current boat was bought 2 seasons ago, and she is a 1999,
She is down about 10% on when we bought her, but the whole market is down!
Get something evergreen (Sadler, Warrior, Rival) and you cant go wrong, then its more condition.
Judders
Well-Known Member
My thinking is thus: it seems that there are certain boats which, inflation aside, do not seem to lose their value. Ergo, if one was to borrow the value to purchase such a vessel then, if necessary, one could sell it if one needed to cover the debt. Hitherto, I have approached the subject rather like cars where the depreciation far outstrips what you can afford to pay of in a year. Hence one could go for a larger vessel on the same payments but with a longer period, reasonably confident that when the time comes when, for what ever reason (kids etc) one can not afford the payments anymore, one could sell the vessel to pay off the loan.
photodog
Lord High Commander of Upper Broughton and Gunthor
/forums/images/graemlins/laugh.gif
Thats why you can mortgage a boat! Most of the time you can repay the mortgage with the equity,,, but heres the rub..
A boat is a hole in the water in which you pore money!
The cost of the boat is actually only about 40% of the overall costs, I spend more on mooring and maintanence, as I am sure everyone else does.
Whilst the equity will probably pay off the mortgage, dont forget that the market itself may also drop, and if you cant afford to lose the lot you shouldnt get involved!
Thats why you can mortgage a boat! Most of the time you can repay the mortgage with the equity,,, but heres the rub..
A boat is a hole in the water in which you pore money!
The cost of the boat is actually only about 40% of the overall costs, I spend more on mooring and maintanence, as I am sure everyone else does.
Whilst the equity will probably pay off the mortgage, dont forget that the market itself may also drop, and if you cant afford to lose the lot you shouldnt get involved!
Resolution
Well-Known Member
Different forces are at work on the newish, AWB, end of the market as compared to older (10 years plus?) boats.
At the new end, manufacturers provide a supply of new boats the prices of which heavily influence the 2/h market. For the past decade or so the volume manufacturers in Europe have been making boats at steadily DEcreasing real prices (manufacturing efficiency etc) which together with a firm pound has meant falling new boat costs over here. Inevitably this has pushed resale prices of these types of boats down.
This trend could easily unwind if sterling took a downward slide against the Euro.
Amongst older boats the comparison with new boats is much less relevant and my personal view is that the condition of the yacht becomes vastly more relevant than its age.
One other key point in trying to value a used yacht is to view with caution the ASKING prices listed on brokers' websites. Many yachts sit on these lists for ages, unsold and over priced. Work if you can only on actual achieved selling prices.
At the new end, manufacturers provide a supply of new boats the prices of which heavily influence the 2/h market. For the past decade or so the volume manufacturers in Europe have been making boats at steadily DEcreasing real prices (manufacturing efficiency etc) which together with a firm pound has meant falling new boat costs over here. Inevitably this has pushed resale prices of these types of boats down.
This trend could easily unwind if sterling took a downward slide against the Euro.
Amongst older boats the comparison with new boats is much less relevant and my personal view is that the condition of the yacht becomes vastly more relevant than its age.
One other key point in trying to value a used yacht is to view with caution the ASKING prices listed on brokers' websites. Many yachts sit on these lists for ages, unsold and over priced. Work if you can only on actual achieved selling prices.
photodog
Lord High Commander of Upper Broughton and Gunthor
Sorry, just realised my reply may have come across as a bit flippant,
10 years ago we had 40feet, then when the maintanence became too much, we got 34ft, then when I couldnt afford the mortgage,, we took a year to sell her and now we have 31 feet.
My advice is not too think too much about depreciation, etc, but to look at the bottom line, and then too balance the risks. If you have to sell, it can take a LONG time, and the broker will take 4-7 percent and then their will be a load of stuff for you too pay for that the surveyor will throw up.
My feeling is not too buy something that is a risk, you have to know that you can afford it even if things go pear shaped!
And their are a lot of really great boats out their that are affordable, Smaller is better, less is more!
/forums/images/graemlins/smile.gif
10 years ago we had 40feet, then when the maintanence became too much, we got 34ft, then when I couldnt afford the mortgage,, we took a year to sell her and now we have 31 feet.
My advice is not too think too much about depreciation, etc, but to look at the bottom line, and then too balance the risks. If you have to sell, it can take a LONG time, and the broker will take 4-7 percent and then their will be a load of stuff for you too pay for that the surveyor will throw up.
My feeling is not too buy something that is a risk, you have to know that you can afford it even if things go pear shaped!
And their are a lot of really great boats out their that are affordable, Smaller is better, less is more!
/forums/images/graemlins/smile.gif
Koeketiene
Well-Known Member
Ask the bride to be about it - Lynn had a little "Never again a new boat" rant in Ostend.
I think the "loose the VAT in year one" is an urban myth that can be debunked when considering the following two points:
Everyone gets 3 to 10 percent off the list price of a new AWB which is probably overlooked when people compare resale of nearly new boats.
While a model remains in production the manufacturer will index link the official list price but the nearly new resale example was purchased using last years lower list price.
Everyone gets 3 to 10 percent off the list price of a new AWB which is probably overlooked when people compare resale of nearly new boats.
While a model remains in production the manufacturer will index link the official list price but the nearly new resale example was purchased using last years lower list price.
jb2006
Well-Known Member
Sold my first boat for about £3K more than I bought it for. Being basically honest /forums/images/graemlins/frown.gif I thought I'd just check and found that the gain was liable for capital gains tax (Oops now you all know - that's tax evasion then). Last boat was sold for £7k less than I paid for her (15% over 2 years) - does anyone know if I can claim a loss for CGT relief ? /forums/images/graemlins/confused.gif
Resolution
Well-Known Member
Diverting slightly from the depreciation discussion, but my amateur understanding is that yachts generally will be exempt from CGT. Read the HMRC note CG76900 "Chattels that are wasting assets are exempt from CGT except where Capital Allowances were or could have been claimed" and CG76909 "ocean going yachts with auxiliary engines should be regarded as machinery [and therefore a wasting asset]". Can any professionals confirm or deny this view?
Different presumably if your boat is used in the business of chartering, when capital allowances may come into play.
Different presumably if your boat is used in the business of chartering, when capital allowances may come into play.
andy_wilson
Well-Known Member
CGT
I take it you didn't invest more than £3k in 'pressies' for boat No.1 to mitigate the CGT bill?
You can only claim relief from CGT in the same year.
If you used the £3K capital gain to purchase another CGTable asset in the same year, you don't need to worry about it.
Meanwhile private boats don't attract CGT, just like cars don't offer any releif from it even though they bleed money.
I take it you didn't invest more than £3k in 'pressies' for boat No.1 to mitigate the CGT bill?
You can only claim relief from CGT in the same year.
If you used the £3K capital gain to purchase another CGTable asset in the same year, you don't need to worry about it.
Meanwhile private boats don't attract CGT, just like cars don't offer any releif from it even though they bleed money.
jb2006
Well-Known Member
Re: CGT
I thought that boats were chattels and not CGT able - until I checked with the tax office and was told CGT applies. Don't know about the relief aspect though - as I read it most reliefs can be used for up to 3 years on CGT (as you say depreciation of cars does not attract relief - increase of value of collectors cars DOES attract CGT though) - are boats the same?
I thought that boats were chattels and not CGT able - until I checked with the tax office and was told CGT applies. Don't know about the relief aspect though - as I read it most reliefs can be used for up to 3 years on CGT (as you say depreciation of cars does not attract relief - increase of value of collectors cars DOES attract CGT though) - are boats the same?