Depreciation

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The dreaded D-word.

We all complain about the price of mooring fees, fuel, insurance, etc. but a quick scan of the Essex boat yards site shows a couple of alarming numbers.

- A Fairline Targa 38 2010 = £299,950
- A Fairline Targa 38 2006 = £179,950

Similar spec, 300hp ish engines.

So let's assume some very rich and hitherto unknown benefactor allows me to buy the first boat, and I sell it in four years time on similar terms to the second, that will be £120,000 in four years lost in depreciation.

That's £30,000 per year :eek:

Is this a Fairline problem, or just typical of the way the market is at the moment?
 
Unlikely to fall as much as that. Don't know what a new one is currently - probably £315k and in 4 years time will be nearer £370k. Th older boat will fall a bit, and the nearly new to probably £250k. Still a lot of dosh in absolute terms and more in real terms of course. Not as bad as buying a top of the range Merc or Maserati for £80k and lose at least 60 of that in 4 years.
 
We were once told that a boat depreciates by c. 20% in its first year, including an initial hit of the VAT, and 5-10% pa thereafter, as a rule of thumb. There then comes a point when depreciation slows right down for a few years.
 
FlowerPower said:
Is this a Fairline problem, or just typical of the way the market is at the moment?
Click to expand...

No! Let's face it Essex are one of the best dealers around in terms of price etc. But buying a boat has never been an investment opportunity. Perhaps better to look at a % rather than cost then compare that with what you would see on a luxury car.

I know of marques that "D" even more - Fairline is one of the better makes for depreciation (i.e. lower) but you will also see a difference if you were trade in against the same maker as opposed to changing to another make.

Plus, it is a buyers market so frankly it has never really be a better time to buy a boat. Just a shame instructing does not pay enough to take advantage! Well, not to get the latest models anyway! I'd love to go and buy a nice new boat - but nobody would pay the price for it to be commercially viable. Well not enough anyway.
 
230k brand new 195k 6 mnths old. SC35...if you were looking to buy, which would you choose and why?
Lisa
 
I've collected lots of info and done lots of calculations, in an attempt to estimate what to offer - and what depreciation to expect in the family-boat segment around 30-35'

The result is that identical models and makes, from same year, vary up to 30% in asking price. Asking price is to be seen as a starting point for negotiation.

Condition varies a lot, and those with a wreck for sale opt for the highest prices just as those with the gems. Surveys are crucial.

On average boats in a "good for her age" condition with 7-15 years behind them drops 8-10% per year (calculated on each years residual value). Give and take something for extra wear or real improvements.

As an investment boats are no good and will cost good money to keep. The idea is to get invaluable joy, pleasure and a very meaningful pastime - all year round. If you buy wisely, spend to keep it mint and sell smart, you may be able beat the statistics and get close to zero D.
 
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lisilou said:
230k brand new 195k 6 mnths old. SC35...if you were looking to buy, which would you choose and why?
Lisa
Click to expand...

it would depend on who I am buying from, or through (and that included the new boat!), condition, use, extras/fittings etc etc etc

however, and possibly more relevant to your question, I would probably start from the premise that they are of equal value to me (because the 6 month old boat should have been snagged and sorted and have a few K of gear on-board)

there's also the issue of timing - which could count for the SH craft

then there's negotiation; which could count either way!
 
Looking at the depreciation of a nice boat today it makes more sense to me to charter one each year, 30K will get you a nice boat for a few weeks without the headaches of owning one. And you get to use different boats at different locations. Makes perfect sense to me.

So right now I am trying to sell our house so we can buy a nice big Dutch cruiser to live on and poodle around Europe with. Sense doesn't always prevail.:D
 
If you don't like massive depreciation, buy an older or smaller boat.

A decent sailing boat will have little or no depreciation - but you still have to pay out to keep it up to scratch. I've had my boat since the early 90's & it is still worth roughly what I paid for it, but I have spent almost as much as the purchase price on maintenance.

Much of the value of MoBo's seems to be in the engines - if they need replacement you are facing real big bucks.
 
lisilou said:
230k brand new 195k 6 mnths old. SC35...if you were looking to buy, which would you choose and why?
Lisa
Click to expand...

If the 6mth old boat had the "right" spec, I would choose that one.

If there were "must have" options that I really really wanted but were not available on stock boats or second hand boats (e.g. leopard skin with purple upholstery) and that were hard to retrofit, I would order a new one.
 
Spi D said:
I've collected lots of info and done lots of calculations, in an attempt to estimate what to offer - and what depreciation to expect in the family-boat segment around 30-35'

The result is that identical models and makes, from same year, vary up to 30% in asking price. Asking price is to be seen as a starting point for negotiation.
Click to expand...

Thats a very wise observation, although the range widens as boats get older because relatively new boats tend to be in good condition. It is when they get to the second and third owner that some start to deteriorate quicker than others, or get messed about in the name of improvement.
 
Dont think depreciation comes into it much. I've got all the bills since my boat was new.

For a few years it actually went up in price, then stabalised, but still more than new.

That was up to ten years ago and the price has been stable till a couple of years ago.

Prices now seem to be dropping like a stone.

I'm just looking for a reasonable asking price.
 
I'm not unhappy with S28 depreciation, maybe £20k or so over six years.

That, I can live with.

But, £30k per year ???
 
Just had a thought.....

It's worse than £30k a year, we are comparing two buying prices, the second one should be what the owner sold the boat for.
 
Depends what you consider as depreciation I suppose.

I was recently offered broadly what I paid for my boat, so arguably i'd have seen no depreciation during 4 yrs ownership. However, money is worth less now through inflation, and if i'd have stuck the money in the bank 4 years ago i'd have got maybe 12% after tax during that 4 yrs, so arguably it has depreciated 12%. If I sold it though, I'd want to buy a replacement, and to buy the equivalent boat of the same age (at time of purchase) i'd be looking at maybe 30% more because new boat prices have rocketed, so arguably it has depreciated 25%.

The last measure is most relevant to me, so I kept the boat
 
We bought our 2004 Sealine F37 in 2007 and sold it this year. In pounds we lost 9% in four years, which is not at all bad (if talking about euros, we lost a lot more of course, but that's a somewhat different story).

We've been searching for a new slightly bigger three cabin boat, but I've been amazed by the depreciation of some of the models we've looked at. I need to gather some statistics to get better understanding on this before jumping to conclusions.
 
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