Does Red Diesel Issue = Rapid Diesel Vessel Depreciation

[Gludy]

I agree with your points about displacment boats.

The red issue was one factor in me getting out of planing boats and in my case into a semi-displacement boat.... a sort of half way house that is still much more efficient at diplsacemant speeds.

 

[Callisto]

You make a very good point there. It is one I have also made on several threads. When it is possible to buy a KAD32 for about 10K (and it is if you know where to look!) drop it into a 24ft petrol mobo that you have bought for 8K less than the equivalent diesel boat with a tired , used motor, it all starts to stack up. You have paid not much more for the boat than you would have paid for the diesel boat in the first place but you have a brand new motor too with hopefully a good few years reliable life.

The point about petrol reliability is a strange one. Why should a petrol on a boat be less reliable than one in a car and we don't worry about them. A well maintained and serviced petrol should be no less reliable than a diesel. Agreed a petrol has electrics to look after too and this is generally the weakest link so pay a bit more attention to them and you will have no trouble.

Alternatively, if you don't plan lots of long distance cruising, buy the petrol, put the 8K in your pocket as fuel money for the next few years and just go out and have fun.

Petrol is no more dangerous and a diesel boat fitted with a LPG cylinder....both will go bang big time if you do something silly or fail to take the right precautions.

There are a load of petrol mobo's in the US and they are the norm not the exception....they can't all be wrong!

Has to be your decision but whatever it is, enjoy it.

Good luck

JH /forums/images/graemlins/smile.gif

 

[Cobra8]

Well that’s it then, news on the radio today On ‘RED Diesel’ say that the new EU taxation laws are to go ahead which could see RED Diesel triple in price by next year.

All that remains now is to see the industry go in to a decline and wait for Diesel vessel’s to drop in price sometime between now and next year and a probable collapse of the boating leisure industry all together, sorry guy’s a bit doom and gloom, I’ll try and see the sunny side later.
Sounds like even with the extra cruising distance you get with Diesel that it will be cancelled out anyway as it will be more expensive than Petrol and as for the reliability factor associated with diesel engines; surely that’s all down to preventative maintenance anyway whether it’s Petrol or Diesel.
This just leaves only one reason to buy a Diesel and that is because it’s easier to find outlets than it is for Petrol, although this only seems to apply to certain areas such as the West Country UK or France and places like that.

Shame the South Coast Blood Sucking Marina’s who like to squeeze every penny they can out of us, couldn’t come up with some sort of fuel subsidy idea for annual residents, instead they over charge on fuel as well, I expect they will charge for using the toilets next.

Something I just don’t understand at the moment,, why don’t the South coast Marina’s get any bad press over there blatant over charging on everything, is it just me that thinks annual 4k to 5k for a 28 ft vessel is a little high. I suppose if us mugs are going to pay it then they will charge it.

Well, that’s my whinge for today. Life’s a bitch and then you go sailing.

 

[Marsupial]

Hi Phil

IMHO you would be better off if you delay your purchase until the derogation of diesel was in operation. I suspect your hypothesis that, the price of traditionally “affordable” Powerboats will be greatly hit, will be true, of course the high end of the market will be unaffected – charge anything you like for fuel those owners will pay it. The future may see a shift towards semi displacement and displacement hulls which are more fuel efficient (affordable), leading to an even greater depreciation of the current designs. But these market developments will take a few years to kick in –IF they happen at all.

I think of the boat market (in this context) it in terms of the betamax video system, “it may be good but no-one wants one”, I fear that in a few years the types of boat you describe will fit this model.

Have a look at the BMF website, the industry is certainly bracing itself for a huge drop in demand – which of course will translate to lower prices.

Cheers


David

 

[Gludy]

That was talking a lot of sense.

I have already switched over to an SD hull because at least that offers me comfortable cruising at lower speeds. I can choose to go there at 25knots and pay a lot - or choose to do it at 10 knots and pay three times less than I do now. I think there will be a move towards SD and D hulls as well as some mopving towards sail - however, many may be stuck with a big loss on their hands.

"charge anything you like for fuel those owners will pay it. "

Only some are like that by no means all - I know very wealthy people who will not pay it if derg happaens, plan to move their boats overseas.

It easier for larger boat owners to sell in the Med market place than it is for the smaller boats.

 

[Cobra8]

Hi Dave

Whether I wait for the derogation of red diesel or not all fuels,, Petrol, Diesel and even LPG are on a rapid increase, not helped much by the greedy marina’s over charging which can be seen looking at other threads.
I also notice that some marina’s offer 10% discount when buying over 500ltr’s which again is not much use to the smaller vessels which generally don’t hold a tank that size.
This fuels your idea that the higher end of the market won’t be that bothered especially as a large percentage probably have it registered as a company asset and the running costs down as corporate entertainment.

Whichever way you look at it, a mobo is an expensive toy and the irregular sales prices I've seen makes me feel that if I make a purchase that I’ll be stuck with it. In the 4 month’s I’ve been looking nearly all the same mobo’s are still for sale.

With that in mind, I’ve decided that I just can’t wait around for a couple years while the market settles, so the MOBO is on hold for now while I look at some semi displacement and displacement vessels.
I’ve also booked a 2 week sailing course in October to see how I get on.
I’m not saying the SD/D market is any more stable but at least I don’t have that feeling I’m throwing 10k in the ocean.

Phil

 

[adrianm]

I sold my last boat in six weeks, took two years to sell the house......

 

[Cobra8]

That’s not really much of a statement without any details..

 

[adrianm]

I was merely trying to point out that people keep saying how hard it is to sell boats because of the red diesel issue andf I don't think it is.

I know of a couple who have recently bought a large sports cruiser with twin MAN engines that does over 40 knots. They are not the slightest bit concerned over the red diesel issue and I doubt they're alone.

Don't forget we've been through all of this before and I didn't see any problems then with selling boats, the brokers I bought my boat from then were doing a roaring trade.

Personally I think the whole red diesel issue has been totally mis-handled. It should have been tackled on the basis of the taxation of white diesel and how unfair that is. After all we have the cheapest white diesel in the EU until tax is added.....

 

[Gludy]

I could not disagree more - the chances of the boating lobby having any say whatsoever on wihite diesel is zero .. the only way the government will back down on white is to hold back a tiny bit after a massive wide spread public protest - one is about to happen.

The trade is generally reporting sluggish trade and the question of dereg on diesel is a factor in that. You cannot calim that a price rise of 2 or three times would have no effect on the market ... it would have a major effect.

 

[Medskipper]

Lets face it if the government get their own way over diesel prices, All vessels will fall in prices! the reason of course is simple, there will be a huge amount of vessels for sale. Market forces dictate that prices must then fall! Too many sellers and not enough buyers = Lower prices!

Barry

 

[adrianm]

Let's see what the Southampton boat show figures show.

If people were really concerned about it why are Barclays reporting record levels of marine mortgages? Nearly all of which are for motorboats.

At least the white diesel tax issue would make sense to Joe public. Cheap red diesel for massive gin palaces is totally indefensable to them.

 

[Whitelighter]

BTW, if Red diesel is retained - and i hope it is, why should mariners pay full duty for petrol? Same basis as Red diesel for pleasureboaters surely.

No doubt the arguement will be that diesel is used by the industry, by fishermen, by ferries etc and petrol is only used by MoBoers with plastic US boats.

If that is the arguement, then you begin to see why Red diesl may go - the Government hate the thought that us 'Rich' boaters are avoiding tax.

Remeber - build the country, tax the middle class!

 

[Bradders]

Greetings all

I`m new to boating and was looking at buying a second hand motor cruiser , I`ve been following this thread with interest for a while now. I recently contacted a broker with regard to the red diesel issue, as I need all the help and advice I can get, this was the reply

" The red diesel issue will not come into effect until Jan 2007 - so I am told. If the price goes up to the price for the rest of Europe and then boat prices come down, you will probably find that the French, Spanish etc will come and buy their boats here instead! "

Has anyone any thoughts as to how much percentage wise the deprciation would be on a mobo ? if any.
Any other buying tips or advice would be very much appreciated

Cheers

 

[adrianm]

Point is that it won't go up to the price of the rest of Europe, it will go much higher.

After all we pay more for our petrol and white diesel than most of Europe so why should red be any different?

 

[Bradders]

Thats a good point ! so if you were in my position would you wait untill the outcome of the red diesel is known before you went ahead and bought , or would you buy now ? I know its a personal opinion but you are the ones that know about this subject and know about boats and their value, I will provide a person e-mail address if need be.

Cheers /forums/images/graemlins/confused.gif

Not sure if I like these little faces though, thought I`d give em a try

 

[GC1]

I believe the big swing will be in the supply and demand issue, in Holland people who have their boats have bought them understanding the costs, what we have here now is people who have boats that they 'thought' they could afford that are now going to become too expensive to run. Now if these all start going on the market the price will drop, not good for anyone but it will happen, panic selling, just look at the panic at the pumps a few days ago. People who can't afford diesel at petrol prices and more the way things are going MUST get out now before it is too late, they can always com back in if it doesn't happen which is unlikely, but if you could be about to lose 40k or so I know what I would do.

I don't wish hardship on anyone and we all have a laugh now and again but this is serious get your head out of the sand time!

 

[GC1]

There will always be people who can afford to go boating, but the 'right people' that can afford it. Present diesel boaters have been the cats with the cream for years and made hay while the sun shines, they have saved thousands the honeymoon is now over, no surprise it has been talked about for years on this forum. What you do have is people who are not in the right boat for their financial circumstances, e.g. they could not afford to run it at petrol and above prices, the people looking to buy their boat knowing that would be higher income earners, so it will be the same people buying new but their budget will have to take into account the cost of running it.

e.g. Average £1,000 per month budget to boat with (excludes depreciation)

Old : Finance £600, Marina £200, Maintenance £50, Fuel £150

New : Finance £300, Marina £200, Maintenance £50, Fuel £450

You do not need to be a brain surgeon to see that you will get less boat for your budget /forums/images/graemlins/confused.gif The money MUST come from somewhere!

 

[AdeOlly]

Fuel costs won't triple from today's prices.

Current duty on red is 5.22p per litre.
Current duty on white is 47.1p per litre.
Difference is 41.88p per litre.
To this VAT is added ( /forums/images/graemlins/frown.gif )making a total of 49.21p per litre increase.

In my part of the world I'm paying 55p per litre, so all other things being equal the price will roughly double not triple.

Only if oil prices fell right back, which seems highly unlikely, would the cost triple as the amount of duty increase is unrelated to the fuel price.

Interestingly Biodiesel is taxed at 27.1p per litre. Anybody out there that can produce it for the same cost as conventional diesel??

I'd also question that if an individual can afford £1000 per month for boating they couldn't afford £1150, IMHO.

 

[Andrew_Fanner]

But if the individual can afford £100 per month for boating then £250 looks unattractive.

As some folk still don't spot, its those on the margins of affordability (a sizeable number IMO) who will be screwed.