New boat depreciation - approx %s?

[West Coast]

I can recall on a past thread that someone had helpfully given a rough guide of expected depreciation of a new boat, some higher percentage over the first few years, dropping to a smaller % in following years.

I have been searching for this thread - no luck! Would someone be able to remind me of this information?

 

[Tranona]

I can recall on a past thread that someone had helpfully given a rough guide of expected depreciation of a new boat, some higher percentage over the first few years, dropping to a smaller % in following years.

I have been searching for this thread - no luck! Would someone be able to remind me of this information?

It is all guesswork as it depends on the boat and market conditions at the time.

However, if we talk about middle of the road cruising boats, then expect a 20% or so drop in the first year - probably more if you ticked all the boxes on the extras list. This is a fall from the total price which includes transport, commissioning etc which is well over £10k and effectively dead money. My boat cost just over £100k with all the extras in 2015. A similar boat (same year, similar spec) is currently asking £80k so expect will go for around £75k.

In the past typical fall in value in real terms after the initial drop has been around 5% pa, but masked by inflation until about 10 years ago. You can expect to lose around 50-60% of the original cost in the first 10 years, but prices vary significantly at that age because of condition, changing tastes etc.

Not all boats follow this pattern. Many of the "quality" boats lose value more slowly for all sorts of reasons, mainly to do with short supply and demand from people who can't afford new prices.

Personally I think that long term depreciation will be slower in the future because of the much reduced volume of new boat sales (in the UK) which leads to a shortage of late model boats on the used market. It is instructive to do a search for mid range cruisers less than 5 years old compared with 10-15 years old - that is boats from the halcyon days of the early 2000's.

Unlike cars the boat market is very "thin" - that is there are not enough transactions (nor enough information about them, particularly price) to establish any reliable pattern of depreciation. More useful if you are considering buying a new boat to look at the total cost over the expected period of ownership. It then becomes clearer that the longer you keep the boat the more "economic" it becomes. Somewhere between 5-10 years the annual cost of repairs and replacements starts to overtake the annual loss in capital value. If it helps to understand the economics, charter operators look to replace boats after 5-6 years as the cost of maintenance starts to eat into the income, which may well be reducing as the boat gets older and less desirable.

 

[[70521]]

I can recall on a past thread that someone had helpfully given a rough guide of expected depreciation of a new boat, some higher percentage over the first few years, dropping to a smaller % in following years.

I have been searching for this thread - no luck! Would someone be able to remind me of this information?

Is the boat an asset in a company? If not then the depreciation rules do not apply, just what somebody will pay in the future.

There is a Southerly 135 that has been on the hard for over 12 months where I over winter my boat, the price has moved from £149,000 to £129,500 in that time. I might offer them my boat +£10,000 if it does not shift in the next 12 months.

Edit: I've just looked at it on the Internet, I think I'll just do a swap is it needs a lot of work to get it up to scratch.

 

[jakeroyd]

Just one boat I know.
2000 New £40k
2007 £24.5k
2017 £12k

 

[sailaboutvic]

We brought our in 2009 with extras I installed it stand me 110k, sold it this year for 72k that's a 38k lost
But we have had 7 years used 6 of them full time liveaboard and we did around 3000 miles a year .
The boat had new sails in 2014 and it was fully equit for full time liveabout , well looked after and nothing needed doing to it .
New owners very happy and now good friends .
Not sure if I would ever buy a new boat again .

 

[West Coast]

Thanks all, really helpful comments! Am looking at a 5 year old boat at the moment, and trying to get idea of value other than just broker price.

 

[West Coast]

Personally I think that long term depreciation will be slower in the future because of the much reduced volume of new boat sales (in the UK) which leads to a shortage of late model boats on the used market. It is instructive to do a search for mid range cruisers less than 5 years old compared with 10-15 years old - that is boats from the halcyon days of the early 2000's.

Interesting comment - my findings exactly

 

[[70521]]

Thanks all, really helpful comments! Am looking at a 5 year old boat at the moment, and trying to get idea of value other than just broker price.

Do some web searches go and look at a range of boats then see how the boat you are interested in compares. When looking for my first boat I viewed several within £2,000 of each other. Some were outstanding and others needed to go to the tip. Once you have researched the market make your offer.

 

[West Coast]

Do some web searches go and look at a range of boats then see how the boat you are interested in compares. When looking for my first boat I viewed several within £2,000 of each other. Some were outstanding and others needed to go to the tip. Once you have researched the market make your offer.

Been an ongoing process over past 3 months. Gone through the older vs newer bit, weighing up the upgrade costs against buying newer. View is for boat for the next 10 years at least, and came to conclusion that 5 year old boat was best for my circumstances. As Tranona pointed out, not so many of these available compared to 15 years old. Viewed a number of boats, this one ticks most boxes and is a good example. So suspect offer pending

 

[lpdsn]

Been an ongoing process over past 3 months. Gone through the older vs newer bit, weighing up the upgrade costs against buying newer. View is for boat for the next 10 years at least, and came to conclusion that 5 year old boat was best for my circumstances. As Tranona pointed out, not so many of these available compared to 15 years old. Viewed a number of boats, this one ticks most boxes and is a good example. So suspect offer pending

5 years old is a pretty good time to buy a boat. Depreciation should've eased off, yet the maintenance costs of replacing systems within the boat shouldn't start to rise too much for a while yet.

 

[wotayottie]

I can recall on a past thread that someone had helpfully given a rough guide of expected depreciation of a new boat, some higher percentage over the first few years, dropping to a smaller % in following years.

I have been searching for this thread - no luck! Would someone be able to remind me of this information?

Have you sold the Starlight then or are you just thinking of it? Anyway, its some time since I was last in the market but at that point it was clear, as a broker pointead out, that HR had the depreciation issue beaten but all other makes suffered and the closer you got to the bottom makes like Bav, the greater the value fall.

 

[Tranona]

Thanks all, really helpful comments! Am looking at a 5 year old boat at the moment, and trying to get idea of value other than just broker price.

Ask the broker (or another one) to show you what similar boats have actually sold for. Chances are, though for the type of boat you are looking at there will be little data available.

Not sure going down the "how much will a new boat loses route" will help you establish a value. Value of used boats is determined solely by what buyers are willing to pay and sellers willing to sell at. It is the price it changes hands at which determines the rate of depreciation, not the other way round.

The asking price the broker has set is likely to be his best guess of what buyers are willing to pay based on his knowledge of the market (unless the owner has set a specific price). What you have to do is try to get the same sort of comparatives that he has used in setting the asking price. However at the end of the day it is you that has to decide what you are prepared to pay for the boat.

Mailbox now cleared of messages.

 

[West Coast]

Have you sold the Starlight then or are you just thinking of it? Anyway, its some time since I was last in the market but at that point it was clear, as a broker pointead out, that HR had the depreciation issue beaten but all other makes suffered and the closer you got to the bottom makes like Bav, the greater the value fall.

Just about to go on the market - the starlight is a great boat but am realistic about the price. She will be a good buy for someone, as I feel I have spent half my pension on her with upgrades etc, but this will not necessarily yield a higher sale price, but should make her more attractive to sell.

Sad to sell, but my wife's health condition is forcing us to do something different boatwise (separate thread a while ago!)

 

[sailaboutvic]

Just about to go on the market - the starlight is a great boat but am realistic about the price. She will be a good buy for someone, as I feel I have spent half my pension on her with upgrades etc, but this will not necessarily yield a higher sale price, but should make her more attractive to sell.

Sad to sell, but my wife's health condition is forcing us to do something different boatwise (separate thread a while ago!)

For us who have or had a genuine boat to put on the market , it can be heart breaking when you realise what they are worth after all the money and hard work keeping them up the a good condition .
We was offered some stupid money for our boat and had to hand on for a year before selling her for reality price .just 2 k less then we was asking But then we could afford to do that , others can't .
Starlight are a great boat and if it in a good condition then you should get some interest if you set the price right .
Ian dreading the day we have to hang up our sailing boots .
Good luck

 

[Quandary]

Finngulf 33, new in 2007, £125k plus about £10k on autopilot, instruments, liferaft, anchors etc. etc. Placed on brokerage 2015 asking price £79,500 based on actual (not asking) sale prices Europe wide. Best offer £75k less brokerage fees £70k, so depreciation in eight years close to 50%. It could have been worse with the financial hiatus in 2008 the new boat price in the UK rose to close to £150 k. Every broker has access to the actual prices any boat sells for and will use that to reduce your expectations in good time. If the boat had been moved to the more affluent and accessible South Coast of England I would have done better but I wanted to keep using her.

It was all a stupid mistake, I could not give up sailing after all and she was better than anything I could find since with most of depreciating already done.

 

[West Coast]

Finngulf 33, new in 2007, £125k plus about £10k on autopilot, instruments, liferaft, anchors etc. etc. Placed on brokerage 2015 asking price £79,500 based on actual (not asking) sale prices Europe wide. Best offer £75k less brokerage fees £70k, so depreciation in eight years close to 50%. It could have been worse with the financial hiatus in 2008 the new boat price in the UK rose to close to £150 k. Every broker has access to the actual prices any boat sells for and will use that to reduce your expectations in good time. If the boat had been moved to the more affluent and accessible South Coast of England I would have done better but I wanted to keep using her.

It was all a stupid mistake, I could not give up sailing after all and she was better than anything I could find since with most of depreciating already done.

There’s a fantastic starlight about to come on the market, great alternative to the Fingulf

 

[dunedin]

Currency fluctuations are a factor for new boats, as virtually no medium sized saily boats built in the U.K.
And this also applies to recent and attractive but low volume boats (Fingulf, HR, X etc), particularly those over €100k, which tend to be sought out and bought on a European wide basis.

Hence the fall in value of sterling may apparently make £ depreciation for more recent and specialist boats appear lower just now. As effectively value is locked (but still depreciating) in an asset effectively valued in Euros. This blip could of course rapidly reverse if the markets ever regain confidence in Sterling, but that is perhaps a moot and/or distant hope.

 

[GrahamM376]

Currency fluctuations are a factor for new boats, as virtually no medium sized saily boats built in the U.K.
And this also applies to recent and attractive but low volume boats (Fingulf, HR, X etc), particularly those over €100k, which tend to be sought out and bought on a European wide basis.

Hence the fall in value of sterling may apparently make £ depreciation for more recent and specialist boats appear lower just now. As effectively value is locked (but still depreciating) in an asset effectively valued in Euros. This blip could of course rapidly reverse if the markets ever regain confidence in Sterling, but that is perhaps a moot and/or distant hope.

If/when we leave the Customs Union the VAT status will have a large impact on the value of boats traded or used across borders. Those cheap boats in EU waters will presumably be subject to VAT if brought into the UK and those heading east may well find they have to pay VAT if leaving the boat there. Best get that new boat sorted in the next year whilst still EU VAT paid.

 

[Tranona]

Currency fluctuations are a factor for new boats, as virtually no medium sized saily boats built in the U.K.
And this also applies to recent and attractive but low volume boats (Fingulf, HR, X etc), particularly those over €100k, which tend to be sought out and bought on a European wide basis.

Hence the fall in value of sterling may apparently make £ depreciation for more recent and specialist boats appear lower just now. As effectively value is locked (but still depreciating) in an asset effectively valued in Euros. This blip could of course rapidly reverse if the markets ever regain confidence in Sterling, but that is perhaps a moot and/or distant hope.

Since I bought my boat in mid 2015 (when I got 1.36 euros to £) the list price of essentially the same boat in £s has risen by over 25%. So my asking price would be 65% of a comparable new boat.

Inevitably the price increases of the last 2 years has really hit UK sales of new boats which will lead to shortages in the used market in the future and might underpin higher used boat values of late model boats for a few years - perhaps!

 

[Tranona]

If/when we leave the Customs Union the VAT status will have a large impact on the value of boats traded or used across borders. Those cheap boats in EU waters will presumably be subject to VAT if brought into the UK and those heading east may well find they have to pay VAT if leaving the boat there. Best get that new boat sorted in the next year whilst still EU VAT paid.

That is all guesswork. There have been no hints even of what the position will be in respect of VAT when we leave the EU. Risky basing a buying strategy based on zero hard information.