Sunsail charter scheme: my dilemma.

[Anthony3200]

Further to a message I posted several weeks ago regarding the sunsail charter purchase scheme, I've had lots of useful feedback and information from both users on this forum and Sunsail themselves, which has raised another issue on which I would like your advice.

The boat that I would like (Oceanis 34ft) is sold by Sunsail for £89,900 excVAT. Under the payment scheme that I am interested in, over 5.5 years I will receive a monthly income of £8,990, totalling £49,445 gross. This means that for a 5.5 year yacht, in addition to up to 13 weeks of chartering each year, I would pay £40,445.

Now, I don't need 13 weeks of chartering a year - for the 5.5 years I would probably only use 2 weeks each year at most (of course, after the 5.5. years I am going to use it intensively, sailing round the Med). The sunsail scheme allows me to (privately) sell my unused units (so, 11 weeks a year) to third parties, reducing that figure further.

So, my first question is: how much do you think people would be willing to pay for a week's charter of my 34ft yacht (which would be maintained by Sunsail during this time - so would be clean etc) in the Med? According to the Sunsail website, 2 people, hiring the same boat for one week would be £1970, including flights!

Do you think it would be feasible for me to reduce the £40,445 further by privately selling my 11 spare weeks to others at a lower rate than Sunsail offer? Technically, you are not supposed to do this, but for 'friends and work colleagues' this is fine.

Ok, now the tricky bit. If I want to sell my 11 weeks on, it is important to realise that I may not be able to actually sell all those 11 units because of lack of demand. Under the sunsail scheme, I can carry unused units over to following years: so, if there is low demand one year, it can be counterbalanced by high demand the next. My other question, therefore, is do you think there would be enough demand for me to be able to sell 11 weeks of off-peak sailing per year successfully?

If I manage to sell 11 weeks for each of the 5.5. years (so, 60.5 weeks total) I would need to charge £670 for each week. This would pay the entire cost of the yacht off for me, but would leave me to pay just the VAT. This would also mean that people buying from me would be able to pay £670 (plus flights) for a week's worth of sailing, irregardless of numbers on the boat, compared to £1970 per week that Sunsail wants to charge (for two people). Clearly, everyone is a winner.

Of course, there is the big final question: do you think that this plan is feasible in practice, or do you think I am hopelessly lost and in risk of losing a lot of money on a 5.5. year worn and used boat that I could pick up cheaper by buying a second-hand boat outright from the very beginning?

Thanks!

 

[bedouin]

Don't forget Tax. You may need to pay the VAT, and you will almost certainly have to pay income tax on the income.

IMHO the scheme only makes sense if you are able to make good use of the free chartering.

 

[bedouin]

Checking the Sunsail site you will see that they are selling 5.5yr old 33' Beneteaux for about £35K

 

[Ben_e_Toe]

You also need to factor in the opportunity cost of having £86,000 tied up for 5.5 years, even at 4.75% that's £22,400. That's not taking into account compounding, so the figure will be even higher.

Also with an imminent recession, used prices will soften - particularly on mass-produced ex-charter boats!

 

[Guest]

Also ....

I do not think SS will like the idea of a 1/3rd price week on a boat that they are "subsidising" and basically in competition with their own boats ... / weeks.

I would think that somewhere there will be a clause somwhere incurring penalty or restriction ....

If the scheme was so good - everyone would do it ... surely ? I looked at it years ago and my maths - even though basic- showed I was a loser .... that was Moorings and Sunsail ... both.

 

[bobupanddown]

Sunsail usually discount all their yacht charters at some point during the year so the brochure price is usually much more than you actually pay (unless u book up months in advance).
A good idea is to look at a website such as www.latesail.com. Who market last minute charters. This may give you some idea of the "going rate". I believe Sunsail have the number 1921 on that website.
I was offered a weeks hire of a Beneteau 411 in the BVI's from a person with a Sunsail Yacht but it worked out cheaper to direct with a Sunsail discount package!
Why not just charter a yacht for the few weeks you are going to use it over the next few years and then buy an ex charter yacht when you decide to use it a lot more. You will then have a huge choice of second hand yachts for sale and have had the benefit of the money in the bank in between

 

[Guest]

Not only higher price after 5 yrs ....

Do you really want a Charter layout boat - with the extra bunks etc. I would be more inclined to an owners layout ... at less price at 5 yrs old.

 

[twisterkai]

As others have said, if it really was as simple and good as that then more peeps would be doing it. On a rather more practical side, do you really want to have the best part of £90k tied up for 5.5 yrs for only 11 wks personal use? Seems like a bloidy expensive method for 2 wks in the sun each year.

In terms of off season chartering, all the companies offer huge discounts when it's out of season, so I would have though it improbable that you'd manage to 'sell off' your remaining 11 wks. I was also under the impression that the larger yachts were more popular, especially out of season when the weather is likely to be less 'stable'.

When the likes of Sunsail dispose of their 5.5 yr old boats they've probably had the same use as a 10-15 yr old in private use, so when comparing prices bear that in mind, it's not such a bargain then.

If I were you, I'd stash the cash, charter for the next 5 or so years and then look to buy a s/h(?) privately owned yacht when you're ready to do the long term stuff.

Good luck with it whatever you decide.

 

[brianhumber]

Your last para holds the key words worn and used boat.

During Cowes week I used to see a sad sight of T Boned and bumped boats in Port Sunlight.

I have also seen the abuse the engines, sterns and keels get on Flotty hollys in Greece and the Turkey, good luck is all I can say. I concur with others who say keep your dosh liquid and buy in 5 years time.

 

[cliff]

Your £89,900 + VAT compounded at 4.75% over 5½ years comes to £134,981.75 so the boat will cost you approx 135k over the 5 years

Your £8,990 per ANNUM income (compounded at 4.75%pa) will nett you £54,592.16 over 5½ years on which you will pay £10,299.74 in tax at 25% over the 5½ years leaving you a balance of £44,292.42

You will be out of pocket at the end of the 5½ years by £90689.33.

This is based on you depositing £105,632.50 (£89,900 +vat) in a bank at 4.75%

By these figures your 5½ year old boat will cost you £90689.33.

I would think you could buy a 5½ year old oceanis 34 for a lot less than that!

The figures do not add up in my books. Perhaps some CAs on the forums can put a different slant on the numbers /forums/images/graemlins/crazy.gif

Nearly forgot - who is going to pay the insurance for your 11 weeks private use / charter?
--------------------

"Artificial intelligence is no match for natural stupidity"

 

[jimi]

I think the simple answer (and I'm sure sunsail would concur) is

1) Its not a way of getting a cheap yacht.

2) It is a way of getting lots of cheapish holidays.

If you want 1 its not for you, if you want 2 then cost it out and it may fly.

 

[moondancer]

I still can't work out why you just don't charter a boat. If you are using it for only 2 weeks per year it seems the best thing to do. I can understand buying a boat even if you only use it occasionally but it sits near you and you can go and fettle it. But I really can't understand the attraction of this deal for the amount of use you want.

Brian

 

[cliff]

Think you addressed your reply to the wrong person - no way would I buy a charter boat.
--------------------

"Artificial intelligence is no match for natural stupidity"

 

[Anthony3200]

Well, after 5.5. years I intend on taking two years off to go sailing on it, after which point I will clearly use it a lot more.

Some people have asked - if it's this good, why isn't everyone doing it, but following from some of the replies to this thread, if it's that bad, why is anyone doing it at all? I just saw it as a cheap way of getting a reduced price boat that may be 5,.5. years old and slightly worn, but which will pay at least half of itself off in the meantime and which will give me plenty of enjoyment when the scheme is up.

 

[Guest]

Costing out ?

Say for example you go for it and manage to sell off near half of your weeks at serious discounted rates ... then at 5.5 yrs you have boat handed to you for £x thou.

Compare to ...(not doing the scheme) and :

Same weeks that you don't sell - you charter at serious discount rates a boat and get your sailing kicks. At end of 5.5 yrs buy an ex charter boat at probably greater reduced price than your scheme boat would be ?

Which is better ? Do the scheme, trust that Sunsail etc. will deliver unto you a good boat at end of 5.5 yrs etc. and pay maybe 20% more price at that age.
Or enjoy sailing and then buy a boat of your choice after checking those available at possibly 20% less price ....

It is a difficult one and one that I do not envy you over. I can say this that Sunsail / Moorings etc. rely on the "I want this" factor and partial blindness to possible pitfalls .... There are those that have done good deals and got what they wanted, but there are probably as many or more that have re-considered what they signed up for ....

Why if tyhe scheme is so good are 5.5 yr old boats up for sale .. why are they not now being enjoyed by happy scheme owners .....

My Brother - who often takes a holiday in med - always comes back with handfuls of photos / leaflets of boats for sale out there - ex charter, owners abandoned etc. etc. - all at interesting prices .... my question - Why ?

Sorry if I burst the bubble ... but I think a very careful study of costs over the 5.5 yrs and final payment needs to be done.

have you considered if you cannot sell those weeks ??

 

[StugeronSteve]

Re: Costing out ?

[ QUOTE ]
Why if tyhe scheme is so good are 5.5 yr old boats up for sale .. why are they not now being enjoyed by happy scheme owners .....

[/ QUOTE ] Because, if my understanding is correct, not all Sunsail boats are charter managed. Many, if not most, are owned by the charter company themselves.

 

[Guest]

Sorry my wording ...

What I mean is why do not more people do it ...

The number of boats up for sale at that age indicates that it is not the scheme people want to go in for ... second at 5.5 yrs old - a bota is still young and should be in fine condition ... so why sell off ?? I think we can all see part of the reason - plus of course there may be an Insurance factor - same as Holiday Mobile Homes at 8 - 10 yrs old ???

 

[Rich_F]

Assuming you want to take two weeks holiday per year, and have a 5.5 year old ex-charter boat in 5.5 years, there are two alternatives. One is the method you have suggested, and the other is to charter each year and buy at the end.

Cliff has started on covering the costs of the former approach...

[ QUOTE ]
Your £89,900 + VAT compounded at 4.75% over 5½ years comes to £134,981.75 so the boat will cost you approx 135k over the 5 years

Your £8,990 per ANNUM income (compounded at 4.75%pa) will nett you £54,592.16 over 5½ years on which you will pay £10,299.74 in tax at 25% over the 5½ years leaving you a balance of £44,292.42

You will be out of pocket at the end of the 5½ years by £90689.33.

[/ QUOTE ]

The other approach might be costed as follows.

You keep your money in the bank, and earn £45000 interest.

You spend, say, £3,000 per year chartering - £15,000 total. This reduces your interest to £30,000.

You then buy an ex-charter boat for £35000 - The total cost to you now being £5,000.

So, for the buying approach to be more economical, you need to raise £85,000. That's £15,000 per year. Or around £1,500 net income per off-peak week - putting the price you charge at around £2,500.

In addition, the second approach gives you reduced flexibility - you can't easily change your plan part way through, or decide you'd like a boat at the end that hadn't been crashed into a harbour wall by seom moron in week 1.

 

[dedwards]

Re: Costing out ?

Sunsail also encourage you to sell your boat to them at the end of the scheme and start afresh, which may help to explain the quantities for sale.

As somebody has said earlier, the alternative option of not going into the scheme, paying for charters for 5 years and then buying an ex-sunsail boat at the end will cost a comparable amount. In my eyes, the flexibility of not being locked into a 5.5 yr scheme and the elimination of risk and hassle of selling credits/ensuring boat is ok when you get it back makes the alternative a lot more appealing.

 

[bbg]

I have to agree with the views of others above. If your intention is to get a cheap boat in 5 years, this is not the way to do it. If your intention is to get 13 weeks of sailing per year cheaper than owning the boat outright, this might make sense.

Don't forget that at the end of the charter period, you will have to pay VAT - on the reduced value of the boat.

If you want a cheap boat if 5 years time, I suggest you look at s/h boats then. In addition to having a much greater choice of boats, you can also choose to own one that has not been involved in a major grounding / collission (and have it surveyed). You have no idea what shape "your" boat will be in after 5 years of chartering.

As they say, "nothing drives like a rental".

I don't mean to offend, but it looks to me like you have made up your mind already, and you want support from the panel. Good luck if you decide to go ahead in spite of the responses you have received.