The 5 year boat value formula

M

mjcp

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Reading about the cost/value of doing a rebuild, incl new gelcoat etc, on an old boat might be a good starting point for a Friday afternoon / rule of thumb type discussion of boat values:


Excluding new boats and expensive wooden antiques, is there a "rule of thumb" value formula for the run of the mill used AWB sailing boat?


Something like:

"In 5 year's time, the resale "value" will be 1/2 what you paid and will have cost you 50% of what you bought it for in running / maintenances etc.

And if you get out on the positive side of one or both, you have done ok."



e.g. You buy a newer AWB, so your maintenance costs / kit replacements etc might be lower, but your depreciation is higher. Vs. You buy a cheaper / older boat, that's already well depreciated, but your maintenance costs will likely be higher, needing new kit and refurbishment (more probably).


Enjoy!
M
 
If we thought about depreciation very few of us would buy a boat !

Every boat I looked at last year all required money to be spent to bring them up to a level I would be happy with.

The one I have purchased had a few extra 'faults' that only became visible when some grinding back was done and have costed a quite a few ££ hundreds and a lot of time.
 
To make it more lounge friendly perhaps we could have the same discussion about cars? Much the same principles must apply?
Or we could stick it in scuttlebutt-----!!
 
The short answer in my view is NO. There are way too many variables for a general rule-of-thumb to be of much use.

In a year's time I'd have had my 1982 boat for twenty years. By that time I'd have spent about twice again more what I paid for her in 2007 (lots of extensive big-ticket renewal items, all new engine and stern-gear, new sails and rigging, topsides respray, coppercoat, interior strip and refinish, new upholst, and plenty of modern upgrades, additional kit, etc - including a teak deck removal solution scheduled for this autumn). But by then she'd still not be worth too much more than I paid in 2007... and that's all before factoring for inflation!

Or I could have sold her two years later with little extra spent (i.e. just before the big original old engine catastrophe started me down the long-term money-pit route) and I'd have got most of my money back... but where would the fun have been it that?!

So just buy a boat and go sailing, and expect to spend as much or as little extra money as you have to over time, and sell it at the end... and forget rules-of-thumb.
 
I had my last boat for 9 years and got virtually what I paid for her however I probably spent in excess of £30K on her not including marina fees and winter storage haul out etc. I must have sailed close to 17,000 miles in her during that time and she was looking a lot better when I sold her than when I bought her.
 
Ours is one of the odd ones, and if we fail to account for inflation (most of us are men and can work with this little bit of man maths) ours is worth about 80% of it’s original purchase price. Money spent in the interim… probably the original purchase price again. 1 new motor, several seys of sails, standing and running rigging, berth cushions, sprayhoods etc. We’ve spent a large proportion of what we paid during the 5 years of ownership. She is just over 20 years old. We’d probably get back all of our money currently, but the sails depreciate fairly quickly, so that’s only cos she has new sails.
 
mjcp said:
"In 5 year's time, the resale "value" will be 1/2 what you paid
Click to expand...

one reason why it's not as simple as that, is that the value of used boats depends on the cost of new boats.

the cost of new boats rises with inflation, so we would expect that the value of used boats rises with inflation, especially inflation for materials used in boat building.

so, at least in nominal terms, a used boat will keep a greater percentage of it's value in times of higher inflation than in times of lower inflation

now, if you wanted to say some % of its inflation adjusted value, it might be possible to come up with a rule
 
I thought the market was supposed to be slowly collapsing, hence all the free boats?

If this is true, these pleasant past experiences may not be projectablr into the future
 
ducked said:
I thought the market was supposed to be slowly collapsing, hence all the free boats?

If this is true, these pleasant past experiences may not be projectablr into the future
Click to expand...
They aren't free boats they are someones scrap and headache which they are trying to palm of onto unsuspecting innocents
 
I have seen a suggestion that 1. Take the vat off. 2. Depreciate it by 10% per annum.

It’s a compound effect so after 5 yrs a £100k boat is worth £59k and after 10ys about £35k.

HOWEVER people tend to make additions/improvements over the years (eg sprayhoods, stack packs, autopilots, etc) which make that formula a bit too Simplistic (you won’t get all your money back on upgrades but clearly sister ships bought the same day and with different levels of improvement have different resale value).

My boat has essentially held its exVAT price each time it has been sold but has been improved in between. Of course that ignores inflation. It’s also probably helped that almost nobody makes 32’ boats anymore.
 
ylop said:
I have seen a suggestion that 1. Take the vat off. 2. Depreciate it by 10% per annum.

It’s a compound effect so after 5 yrs a £100k boat is worth £59k and after 10ys about £35k.

HOWEVER people tend to make additions/improvements over the years (eg sprayhoods, stack packs, autopilots, etc) which make that formula a bit too Simplistic (you won’t get all your money back on upgrades but clearly sister ships bought the same day and with different levels of improvement have different resale value).

My boat has essentially held its exVAT price each time it has been sold but has been improved in between. Of course that ignores inflation. It’s also probably helped that almost nobody makes 32’ boats anymore.
Click to expand...
Oh and if you time it wrong so the sail drive seal, running rigging and standing rigging are all due for replacement that year it’s going to be worth much less than one which has just had those expensive jobs done.
 
With hindsight, an antique teak log boat catamaran, with no hollowed out bits, would probably be inflation busting ..

But a pig to sail
 
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