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The
Big Decision: To Buy New or a Pre-Owned?
Ed
Massey is the founder and president
of Massey Yacht Sales & Services, with dealer locations
at Regatta Pointe Marina in Palmetto, FL and the Harborage
Marina in St Petersburg, Florida.
Q:
For prospective sailboat buyers, there’s
always the big question - Why purchase a new sailboat
versus a pre-owned sailboat?
A: Assuming that budget is not a serious
consideration, there are many good reasons to purchase
a new yacht. This is particularly true for the first or
second time yacht purchaser.
KEY BENEFITS OF BUYING NEW:
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New is better because it is new; you are the first
owner.
New boat warranties are better than no warranty
for a
pre-owned. There may be extended warranties available,
which provides more peace of mind.
You purchase the most current technology
Your new boat will have the latest design and naval
architecture
Electronics will be state of the art with the newest
software
Sails and sail plans will benefit from new designs
New mechanical, electrical and plumbing systems(MEP)
Less yacht maintenance time and expense, more time
for sailing
Possible boat show purchase incentives
Possible trade in of current boat (if applicable)
New yacht owner orientation available from dealer
Dealer support during warranty period
No pre-owned yacht survey or sea trial expense
Best possible yacht financing and insurance |
Q:
On the other hand, what are the major benefits
of buying a pre-owned yacht?
A: Purchasing a pre-owned yacht can make
your yacht purchase dollars go further, thus allowing
more sailors to enjoy the sport. Doing your own yacht
refit or basic upgrade can be a rewarding experience,
particularly if you’re a seasoned yachtsman with
rigging and woodworking skills.
KEY BENEFITS OF BUYING PRE-OWNED:
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Pre-owned yachts cost less than new
Shopping for a pre-owned yacht can be fun and educational
Monthly mortgage payment will be less
Cost of insurance will be less
Older designs have more classic lines
You choose from a wide variety of yachts
The depreciation curve has flattened out
Pre-owned is preferable if you do not plan to own
the yacht for at least four years
Upgrading your yacht can be a rewarding experience,
particularly if it is a family effort |
Q:
How do you recommend someone realistically compare
the benefits of new versus used?
A: On balance, if a person can afford
a new yacht, that is almost always the preferred yacht
to purchase. This is particularly true of first
or second time yacht purchasers. The factory and
dealer warranties are important. Extended warranties,
if available, are important. On-site dealer support
is important. None of those items are available
on a pre-owned yacht. Typically a person buying
a new yacht needs to keep it for about five years so that
the depreciation is not so great.
A pre-owned yacht is good, particularly if a yacht purchaser
is on a budget and cannot afford a new yacht. Also
if they have owned several yachts and know how to maintain
and fix items, pre-owned might be the right choice.
Most of the depreciation is gone on a pre-owned yacht
and that is important if a purchaser is not planning on
keeping the yacht for more than a year or two.
Q:
How do you properly assess a used boat?
What do you look for/consider?
A: Someone purchasing a pre-owned yacht
should always have a survey performed on the yacht they
plan to purchase. They should make that a condition of
the offer to purchase contract. In addition, most
finance and insurance companies will require this survey.
A typical survey on a 40' or smaller yacht will cost about
$500, and it is definitely money well spent. Remember:
there is no dealer or manufacturer warranty on pre-owned
yachts so it is important to know about any deficiencies.
Also a purchaser should try to work with a trusted brokerage
sales person who will give them good advice and the benefit
of their experience.
Q:
What type of financing is available for new and
used boats?
A:Marine financing is the same for new
and fairly late model pre-owned yachts. Most finance
companies require about 20% down payment. Mortgages
are usually for 10 to 20 years terms. Yacht financing
is very similar to home financing, only for shorter terms.
Some yacht purchasers prefer to use the equity in their
homes to pay for their yachts. This usually results
in low interest rates and the assurance of mortgage interest
tax benefits.
Q:
What type of warranties are available on new and
used boats?
A: New yacht warranties include those
offered by the yacht builder, the dealer, the supplier
of many of the major components on the yacht, as well
as extended warranties. There are usually separate
and longer warranties on the boat bottom (hull).
Pre-owned yachts do not typically have warranties or qualify
for extended warranties. Warranties are one important
difference between new and pre-owned options.
Q:
How do I take the next step?
A:Analyze your budget situation to determine
if you can afford to buy new. If you’re not sure
what your budget can afford, do some shopping at your
local dealership or at the boat show, and/or speak with
your financial institution/lender about available rates
and what you can afford. Once you’ve determined
if new or used is the right/best route, then start to
do your homework via website research, onsite dealership
visits, etc. The most important thing: Get Started! Your
sailing adventure awaits!
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