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Old    Ryan Means (W8klover)      Join Date: Jul 2012       08-09-2012, 4:57 PM Reply   
I'm in the market for a boat, and I'm just curious how boat dealerships manage their inventory. Do they purchase the boats themselves, finance the boats from the dealer, etc.? How much of a markup is there on boats? I'm just wondering how much wiggle room dealers have with the price. It seems to me that they must mark up the boats quite a bit, otherwise, how do they stay in business with such limited inventory moving month to month. It's not like a car dealership that moves a lot more.

Just looking for any insight into the process. I want to know if they give me "their best price" if there really is any more room to negotiate.
Old    RB (boardman74)      Join Date: Jul 2012       08-09-2012, 6:16 PM Reply   
I know there is a bunch of mark up in boats just like RV's. Boats are more than likely the same as other high dollar items. The manufacturer extends the item as credit(dealer doesn't pay for it) for a certain period of time. If they sit on it to long then they end up buying it. Most dealerships have a revolving type of credit with their lender. They pay interest on the item but not a "payment" per say. They never really put out the retail price to buy them. They would go broke and run out of credit quick if they had to pay in full up front for every item. That being said they usually own used items more and possibly older new inventory.

If a dealership is giving you there honest best price than that should be it. Only way to find that out is to try to go lower. No matter how the process works that comes down to the individual dealership and maybe even the day of the week or time of the month. You'll never know unless you try.
Old    Delta Force (wakebordr11)      Join Date: May 2001       08-09-2012, 6:33 PM Reply   
There is ALWAYS room for negotiation, you the buyer must do your research and negotiate properly. Sales are made when the seller and buyer agree on a fair price, so it depends on what you're willing to pay. You've got to be realistic in your approach though, knocking 40% off sticker ain't gonna happen, depends on the time of year, like people said, the boat, the dealer, the color of the boat, the options, fair market price etc...
Old    Nick McDonald (lsukuntryboy)      Join Date: Jul 2007       08-09-2012, 6:56 PM Reply   
There is not always room to negotiate. I am a dealer and can think of 2 boat on my floorplan that i have priced that is not negotiable.... that being said, most are negotiable. A brand new, right off the truck boat, is definitely negotiable. but say a new full warranty 2011 right now, (depending on the dealers sales style) may not have room but will be offered for a no profit price to try to dump it.

Most people think that the longer the boat is there the cheaper is should cost. but at some point, the amount of interest the dealer has paid on the boat and the sales price will meet, then the cost of the boat starts going up. Then the dealer is losing money if the price still goes down. Dealers do not want to get to this point at all. trust me. One of my non negotiable boats is there, luckily its a fairly cheap aluminum fishing boat.
Old    Tucker McElroy (Tucker_McElroy)      Join Date: Mar 2012       08-09-2012, 6:58 PM Reply   
Dealers use to have "floor financing" which allowed them to buy boats from the manufacturer and put on the show room floor. After the crash, floor financing has become almost non-existent. This is why so many dealerships have changed over the last three years or so. The manufacturers allowed their dealers not to order floor boats for a year or two, but then the manufacturers started to feel the hurt and started forcing dealerships to buy boats or threatened to remove the dealership rights. This happened for many dealerships after 25+ years of brand loyalty. Now only the dealerships with cash are left (cash to the manufacturer), floor financing is still difficult to get. As a result many dealerships own the boats on the floor outright, and want to move boats fast. You can definitely negotiate.

For me, I would much rather deal with a business with a 25+ year positive track record, versus some fly-by-night operation with enough cash to buy boats directly. Will the new guys with deep pockets have a clue what they are doing, and will they be around In a couple years?
Old    Bryce (brycejb328)      Join Date: Aug 2009       08-09-2012, 8:24 PM Reply   
A lot of the negotiation has to do with the specific dealers theory on creating revenue and how they are managing their inventory / cash flow.

For instance, a dealer who has a boat that is about to incur interest charges on their floor plan may be willing to "unload" a specific unit for under his cost as he could be getting back charged on interest. On the other hand, some managers get attached to the inventory or the dealership doesn't have the financial means to let the boat go below what they have in it. So they hold onto it and take the chance of getting charged interest.

As explained already, dealers will get wayyyy upside down on something and they just won't let a unit go unless they can break even. A financially sound dealer in this situation will likely just take the hit, and let it go.
Old    Adam Curtis (acurtis_ttu)      Join Date: May 2004       08-10-2012, 6:33 AM Reply   
are boat dealers required to pay any sort of inventory tax on boats on an annual/quarterly basis similar ot car dealerships?
Old    Nick McDonald (lsukuntryboy)      Join Date: Jul 2007       08-10-2012, 7:02 AM Reply   
yes we do pay a inventory tax... at least in louisiana.... not looking forward to that. im a small dealer and it will cost me 20k.
Old    Tommy (Readyaimfire)      Join Date: Jun 2012       08-10-2012, 12:31 PM Reply   
Quote:
Originally Posted by Tucker_McElroy View Post
Dealers use to have "floor financing" which allowed them to buy boats from the manufacturer and put on the show room floor. After the crash, floor financing has become almost non-existent. This is why so many dealerships have changed over the last three years or so. The manufacturers allowed their dealers not to order floor boats for a year or two, but then the manufacturers started to feel the hurt and started forcing dealerships to buy boats or threatened to remove the dealership rights. This happened for many dealerships after 25+ years of brand loyalty. Now only the dealerships with cash are left (cash to the manufacturer), floor financing is still difficult to get. As a result many dealerships own the boats on the floor outright, and want to move boats fast. You can definitely negotiate.

For me, I would much rather deal with a business with a 25+ year positive track record, versus some fly-by-night operation with enough cash to buy boats directly. Will the new guys with deep pockets have a clue what they are doing, and will they be around In a couple years?
Yup, case in point.... California Correct Craft
Old    Brett Yates (polarbill)      Join Date: Jun 2003       08-10-2012, 12:47 PM Reply   
Quote:
Originally Posted by Readyaimfire View Post
Yup, case in point.... California Correct Craft
I am pretty sure this is what happened to Bakes as well.
Old     (Orange)      Join Date: Jun 2012       08-10-2012, 1:04 PM Reply   
The lack of flooring loans has caused a lot of turmoil in boat dealerships. Many manufacturers require dealers to carry inventory to be considered a dealer and get exclusive rights to some territory. Boat manufacturers aren't the juggernauts that auto manufacturers are and don't have the resources to offer credit themselves and relied on companies like GE Capital or local banks to offer flooring loans. When the financial crisis hit, banks and lenders ran like hell from lending against high priced luxury items like boats and RVs, so local dealers had no access to flooring loans, which meant they either paid cash for inventory or lost their dealership rights. I've noticed a number of dealers have consolidated - e.g., used to be separate dealers for each major manufacturer, but several closed shop and one or two dealers who had cash now act as dealers for multiple brands. I'm sure boat sales are still down and dealers aren't making a ton of money, but if the economy rebounds those remaining should be sitting pretty.

As for discounts and pricing, I've always heard 15-20% off of list as a good rule of thumb for a good discount. Anything above 20 is a really good deal... Below 15% doesnt necessarily mean its a bad deal - could be the best deal you can get if you're buying a high demand model or in the peak buying season.

I don't know how wide the differences in discounts to msrp differs from one manufacturer to another. To make it more complicated, I think there are a couple manufactuerres out there that don't publish list prices, so you'll be calculating the discount off whatever number the dealer chooses to tell you is list. I'd suggest contacting multiple dealers for those brands and see if each dealer tells you the same list price.

Curious what everyone else has seen for discount levels to compare to the 20% rule of thumb I've alway used. Sure would be nice if dealer costs and discounts were as readily available for boats as they are for cars...
Old    Hate N Pain (hatepain)      Join Date: Aug 2006       08-10-2012, 1:16 PM Reply   
My boat dealer floored all their boats with GE but can no longer either get flooring or do so under the constraints GE has in place. Its a bummer too because thery're a damn good dealer and had been around for 20+ years. They still oporate but just as a pro shop now similar to Bakes. Last I talked to them they could still order from Sanger but no longer stocked them.
Old    doug rose (dougr)      Join Date: Dec 2009       08-11-2012, 7:36 AM Reply   
i have a great relationship with my dealer, they will ask me if i want a new boat every year, ( they will be asking soon) because they have incentives to order more boats for there first order, some manufactor's will have volume pricing... more boats better price per boat, so last year, my dealer made made a crazy dela to get another boat on there pre season order and then i reaped the bennifit of helping them get a better overall volume price. They also wanted my old boat for inventory. Sometimes dealers struggle to get good used boats, a lot of wakeboat owners sell there boats on there own and I know my dealer is always looking for 3 and 4 year old vdrives. they are a malibu, centurion dealer that also have i/os, pontoons etc etc. i would find the boat you want and then start to shop for the dealer you feel good about and work out a new pre season 2013
Old    Dustin Lacefield (DustyL)      Join Date: Aug 2011       08-13-2012, 12:05 PM Reply   
Quote:
Originally Posted by Orange View Post
The lack of flooring loans has caused a lot of turmoil in boat dealerships. Many manufacturers require dealers to carry inventory to be considered a dealer and get exclusive rights to some territory. Boat manufacturers aren't the juggernauts that auto manufacturers are and don't have the resources to offer credit themselves and relied on companies like GE Capital or local banks to offer flooring loans. When the financial crisis hit, banks and lenders ran like hell from lending against high priced luxury items like boats and RVs, so local dealers had no access to flooring loans, which meant they either paid cash for inventory or lost their dealership rights. I've noticed a number of dealers have consolidated - e.g., used to be separate dealers for each major manufacturer, but several closed shop and one or two dealers who had cash now act as dealers for multiple brands. I'm sure boat sales are still down and dealers aren't making a ton of money, but if the economy rebounds those remaining should be sitting pretty.

As for discounts and pricing, I've always heard 15-20% off of list as a good rule of thumb for a good discount. Anything above 20 is a really good deal... Below 15% doesnt necessarily mean its a bad deal - could be the best deal you can get if you're buying a high demand model or in the peak buying season.

I don't know how wide the differences in discounts to msrp differs from one manufacturer to another. To make it more complicated, I think there are a couple manufactuerres out there that don't publish list prices, so you'll be calculating the discount off whatever number the dealer chooses to tell you is list. I'd suggest contacting multiple dealers for those brands and see if each dealer tells you the same list price.

Curious what everyone else has seen for discount levels to compare to the 20% rule of thumb I've alway used. Sure would be nice if dealer costs and discounts were as readily available for boats as they are for cars...
This rule could only pertain to certain manufacturers, because msrp will vary substantially between manufacturers. It's the dealers decision on how much they are willing to lower that price below the stated msrp. 20% does seem pretty substantial and in my opinion that number is closer to 10-15%. The reason dealer costs aren't available for boats is because people think they can negotiate similar percentages as cars... This is not possible because car dealerships sell a much higher volume of units per year than boat dealers. It is hard enough as it is for dealers to stay in business with this type of economy.

Calling other dealers to find out similar pricing will depend on the integrity of that dealer. If you are in California, but a dealer in Utah is willing to sell you the same boat for $1,000 less, it is most likely because they can get rid of inventory without having to ever see that customer or have potential problems with them due to their distance from one another. This is also selling out of the dealerships territory. The majority of the time this will create a bad relationship between you and your local dealer... And remember, dealers can refuse to service your boat and you will be stuck driving hours to the next closest dealer. 50% of the sale is the actual boat, the other half is the dealer. Just because you buy what some may think is the best manufacturer doesn't mean you will have a pleasant boating experience. Go with the dealer that has been established in your area and has a great reputation. Getting a better deal may sound like a good idea at first, but could have you hating your boat in the long run.

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