Boat Trading

New member but been lurking for a few months.

I notice a lot of guys consistantly trade-in one and two year old boats for newer models (many with less than 50-70 hours). How many of you guys do this and what kind of depreciation hits are you taking every year or two. That has to get expensive.

My family (kids - 3 boys) is new to wakeboarding so I purchased a new (06) Monterey 194FS I/O with tower. This is a very family friendly boat but the kids are advancing faster than I thought so am looking to get a real wakeboard boat - possibly for next season. My dealer also sells MC but is telling me I am going to take a pretty big hit on a trade.

Boat dealers rarely want to take a trade in. Your best bet is to sell your current boat yourself.

I feel for your situation. I used to own a tournament ski boat that had been my father's, so it was old but paid for! My son started wakeboarding when he was 13 and was soon pushing me to get a new boat or at least a tower.

He really wanted me to get a "Super Air Nautique" but I was still clinging to slalom skiing so I opted for the "Air Nautique". That was in 2000. Three years later I was buying the Super Air Nautique.

I was pleased with the resale value of the Nautique, I didn't take too bad of a bath on it. I can't comment on the resale value of your Monterey, however.

If you trade it, you will take a big hit. Sell it yourself, and it will be little more controlled and easier to bare.

The guys that trade in new boats every year or so have a lot more money (or less obligations) then most of us.

Bob- We in the last couple days just traded in a 2005 Centurion with 70 hours on it, and took a pretty big depreciating hit, but it was definitely worth it because the dealer we had was more than a nigthmare to deal with and we wanted to just get far far away, so traded it to the new dealer and got a decent deal on the new boat, so we prolly lost about 8-10 grand in the first year of the centurion.

Last year I found myself in a similar situation. We bought a 05 Fourwinns in June and by the end of Sept. my wife and I knew that we should have went with a wakeboard boat. I wish we had of known about this website before we bought the Fourwinns. Anyways we didn't try to sell our boat until Jan/Feb.(and it didn't actually sell until April)too late for the boat show deals. We ended up loosing about $4500 dollars. If I could offer you any advice at all it would be to try to sell it now, maybe you can give someone a good deal on it b/c you won't have to make any payments for a couple of months. When boat show season comes around, you will be very happy that you don't have the Monterey holding you down. That's just my two cents. Good luck with whatever you decide to do!

Keep in mind the other side of this coin. You can pick up a very nice boat by buying one of these trade-ins (minus the depreciation). Most are well taken care and have the remainder of the warranties. This should help offeset the hit you'll take on your boat should you decide to trade it in.

The flip side of the coin is that my dealer took my '03 MB with 852 hours on it gave me more than I owed on it and gave me the best deal I have ever heard of on an '06 SAN. I love my dealer!

whats the average depreciation on a new boat? and does this include the money spent on the sales tax?

what 10% so 44k for a new boat 6k for sales tax and its now worth 45k? minus if you have a huge amt of hours or not well taken care of?

Bocephus

Give us more details....
your profile shows different?

(Message edited by ghostrider_2 on July 31, 2006)

one other consideration is the sales tax in a state like Texas. On a new boat you pay tax on the sales price less the value of a trade. The best scenario is to find a private buyer for your old boat, then have the dealer handle the transaction as a trade-in, selling your boat to your buyer at your price. If he makes a couple hundred for handling the paperwork that's OK. The only loser in this transaction is the state.

When you drive a new boat off the lot, you can expect to the value to drop anywhere from 10-20% (depending on mfg, location, if you paid retail, etc).

Keep in mind that probably half (if not more) of the people you see on here that sell current year models with 100-200 hours on them are either a salesperson/dealer employee, connected rider, rep, or perform some other industry function. This is pretty specific to the wake/inboard industry.

The others who are selling typically aren't concerned with what they lose on it.

The real winner in those scenario's is the next buyer who gets a like new boat at a great price.

I appreciate all the responses and agree that folks that trade every year end up making it easier and cheaper for those who are after a good and slightly used boat. The question was prompted by seeing classified ads for 06 boats and when the seller was asked why they were getting rid of it, the answer was either "divorce" or "07 on the way". Being that I am one of those that is considering taking a hit on a trade, it struck me that an awful lot of folks are knowingly loosing some serious bucks every year or two.

My dealer said that he knew I was going to upgrade one day (as my kids advanced) but had know idea I would consider doing it so soon. I will probably sack the boat and change prop pitch in order to at least finish the season out.

thanks again.

Rich, the only issue with that is finding a buyer willing to do that. Most who have bought and sold boats in Texas know that the regulatory agency (I'll leave the name out) issuing the registration have no idea as to what the used boat is worth. The process is very archaic. Have you heard them try to pronouce Tige'...lol.

Then there is the large group of folks sitting in the background swooping on all these depreciated but very nice boats. We are the ones that love you rich folks out there "upgrading". I guess I put more priority on wake than looking cool and having the latest and greatest. I guess I just like the d--k measuring contest it turns into, at my lake if you rock an old boat people judge you. I love being judged by people that don't know how to ride...

Heavy- yeah, its kinda funny how all too often the people rocking the older-ish boats are throwin down, and the people with the new boats suck and clueless about water etiquette

Adam, I know what you're talking about. I have a personal pet peeve that the state can tax a transaction between consenting adults - a true invasion of privacy; it's none of their business. Some banks who finance the used boat include the state sales tax in the loan, so you can't get around it. Having the dealer handle the trade would mostly benefit the seller. I've had a few friends work it that way.

Rich, also in many states the dealer has to charge sales tax on the used boat, where between individuals there is no tax. So the private party buying your boat, won't want to go thru the dealer and pay an extra $2-4k.

"I have a personal pet peeve that the state can tax a transaction between consenting adults"

Why exactly is that, Rich? It's a sale. That means it's subject to SALES tax. If you sell anything you're in theory supposed to pay tax on it. I'm not some crazy liberal or even an uncrazy liberal (if they exist) but the state has the right to tax sales transactions and on large purchases like boats, I can see why they go through some great legnths in some cases to make it hard for people to cheat the system. This has nothing to do with privacy as the state doesn't care what got sold to who as long as they get the tax money from the transaction.

Dante, you make some valid points but I guess we just look at things differently. We're talking about a private transaction between individuals. The state is providing no services in regulating this part of the economy, yet they feel free to tax this transfer of money.

You said "the state has the right to tax sales transactions"..., who gives them the right? WE DO. The goverment does not have rights unless granted by the citizens, but I think that has turned around. How far will it go. If I sell my old lawn mower to my neighbor, do I owe tax? What about a garage sale? Anyway, I just said it was a pet peeve, I didn't say I had a legal leg to stand on. (rant over)

So my 2 cents, but the goverment has no business in "personal transactions" all they do is fraud,waste,and abuse. Its not like it actually goes to help improve our schools like they say the loto money does (ya right!). It may not be legal but its not like they are doing what are elected to do. Heres food for thought in CA you get you own personal gov't vech of choice when you leave or 4 years you get the option of buying the vech from the state for ..................

$1.00

nice little secret they have, and they want own tax money from a personal transaction for what, another multi-million dollar home on the beach

off my little soap box.......

Kenny (ghostrider_2),
I fixed my profile for you.

I know you guys don't think it is so, but I looked and looked in the boat trader, several forums, etc. and I couldn't find a used boat cheaper than I could buy my current boat for and still sell the boat I traded in. I got pretty close on a deal out of Kentucky but I would have had to sell my boat on my own, drive to Kentucky, and then hope that my dealer would give me the same service they are currently giving me now. I don't think you can find a 1 year old used Nautique for 10-20% cheaper that you guys are claiming, even more so if you have a boat to trade.

hey any other pics of your new nati?

what kind of deal did you get?

Kenny,
There are a few more pictures in here:
http://www.wakeworld.com/MB/Discus/messages/3183/348834.html?1154490711

I'm almost at the bottom. I was told that all the western dealers got a speical boat from Correct Craft at a lower than normal price, they were all signature series which don't have a lot of options or bling. I bought mine for less than any '05 I could find on boat trader.

looks sweet!!

Dante since your so knowledgeable about taxing I was wondering if you know why the govt feels they can tax an item that THEY already recieved the appropriate tax due on said item?? To me this seems like double taxation. I can see a difference thru a dealer though but a private transaction for cars or boats?? Uncle sam got his cut?? I feel the same about property taxes and the initial house purchase...double taxation??

It's not double taxation. It's a sales tax, not an item tax. There were two sales and you're being taxed on each of them. And for what it's worth, Uncle Sam didn't get a cut of the sales tax as there's not currently a national sales tax. Uncle Sam will get a cut of the earnings since our Federal governent taxes based on income (and maybe a few tariffs depending on the item and where it came from).

Even if it were "double taxation," you are aware that items get taxes many times before they end up in your hands, right? Personally, I'm more upset about the taxes I don't see than I am about the ones right in front of me.

And why should a dealer transaction any different than a private transaction for tax purposes?

And a final point: one question mark will suffice.

TO get away from the tax issues for a minute, you may have a little more trouble selling your Monterey than a true WB boat. I agree, try and unload it right now if you plan to sell. Save yourself some payments and the cost of winter storage.

Many of the people who are trading every 1-2 years are getting some smoking deals on new boats. The dealer loves them, gauranteed sale every few years, and if the dealer gets the trade he will make double money.

When buying my 06 in 05, I looked at a couple adds for 05 boats that were used. When comparing option for option and adjusting the prices I might have saved 2-3K over buying new, but would have to take the colors etc. that someone else picked, not my own. It just was not worth it to me.

In most states when the buyer goes to register the boat the state will collect the sales tax. If the sale occured between individuals.

In TN For the person selling the boat to avoid paying sales tax on the full price of the new boat you can show the state that you "traded" a boat in (sold it on your own) and the state will reimburse you the tax on the amount of the boat you sold.

To reduce the hassle of going to the state several dealers I have talked with said that they will condust the sales transaction after I find a buyer as a trade-in which reduces the purchase price of the new boat and the amount of sales tax due.

I'll have to back Rich G on this one that WE are just accepting the govts rule now instead of fighting it by pulling the carpets out from under these politicians who are playing games with our money. Oh yea I'll continue my non conformist ??? multiple question marks and other improper grammar as long as this is still a free country and board........................... Im not writing a book and you got my point. Merry weekend