Used boat value down now but will go up soon!

After talking with a local boat dealership and hearing how bad things are, I realized if anyone is interested in a boat, the next 12 months are the best time ever to buy. Once these dealerships get ride of the stock they have (at unbelievable low prices), they will be passing the 2010 price increase that all the boat manufactures are doing on to us the customer.

So, what does this mean for used boats. Right now used boat values are really, really down... but in 18 months when the price of new boats will be higher than anytime previously, and there are no 2008 or 2009 new boats on any lots, the used boats prices will all go up accordingly. If you want to own a boat, you will either pay the 10% price inncrease for a new boat, or settle for a used boat... thus pulling up the price on the used boats. I wouldn't be surprised if our used boats are worth more in 18 months than they are now...weird huh.

Just some random thoughts while a wait for a meeting to start...

-Uj

So does this mean your steppin up to a mans boat?...LOL...Just feel out of my chair...haha

Ha ha ha... If I were, you know whos chair it would be... and it ain't yours! You know I like that Navy Star we star at INT... at $90K sticker... ouch!

My Super Air is 60 days away from being all mine! Can't wait... but at the same time... new boat prices are insanly low right now.

Everyone... if you have job, and are confidnet you won't loose it... go buy a damn boat now because 18 months from now when you decide to, you're gonna pay dearly!!!

I was just playin with ya homie! You know I have had some of my best rides behind Bucky!

Where's the best place to find standard used boat values? Is there something like Blue Book for boats?

NadaGuide.com is a good source for values. My 06 Sanger has held pretty solid. Only down 4k from what I paid in 06.

Sparky, I don't think Nada is a good guide at all right now. The price its worth is the price you sell it for... meaning the book can say all it wants, but the reality is that a smart shopper will soon find that they can a brand new boat with a warranty for just a bit more. Litterally, boat places are selling new boats for a loss at this point just to get out of their flooring monthly costs. I would love to think I could get Nada pricing for mine, but who has the cash for a used boat... If you think banks are tough on new boat loans... go ask them how much down they want on a used boat loan... One of the major driver of used boat purchases in Cali is home eq line of credit... HA.... who has any equity!!!

UncleJessie is right on both counts.
NADA is not a get source unless you use that as your base point for how much lower you plan on selling your boat for. It seems to me that what ever the NADA says the value of your boat is you better plan on taking $3000.00 to $8000.00 less.

In the past year every demo boat that has sold form my line has had to be discounted a lot. This is mainly because for what it will cost you to buy a demo boat that comes with a full factory warranty at normal pricing, you could buy a brand new one for $6000.00 more with all the discounts that are currently being offered. That may seem like a lot but when you are planning on spending $48000.00 for a boat it is not that much more.
Once the demos are gone the new ones will sell faster and for more money. Same with another local dealer of another brand. He is only planning on ordering 4 new boats this year. Since he wont have dozens on the lot, it wont cost as much to stock the boats as it has in the past. This will allow him to hold out for more until the end of next summer. Then what ever he has left (probably none) he can start to discount then. Basically none of the dealers are ordering any new boats or few (4-8) if any. They are still sitting on 08's and they have to sell those first before getting new ones in most cases.

Any "blue book" type value is subjective to alot of things that are going on with the economy at any given time. I know that I probably would have to sell for less right now because of the market condition. But I'm not selling. In a more centered market, which we will see again soon, when new boats start selling again, clean used boats will be in huge demand because new will be even more out of reach for alot of people.

THEN....no one wil be able to get financed for the 2010's and dealers will be dropping prices on those just to get rid of them. Once the credit markets ease up , then you'll see boat prices rebounding.

unclejessie, are you saying prices increase 10% every year on boats? That seems like a lot.

Chasin7,

Not every year, just from 09 to 2010. That number is just an "in general" number... probably not every boat manuf will do this, but some are. Generally, there is a 2 to 3% price increase per year, but sometimes, that doiesn't even happen. This year, boat manuf. are at such low operating capacity (roughly 1/3), they are trying to recoop some money from the low volume. Owning a new boat in the near future may become a luxury item for a very select group of people... thus driving the cost up.

I way around this is to partner up... I know my friends and I have often considered that option and I think it is great idea. We all may have to if we want to... 1. get a new boat w/o paying $800/mo to own it, and 2. keep our sport alive and growing!

-Uj

As long as the credit market is where it is, any price increase by the manufacturer would be to their own detriment.
If people can't get loans for lower priced boats , then you will only lower the amount who can buy your boats.

I think the credit market is defining boat ownership. If you dont have above 740 on your credit score, you will asked to put a large deposite down... which is basically saying "go away" to many people. I think the boat manuf. know this and are counting on the above 740 customers to cough up the cash.

Why would prices shoot up in 18 mos? I don't see us going from a flooded used market all the way to luxury premiums in the new market regardless of how loose credit. Wouldn't the used dry up before the new ones are at a premium?

I think Jesse is being very optimistic. Boats don't wear out that fast and people have longer memories that you might imagine. I think downward pressure on boat prices are likely to last a lot longer than he thinks. Hopefully companies like Standard will flourish and keep it that way.

Don't forget Axis

I am no expert, but in 18 mo or so, the new boat dealerships will finally be out of stock on 08s and 09 models. Since the boat makers are upping their prices in 2010, the dealerships will then pass it on to us. Used boat sellers won't have to compete with the hugley discounted new boats, thus making their used boats instantly and almost overnight... worth more.

What do I know though... I am an engieer, not an economist!

-Uj

Fair enough. Good time to buy no matter how you slice it.

IMO New boat companies will be doing good to sell you a boat above cost anytime in the next two years.

Are 2010 production numbers likely to be higher than 09?

Jesse, I'm an engineer also. And I don't see home equity getting back to previous levels for a long while. Ergo nothing to borrow against and therefor less demand to force prices up. Once again an engineer not an economist but I remember sumptin about supply and demand driving prices more than MSRP.

If the credit market is defining boat ownership, and boat prices go up, then expect to see many boat makers to go out of business. In the end even if this true it will only last a short period. Simple supply and demand. If the manufactures price themselves out of a reasonable market, then they will open the door for new, or more realistic manufacturers to come in and take advantage of the hole they leave in their wake. Boats are already overpriced. At some point cost vs value will be too far out of balance.

Housing values aren't going to go back, becasue they were unrealistic and the bubble burst, don't expect either to raise much for many many more years.

(Message edited by cjh1669 on June 24, 2009)

Be cautious in believing that the economy is at bottom and will be recovering quickly.

Credit will never be that easy again and equity is gone and may not return for decades. Luxury items will not see that kind of demand again.

exactly, the demand in these items is down and will be for quite a while. Raising the prices will just make it more so. On top all that the energy issues, that we will see again in the near future, put these items at an even lower demand.

As long as production is near demand then prices will rise. They may not rise right back up to the pre crash prices, but they will start to go up as inventory levels are adjusted

Chris,

I can see many more dealerships going out within the next 18 months... And yes, I also agree with what you say about new opportunities. Boat manufcatures have long gouched us price wise... ever since wakebioarding took off. Between 1999, when boat manufactures finally started making legit towers, and 2006, prices were going up and up and up for almost the same boats year after year after year. They did it because they could.

John, I agree 100%. Supply and demand rules. As the number of available new boats on the market drops, and their price goes up, an intellegent compromise is to buy used. This will bring the price of used boats back up.

The wake market that has fueled used boat and new boat sales over the last 10 years isnt going anywhere long term... right now they are sitting on the sidlines deciding what to do, looking for a job etc. Hopefully those w/o jobs will find them in the next 18 months and when they are ready to junmp back in, the available new boat market will be greatly different in 18 months vs. rigth now. My point is the base (people intersted in wakn and boating) will reamin the same, yet the # of boats avail will drop like a rock very soon.

I am referencing all of this to where we are today, which is... it is much smarter to buy new right now vs. used. YOU WILL NOT GET A CHEAPER PRICE than RIGHT NOW... so go buy a boat.. ha ha ha... I want to soo bad, but I finally own mine... and like I said, it aint worth crap rigth now!

-Uj

The easy cheap money for luxury items, wakeboats included, are going to be gone forever. There are and will always be loans available, but a lot of the people with no money down that bought in 07 and 08, will not be able to draw out their house equity or get a 100% loan. The pool of people that want to and can buy will be smaller which will lower demand for a long time.

We will just have to see where general inflation is headed with all the stimulus money that is being printed to see what really happens with price. There maybe some real supply cost pressures in a few years.

If you have the money...agreed with the overall sentiment, now is a good time to buy.

"As the number of available new boats on the market drops, and their price goes up, an intelligent compromise is to buy used"

Jesse, You have no way to know this and neither does anyone else. None of know what the future will bring and if current Mfgs misjudge the recovery or if new Mfgs jump in you then have a glut of new boats not a shortage. Someone out of work now is very unlikely to buy a luxury item simply because he just got a job because who would finance him? I would guess that boat prices are every bit as likely to down as up.

'The wake market that has fueled used boat and new boat sales over the last 10 years isn't going anywhere long term... '

Why do you assume this is fact? High fuel prices or lakes banning ballast could put a big dent in demand for existing boats. The rest of the industry could decide to push the sport towards cable instead of blinged(blunged?) boats. I think people will remember this recession for a longer time than you might imagine. Who knows, saving money and living within your means might become cool again or it could get forced on us by new banking regs.

(Message edited by roverjohn on June 25, 2009)

"Who knows, saving money and living within your means might become cool again"

Dear god let's hope so. This country depends on it.

Hey John,

In many, many ways I hope you are right about how this economy "may" change america... but in the end I don't think that will happen in near (18 mo to 5 year) future.

I wasnt "assuming" anything... I am just stating my opinion.

I think everything you state about lowering the demands for boats will have an affect, but I don't see it happening overnight.

My point was (and is), the landscape of new boat ownership will be much differemt in 18 mo. when there are no more HUGE discounts on new boats due to build up inventory on delaership lots...

NADA GUIDES......Ok, being a dealer there are 2 sources for values we use, NADA and ABOS Marine Blue Book. I go to SEVERAL "Dealer Only" auctions each month and for example, the Adesa auction in Ocala, Fl....boats brought strong money. There were almost 190 there, some NICE one's too and most were 5% over NADA trade-in which is really close to NADA Low Retail. It has been this way for the last 3 months. At best, the deals are 85-90% of trade-in value. I've been doing this a while and as so many "New Dealers" are going out of business, there are alot of them going over to "Used Only dealerships" and more people are buying used than new right now as financing is easier on a decent priced used boat. Go try to finance an 09 right now and they will pull out the NADA book and base their qualification on the value in the book. If you can buy for low retail, and only add say the trailer and it is a nice boat. That is a deal, even in this market. I'll say that boats have been so high the last few months I can't get anything bought at auctions. I also buy atv's (10-15 a month) and same thing there...they are bringing way over book.