| In
Part II, we made the recommendation that an used boat
offers excellent value and good prospects for reliability.
But how old of a boat? And how do you go about completing
a deal?
Part
I
- Outboard
-vs- Stern Drive
- Closed
-vs- Raw Water Cooling Systems
- Brands
Part
II
-Style
- Size-vs-Quality
- Luxury-vs-Utility
- Your
Situation
- Where
You Use Your Boat
Part
III
- By
Owner or Dealer
- Appraisals
- Financing
- Warranties
- Deposits
- Titles
- Trailers |
Our experience indicates
that boats in the 2-4 year old range usually offer
the best prospects. Of course, boats that are only
one year old are hard to find since not many people
sell at that age. Secondly, you have to ask yourself
why would someone get rid of a boat that is only a
year old? The reason could be financial distress,
but you also have to wonder if they're getting rid
of it because it is a turkey.
This is a common problem
with cars, and one of the primary reasons why the owner
of a year old car decides to get rid of it-- usually because
it has had a train of problems that just wouldn't quit,
so he decides to dump it. I should know, because I'm the
proud owner of just such a vehicle.
Therefore, my suggestion
is to look in the two to four year old range, particularly
since prices will drop dramatically at this age. Whereas
the seller of a year old boat is still thinking about
the high balance on his loan and may be trying to recover
that amount when the boat is not really worth that.
By Owner or Dealer
The better deals are to be found through direct owner
sales. Yes, it may be easier to buy through a dealer because
they will handle everything, but you are going to pay
for that service in terms of higher prices and probably
higher financing charges.
Making a direct purchase
from an owner is usually a simple and reasonably painless
process if you follow these steps:
Appraisals
As much as I dislike used boat price guides, the fact
is that these books usually determine the amount a lender
will finance, so you'd best check the book value first.
Rest assured that these books do no always accurately
reflect the actual selling prices of boats. The way to
get a good handle on prices is to clip ads and search
the Internet. Make a list all similar boats you can find,
noting their power and other options, plus the asking
price. I usually do this on a legal pad. Then I deduct
10% to 15% of the asking price to get an idea of what
I think it will really sell for. To calculate an average
price, be sure to throw out prices that are unusually
high or low, as these will skew the average.
For a boat in the $10k
to $20K range, the deduction amount is 10%. For boats
over $30k the actual selling will be closer to 15% less,
so use that amount. For boats under $5K the amount will
be around 5%. This is based on the fact that the lower
the amount, the more people tend to set the price at what
they actually intend to sell for. The higher the price,
the bigger their dreams.
Financing Before
boat shopping, it's best to get your line of credit set
up first. Know what your lender is going to limit you
to in advance. When dealing with private sellers, it's
best to streamline the process as much as possible.
When making a purchase of over $10K, we recommend that
you create a purchase agreement. A standardized form is
not necessary, You type one up yourself, or even
hand write one. It's every bit as legal as a printed version.
What should it include? All the things that you agree
upon with the seller, including the price, any conditions
of sale, and most importantly, the date on which the sale
must be closed by. If you're going to have the boat surveyed
-- and you should-- then that should be included too,
as "Subject to survey".
Will the sale be "as
is" or does the seller agree to fix anything that
is wrong? Include this also.
Warranties
Check on whether
there is a warranty and whether it is transferable. Get
a copy from the seller and read it. If the boat is being
brokered or sold by a Dealer, DO NOT TAKE THE DEALER'S
WORD ABOUT WARRANTIES. Read it yourself, as dull as that
may be.
Deposits
The owner has a right to
ask for a cash deposit at the time you sign a purchase
agreement.10% is customary from dealers and brokers, but
direct sellers usually ask for less. Include the deposit
amount in the sales agreement, and the fact that it will
be refunded should serious problems crop up from the survey.
Titles
You should never buy a boat that doesn't have a title.
NEVER. If the boat doesn't have one, look for another
boat. Look at the title before you make a cash deposit.
In most states you can verify the title though the appropriate
titling agency with just a phone call, so be sure to record
the title number and owner name and address. You want
to be on the lookout for things like multiple owners,
such as husband and wife. It's a good idea to check on
whether the seller is in the middle of a divorce and that
the spouse will sign off on the title. Sometimes
there is a property dispute and you don't want to get
caught up in that.
Trailers
The same applies here. These are titled and licensed vehicles
so you will want to make sure that all is in order with
its title.
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