The Used Boat Market: Crazier Than the Illicit Drug Market
Buying a used boat today is like buying large quantities of cocaine online, it’s dangerous and full of unknowns. And how do you pay the person? Cash? Bank check? Bitcoin? I’m not sure, I don’t buy cocaine online, but for boats some of the same hurdles exist. The worst part of the used boat market is the prices, they are all over the map. In this article I want to cover a few points about trying to price a used boat, it is very challenging. In order to get a fair price, there are a few key things to consider and the biggest is the market itself, as in what is this brand and model garnering on the market now? What condition is the boat in and what is the engine worth? These are just a few points to consider, there are many more technical things and less technical things like sentimental value, which boats seem to have a lot of.
One reason our Classified Classics section is so popular is that we try to make fun of used boat ads, but also try to include some useful information, “try” to anyway. One thing that comes up is the price, you see some prices that are shocking. Some of the boats are really old, obviously need a ton of work and the engine usually looks like it is ready for the scrap yard. And, when someone says their 30 year old boat, that has been kept outside for it’s whole life, is solid, you have a reason to be skeptical. I would say, once you establish a few of the models you are interested in, look into how they are built and see what other owners experienced as to the quality. Most boats built over 20 years ago had wood in them, from the transom to the stringers, so you can be pretty confident that many of those boats are going to need some work to those areas. If you aren’t doing the work yourself, it can be very expensive to repair.
Why are the prices so all over the map? A few reasons. The first being that the boat market is unique in that there are so many builders. There are major manufacturers with multiple brands and there are small builders building a small number of hulls a year, which means there are thousands of boats being built every year by many brands. This has been going on forever, so you get literally hundreds of boat brands, many of which are gone now. It’s hard to tell the quality ones from the bad ones sometimes. Because of this, there is less quantifiable data on used boat prices compared to a controlled market like cars. For cars, you can have a clear idea of what a specific car is worth based on year, mileage and condition. In fact, there are several industry reports on these prices for wholesale and retail updated continuously. Boats don’t have the same measures and it is harder to identify “mileage” and condition in many cases.
Donzi's are popular and they have brand cache but this is 23 years old, had the hull and deck separated for repair and has an old carb engine, Alpha drive. What's it worth?
The second reason is new boat prices are so high that it drives up the prices on good used boats. Another thing is sentimental value. Boat owners love their boats and we are all guilty of putting extra value on our own boats because we took extra care of it, it was our first boat, we robbed a liquor store to rebuild the engine, stuff like that unfortunately creeps into the asking price. The used car market is realistic, the used boat sellers are often dreaming.
This is a free Starflight. Call me when you get it fixed and running and tell me how free it is. Don't forget your time spent.
As an example, a very popular performance boat brand, Checkmate, has many boats from the 90s and 2000s for sale. They built quite a few boats, everyone knows the name, they are popular. Recently, when researching some Classified Classics, I came across a few older ones that were about $500. They were definite projects, two 21 Starflites and 1 Enchanter. All were decent boats in their day, pretty fast, nice looking. Two had the non running engines included. In these cases, as the ads pointed out, you were buying the trailer, the boat was free. They all needed lots of work, including the transom, stringers floor, and possibly the core. These are realistic, they aren’t worth much but could be restored if you’re savvy. Now, you can find the same models in cosmetically better shape with running engines for anywhere from $3,500 to $8,500, I found several. There is actually a good chance, the $8,500 one needs almost the same amount of work. The gelcoat can look good, and the interior decent but your biggest problem will be the structural stuff, like the transom, core and stringers, not how shiny the gel is. My point is, if it is solid, the $5,000 boat could be a steal and last another decade without issues. But, on the other hand, it may only be slightly better than the free one underneath the surface. If the brand has some cache or you just love the model, then some of the “free” ones are worth restoring.
The engine is another wildcard. This will be a separate article at some point and it is a tough one. For engines older than 15 years that aren’t special, it is very difficult to put a value on them. For the buyer, it is a huge risk, a 15+ year old engine is old technology, a pig on gas and essentially is a ticking time bomb. As time goes on, maintenance adds up. Depending on how many hours you put on it, it may be worth buying a newer engine, financing a brand new one or buying a sailboat. Either way, have the engine tested before you buy it and budget for repairs going forward. The value of a generic 150 to 250 HP outboard that is over 10 years old is very low. Try and trade it in on a new engine and you’ll find out pretty quick what it is worth, not much. Same for a sterndrive, an older high hour small block or big block MerCruiser is really not worth much.
Some boats are already restored but that can be scarier than ones that aren't. Was it done properly?
What is the takeaway? Don’t buy cocaine online. When you buy a used boat, exercise caution. When you find the boat you want but it is over 15 years old, be very aware that no matter how shiny it is, it could be a “project.” Price the trailer, the engine and the boat separately and see if the value seems there. Know what it would cost you to repair the engine and the boat in the worst case scenario. And finally, only as a reference, compare a used car of the same vintage and condition, not because they are comparable but just to bring context. A late 90s Camaro, Mustang or even BMW 3 series that needs some work is worth about $2,000 to $4,000. Why would a small sport boat of the same vintage be worth more?