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Big-Buyers Still Fence-Sitting

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Old 06-09-2010, 09:49 AM
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I would say the ability to sell a boat is the hardest point a buyer makes in buyin a new one. Even at 1/3 the cost of new it's going to be tough to sell.
My buddy just sold the 1st OSO boat and it took 8 months despite being the lowest priced 07 out there. Lots of tire kickers with no money and denied financing. In the end the boat went to a cash buyer from out of state.......
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Old 06-09-2010, 09:53 AM
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Lots of people buying boats in TX. The problem is that people are allowing communist and unions to destroy their states. Until that changes, the boating industry and the U.S. as a world power will continue to deteriorate.
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Old 06-09-2010, 10:11 AM
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My buddy just sold the 1st OSO boat and it took 8 months despite being the lowest priced 07 out there. Lots of tire kickers with no money and denied financing. In the end the boat went to a cash buyer from out of state.......
I think you mean the Top Gun correct, not the Gladiator?
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Old 06-09-2010, 10:24 AM
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I think you mean the Top Gun correct, not the Gladiator?
You are correct.....the 07 38 TG w/525's.
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Old 06-09-2010, 10:38 AM
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The "distressed" new inventory from manufacturers with a big dealer network (Donzi, Fountain) has dried up somwhat but I think the next wave of used boats are around the corner. The guy with the 20 year note he signed in 2005 still has 15 YEARS worth of payments on a now 5 year old boat! Now the boat is worth about 1/4 of what he paid for it and is getting tired.......04-06 a lot of performance boats sold, more than any period of time in history I would guess.
The problem is they owe a lot more than the boat is worth unless they are ready to write a check and cut their loss they can't get out.

Let's say they bought a 42 fountain lightning with 525s and financed 235k in 05. The still owe 199k on the boat today and what is it worth, 125 to 150?

I think new boat sales will continue to struggle because the market for used boats is so weak, people can't move up.
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Old 06-09-2010, 10:45 AM
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I thought I saw recent articles about Mystic trying to keep up with orders using 2 molds, cigarette sales pushes, and sunsation breaking sales records with the 36. Since loans are tight I thought it was only the heavy hitters buying boats.

Your are correct, Phragle, at least in part. Mystic did add a second set of molds to keep up with current demand. But here's the thing about tooling: It's expensive. You need to run a few boats through it (and I'm not sure what the exact number would be—lots of variables) before you even recover your investment.

So custom builders want/need to have custom orders lined up and they're not comfortable unless they do. Skater and Mystic have boats in production. But the line, so to speak, to order new ones is shorter and more difficult to establish. Cosker and Hledin both said they have legitimate customers (i.e. customers who can afford their products) interested. Converting them to buyers, however, has become more difficult.

Why are people who can afford those products being so careful? Not being an economist or a psychologist (but in dire need of both), I'd have to say: fear. Today's economy has everyone I know, even the wealthiest people I know, afraid to spend.

The articles you referred to on Sunsation and Cigarette were mine. Sunsation did do well with the 36, enough so that they had to bring back half of their workforce. Cigarette did see a domestic sales increase, which was notable because most of their business in the last couple of years had been coming from overseas. I am happy to report—and always looking for—good news, and those two items qualify. Little bits of good news in a sea of news that's distressing are refreshing and worth reporting.

However, it's important to keep those news items in context. Nowhere in the those stories was it stated or implied that an economic turnabout for the marine industry was at hand. (Hope that doesn't come off as defensive, just want to be really clear.) I wish. We all wish, right? But that just isn't reality.
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Old 06-09-2010, 11:12 AM
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Great thread.

Regular guys cant get funding, or dont want to meet the new terms it requires.The down to get into a new ride has gone up and banks want their pound of flesh in terms of % earlier and used boats depreciate like hand grenades.

Regular working rich guys with great incomes and good savings simply - cant get a handle on how much they really have to spend on anything right now- because their net worth is a yo yo.

In part I think "wealthy" people are holding on because their wealth has not stabilized, and is still in flux. If we'd have had two more months of upswing, we'd likely be in a spend cycle but the markets retreated dramatically in the last 30 days bringing the fear of the double dip in to play.

Example - my personal portfolio has undergone a 90K swing in 30 days! That swing would be down unfortunately. Has that changed my out look on more, newer and bigger toys - you bet.

(good thing I went out 4 years ago and bought a bunch of gold)

Id bet I'm no different than most middle age boat buyers in this regard.(aside from the bet on gold) Sure I could do it- but Id be putting myself at risk.

There are more guys that have their take home money from good careers that have "play" money from stocks and options than"inheritance guys". With "stock and investment money" you are constrained to the market reality- and the market blows

You cant get it from your house either- that avenue is markedly squeezed as well.

The "inheritance guys" are great for a new rig every now and then, but cant sustain our industry.

The industry needs regular guys buying regular boats, on a regular basis or it will continue to wither.


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Old 06-09-2010, 02:27 PM
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The problem is they owe a lot more than the boat is worth unless they are ready to write a check and cut their loss they can't get out.

Let's say they bought a 42 fountain lightning with 525s and financed 235k in 05. The still owe 199k on the boat today and what is it worth, 125 to 150?

I think new boat sales will continue to struggle because the market for used boats is so weak, people can't move up.

Combine this with the fact Fountain and Formula promoted adjustable rate financing, like 2.9% for 24 months then it jumped to 6.9 for the next 18 years. Fountain was advertising a 35 Executioner for $999 a month. So right about the time you are tired of the boat, the payments jump!
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Old 06-09-2010, 02:32 PM
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IMO big buyers are smart to hold off. The "Bush tax cuts" are coming off of the books, income tax and capital gains taxes are going to rise in January unless someone extends the "cuts" (which isn't likely). That coupled with the lack of jobs and sputtering economy suggest a weak market at best. I wouldn't want to be throwing down $300K on a boat right now, that's for sure...
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