Shogren on Used Boats: "Be prepared for reality."
03-23-2011, 10:35 AM
#21
Gold Member
People can still get financed for lots of things, just like we did in the 80's and part of the 90's. Real paperwork, real downpayments, SOS.
Last decade should be written off as a painful anomaly.
The only thing different now is that dealers need to stay in business, and try to make money. Between the dealers and boat builders, they've figured out how to do that. Sell far fewer new boats for more coin, less financing risk. Lowball the crap out of trade ins, and make some good coin.
Long term, dealers will make the money by getting repeat business by giving excellent customer service and being mostly honest with them, just like most did in the old days. Those that are out to simply take advantage of the current situation, will probably not last.
At least this year new boats are getting ordered, new boats are getting built, and several boat builders in the recreational market have come out with some pretty innovative new models. There's not much anyone can do for existing boat owners, so we move on.
Last decade should be written off as a painful anomaly.
The only thing different now is that dealers need to stay in business, and try to make money. Between the dealers and boat builders, they've figured out how to do that. Sell far fewer new boats for more coin, less financing risk. Lowball the crap out of trade ins, and make some good coin.
Long term, dealers will make the money by getting repeat business by giving excellent customer service and being mostly honest with them, just like most did in the old days. Those that are out to simply take advantage of the current situation, will probably not last.
At least this year new boats are getting ordered, new boats are getting built, and several boat builders in the recreational market have come out with some pretty innovative new models. There's not much anyone can do for existing boat owners, so we move on.
03-23-2011, 10:39 AM
#22
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I agree that some boats are worth restoring if your going to keep it for a while. You can plunk down 485 for a new42 Fountain with 700's or buy a 2000-05 with big power for around 150 and freshen the $hit out of it and your money ahead.
OK had a big cup of coffee today...Ill shut up now.
OK had a big cup of coffee today...Ill shut up now.
03-23-2011, 10:50 AM
#23
Banned
03-23-2011, 10:55 AM
#24
Registered
Thank you
Thank you for the comment RH.
There are alot of interesting and accurate opinions on here which I respect. It is definitely a buyers market and the bigger the budget, the more you will get for your dollar today. We do not use NADA but rather market trends. If we used NADA all our boats would have a low wholesale ask price which makes NADA good for fire kindling. The only boats that are in our inventory for a long period of time are a few brokerage boats where owners won't budge or big motor boats (Back4More is correct). Anything up to Merc 700 sells quick or give it away with big motors, just seems to be the trend.
Buyers, it's time to buy, the inventory ops are shrinking out there. Don't let your dream get away if you can afford it.
Regards,
Scott Shogren
www.teamshogren.com
There are alot of interesting and accurate opinions on here which I respect. It is definitely a buyers market and the bigger the budget, the more you will get for your dollar today. We do not use NADA but rather market trends. If we used NADA all our boats would have a low wholesale ask price which makes NADA good for fire kindling. The only boats that are in our inventory for a long period of time are a few brokerage boats where owners won't budge or big motor boats (Back4More is correct). Anything up to Merc 700 sells quick or give it away with big motors, just seems to be the trend.
Buyers, it's time to buy, the inventory ops are shrinking out there. Don't let your dream get away if you can afford it.
Regards,
Scott Shogren
www.teamshogren.com
03-23-2011, 10:57 AM
#25
Registered
Yep
Correcto Mundo Mark. Price to sell or pay carry & storage to sit and depreciate. The earlier seems to be the better idea today.
www.TeamShogren.Com
www.TeamShogren.Com
"With that said Scott probably needs to take some of his advice I check his website regularly and some of that stuff has been on there for years"
Those are brokerage boats...And yes the owners need to come to reality if they want them sold.
He won't let his inventory turn stagnant. Thats why you see ebay auctions from time to time.
Those are brokerage boats...And yes the owners need to come to reality if they want them sold.
He won't let his inventory turn stagnant. Thats why you see ebay auctions from time to time.
03-23-2011, 11:47 AM
#26
Registered
Buyers, it's time to buy, the inventory ops are shrinking out there. Don't let your dream get away if you can afford it.
Regards,
Scott Shogren
www.teamshogren.com
Regards,
Scott Shogren
www.teamshogren.com
Wife and I decided it was time for an upgrade thinking the earliest it could happen would be not for another 2 years. Took a trip down to shogrens this fall to spin some props, and knock on some hulls, to figure out if we'd even want a fountain.
Yup, you guessed it, fell in love with one, and the crew at shogrens made it possiable. 2 years before we even thought it could MAYBE happen. A+, class act operation. Thanks again, Greg, Scott, and crew ......Now I cant wait to come pick it up
by the way Scott thanksfor letting my son terrorize your office.
03-23-2011, 12:35 PM
#27
Registered
Good read.
There are a lot of sellers out there that are upside down and think if they hold out long enough, someone will give them their number as they pay down their note. In reality, what happens is the boats are depreciating faster than the notes are being paid down and the gap only widens with time.
The reality is the market isn't coming back anytime soon, especially with gas prices going through the roof and the economy very much struggling to make a comeback.
There are also plenty of sellers that paid a lot for their boats with no note and want out, but aren't willing to accept the reality of what their boats are worth today compared to what they paid for it back in the day. Again they feel they'd rather wait for their number, meanwhile the depreciation continues to take it's toll and the opportunity cost on that money adds up. Over time they are usually better off selling for market value now so they can do something with the money today, rather than gamble and typically accept a lot less in the future on their deprecating asset. Likewise the money accepted in the depreciated market now can be reinvested in the same depreciated market, so seller might not be lossing nearly as much as they may think... In fact they might be making out in the long run depending on what they do with this money.
Case in point, I offered close to 20% over NADA retail on a (very nice) boat this week which the owner has had FS for several years and didn't even use it at all last season. Despite what Scott says about NADA values in this article... They declined the offer and felt they'd rather wait for a better number or just possibly use the boat again in the future. They have dropped the high asking price over the years to still reflect a premium for the time, but they still continue to sit on the boat and watch the boat depreciate. The reality is if they just sold it for a decent offer a little above market value years ago when they first decided to sell it, they would be far, far ahead today. Yet, the cycle will probably continue...
Another observation, many sellers are reluctant to sell at todays lower values, but the savvy ones wanting to move up are in a position to sell low, but also buy/upgrade low. Overall not a bad place to be.
I will say this, having cash in todays market is king, but there are an amazing number of sellers out there that for whatever reason dont want to 'give away' their boats, and I cant say I can blame them, but if they want them to move, the market is what it is and having a little less cash today might be better than sitting on the boat in the long run for the above reasons.
There are a lot of sellers out there that are upside down and think if they hold out long enough, someone will give them their number as they pay down their note. In reality, what happens is the boats are depreciating faster than the notes are being paid down and the gap only widens with time.
The reality is the market isn't coming back anytime soon, especially with gas prices going through the roof and the economy very much struggling to make a comeback.
There are also plenty of sellers that paid a lot for their boats with no note and want out, but aren't willing to accept the reality of what their boats are worth today compared to what they paid for it back in the day. Again they feel they'd rather wait for their number, meanwhile the depreciation continues to take it's toll and the opportunity cost on that money adds up. Over time they are usually better off selling for market value now so they can do something with the money today, rather than gamble and typically accept a lot less in the future on their deprecating asset. Likewise the money accepted in the depreciated market now can be reinvested in the same depreciated market, so seller might not be lossing nearly as much as they may think... In fact they might be making out in the long run depending on what they do with this money.
Case in point, I offered close to 20% over NADA retail on a (very nice) boat this week which the owner has had FS for several years and didn't even use it at all last season. Despite what Scott says about NADA values in this article... They declined the offer and felt they'd rather wait for a better number or just possibly use the boat again in the future. They have dropped the high asking price over the years to still reflect a premium for the time, but they still continue to sit on the boat and watch the boat depreciate. The reality is if they just sold it for a decent offer a little above market value years ago when they first decided to sell it, they would be far, far ahead today. Yet, the cycle will probably continue...
Another observation, many sellers are reluctant to sell at todays lower values, but the savvy ones wanting to move up are in a position to sell low, but also buy/upgrade low. Overall not a bad place to be.
I will say this, having cash in todays market is king, but there are an amazing number of sellers out there that for whatever reason dont want to 'give away' their boats, and I cant say I can blame them, but if they want them to move, the market is what it is and having a little less cash today might be better than sitting on the boat in the long run for the above reasons.
03-23-2011, 12:51 PM
#28
Good read.
There are a lot of sellers out there that are upside down and think if they hold out long enough, someone will give them their number as they pay down their note. In reality, what happens is the boats are depreciating faster than the notes are being paid down and the gap only widens with time.
The reality is the market isn't coming back anytime soon, especially with gas prices going through the roof and the economy very much struggling to make a comeback.
There are also plenty of sellers that paid a lot for their boats with no note and want out, but aren't willing to accept the reality of what their boats are worth today compared to what they paid for it back in the day. Again they feel they'd rather wait for their number, meanwhile the depreciation continues to take it's toll and the opportunity cost on that money adds up. Over time they are usually better off selling for market value now so they can do something with the money today, rather than gamble and typically accept a lot less in the future on their deprecating asset. Likewise the money accepted in the depreciated market now can be reinvested in the same depreciated market, so seller might not be lossing nearly as much as they may think... In fact they might be making out in the long run depending on what they do with this money.
Case in point, I offered close to 20% over NADA retail on a (very nice) boat this week which the owner has had FS for several years and didn't even use it at all last season. Despite what Scott says about NADA values in this article... They declined the offer and felt they'd rather wait for a better number or just possibly use the boat again in the future. They have dropped the high asking price over the years to still reflect a premium for the time, but they still continue to sit on the boat and watch the boat depreciate. The reality is if they just sold it for a decent offer a little above market value years ago when they first decided to sell it, they would be far, far ahead today. Yet, the cycle will probably continue...
Another observation, many sellers are reluctant to sell at todays lower values, but the savvy ones wanting to move up are in a position to sell low, but also buy/upgrade low. Overall not a bad place to be.
I will say this, having cash in todays market is king, but there are an amazing number of sellers out there that for whatever reason dont want to 'give away' their boats, and I cant say I can blame them, but if they want them to move, the market is what it is and having a little less cash today might be better than sitting on the boat in the long run for the above reasons.
There are a lot of sellers out there that are upside down and think if they hold out long enough, someone will give them their number as they pay down their note. In reality, what happens is the boats are depreciating faster than the notes are being paid down and the gap only widens with time.
The reality is the market isn't coming back anytime soon, especially with gas prices going through the roof and the economy very much struggling to make a comeback.
There are also plenty of sellers that paid a lot for their boats with no note and want out, but aren't willing to accept the reality of what their boats are worth today compared to what they paid for it back in the day. Again they feel they'd rather wait for their number, meanwhile the depreciation continues to take it's toll and the opportunity cost on that money adds up. Over time they are usually better off selling for market value now so they can do something with the money today, rather than gamble and typically accept a lot less in the future on their deprecating asset. Likewise the money accepted in the depreciated market now can be reinvested in the same depreciated market, so seller might not be lossing nearly as much as they may think... In fact they might be making out in the long run depending on what they do with this money.
Case in point, I offered close to 20% over NADA retail on a (very nice) boat this week which the owner has had FS for several years and didn't even use it at all last season. Despite what Scott says about NADA values in this article... They declined the offer and felt they'd rather wait for a better number or just possibly use the boat again in the future. They have dropped the high asking price over the years to still reflect a premium for the time, but they still continue to sit on the boat and watch the boat depreciate. The reality is if they just sold it for a decent offer a little above market value years ago when they first decided to sell it, they would be far, far ahead today. Yet, the cycle will probably continue...
Another observation, many sellers are reluctant to sell at todays lower values, but the savvy ones wanting to move up are in a position to sell low, but also buy/upgrade low. Overall not a bad place to be.
I will say this, having cash in todays market is king, but there are an amazing number of sellers out there that for whatever reason dont want to 'give away' their boats, and I cant say I can blame them, but if they want them to move, the market is what it is and having a little less cash today might be better than sitting on the boat in the long run for the above reasons.
03-23-2011, 01:22 PM
#29
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Buyers, it's time to buy, the inventory ops are shrinking out there. Don't let your dream get away if you can afford it.
Regards,
Scott Shogren
www.teamshogren.com
Regards,
Scott Shogren
www.teamshogren.com
I, like Scott, conduct a luxury item business (custom pool construction). There' no differences in the comparisons here on the performance boats or any boat and a custom pool builder or a motorhome dealership. Except that I didn't have to pay for a bunch of inventory losing value annually. I construct on a per contract basis.
I've told buyers exactly this same thing I quoted Scott on since the end of 2008. My costs on building materials (rebar, concrete, bullnosed brick and pool tiles, etc...) has raised several times since then and my margin since then has tanked.
I looked for almost a year before offering a contract on a performance sport cruiser. It wasn't truly the most favored boat I wanted but I had to be practical, a cash purchase was a must. If I couldn't get a 700+ score financed on a new pool contruction loan at least a half dozen times last year why would it be different on a boat. And, equally, I was totally unwilling to take on any note for the boat purchase.
Pool buyers also know that the pool loses value bigtime and only helps for a quicker resell when they relocate.
Once we business owners and our customer base realize these things it's somewhat easier to close our deals.
See ya,
Kelly
03-23-2011, 02:01 PM
#30
Banned
Very well put.
I, like Scott, conduct a luxury item business (custom pool construction). There' no differences in the comparisons here on the performance boats or any boat and a custom pool builder or a motorhome dealership. Except that I didn't have to pay for a bunch of inventory losing value annually. I construct on a per contract basis.
I've told buyers exactly this same thing I quoted Scott on since the end of 2008. My costs on building materials (rebar, concrete, bullnosed brick and pool tiles, etc...) has raised several times since then and my margin since then has tanked.
I looked for almost a year before offering a contract on a performance sport cruiser. It wasn't truly the most favored boat I wanted but I had to be practical, a cash purchase was a must. If I couldn't get a 700+ score financed on a new pool contruction loan at least a half dozen times last year why would it be different on a boat. And, equally, I was totally unwilling to take on any note for the boat purchase.
Selling pools has been the same, target the higher end neighborhoods, cut your markup to the bone, and perform your services for the love of the sport and not for addtional profitability. All business owners know pretty much what it takes to keep the company in the game without risking going under.
Pool buyers also know that the pool loses value bigtime and only helps for a quicker resell when they relocate.
Once we business owners and our customer base realize these things it's somewhat easier to close our deals.
See ya,
Kelly
I, like Scott, conduct a luxury item business (custom pool construction). There' no differences in the comparisons here on the performance boats or any boat and a custom pool builder or a motorhome dealership. Except that I didn't have to pay for a bunch of inventory losing value annually. I construct on a per contract basis.
I've told buyers exactly this same thing I quoted Scott on since the end of 2008. My costs on building materials (rebar, concrete, bullnosed brick and pool tiles, etc...) has raised several times since then and my margin since then has tanked.
I looked for almost a year before offering a contract on a performance sport cruiser. It wasn't truly the most favored boat I wanted but I had to be practical, a cash purchase was a must. If I couldn't get a 700+ score financed on a new pool contruction loan at least a half dozen times last year why would it be different on a boat. And, equally, I was totally unwilling to take on any note for the boat purchase.
Selling pools has been the same, target the higher end neighborhoods, cut your markup to the bone, and perform your services for the love of the sport and not for addtional profitability. All business owners know pretty much what it takes to keep the company in the game without risking going under.
Pool buyers also know that the pool loses value bigtime and only helps for a quicker resell when they relocate.
Once we business owners and our customer base realize these things it's somewhat easier to close our deals.
See ya,
Kelly
try telling that one to the Bank when the mortgage payment is due ,or the gal at the cash register when you got 6 bags of groceries .....
