The current state of affairs has led me to ask the question: Why do boats depreciate so much?

We all know they are not a wise investment and they depreciate quite rapidly, but WHY? What are your observations, theories, and/or experiences?

I read somewhere that the average depreciation of almost all boats is 40% off MSRP the day it's bought, and 7% each year there after. This formula unfortunately seems to work for a lot of boats.

some of the problem might be the current cost of new boats. look back 10 years ago and see what boats sold for. i'm not bashing fountain , but one example sticks out in my mind. powerboat tested, i believe , a 29 fever with a 575hp that stickered for about 160K even if you could get 30K off thats still 130K!!! for a boat with a single? and no trailer!!! markets flooded with boats and its supply and demand working to drive values down.

i'm in autos and it's the same here too. moral of the story, buy used

I'm on my third boat in three years and I've made money on the first two. I buy used and let somenone else eat the depreciation. I wait for the couple getting divorced, declaring bankrupcy, etc. Then put them back up at "market" value. I take the attitude that if they sell great. I'll then try to do it again. If they don't then so be it. I got a good boat at a good price. So far so good.

1995 Rinker 232
1998 29' Fountain
1999 Baja 302

Tim

tim thats probably safer than the stock market right now

Friend has an '84 Hatteras that he bought at market value in '89 for $550,000.00 He just recently sold it for $520,000.00

My Sea Ray cost me $268,000.00 brand new in '95. Was looking to go larger recently and was trying to get a good feel for what I could get for mine. Found an interested buyer who offered $250,000.00 Did not end up selling her (no place to dock the larger boat I wanted without having to drive too far to a larger marina..)

My Formula was bought for a steal brand new in '91 for $78,000.00 When I had it parked at the car lot for a few days before the Lake Cumberland trip, there were scads of calls and people stopping by. Folks who knew the boat called me personally and I was offered as much as $60k for it.

Point is, boats have come up in price so much, that if you have a truly quality boat and keep it immaculate, your price hit is not that bad so long as you bought it right in the first place and enough time has elapsed.

'Course, I got plenty of stories about all the boats I paid too much for and had to give away also....

I think the 40% and 7%/year is a little off. That would be 47% the first year and 54% the second and 61% the third year.

I have seen more like 20% at purchase and 10%/year which is 30% the first year and 40% and 50% the next 2nd and 3rd years.

It's still 50% by the 3-4 year. ouch!

Cobra Marty,

I agree more with your numbers. I also think after the first three or four years. The value seems to level off quite a bit (depending on the make, model and condition like Mcollinstn said).

Tim

Cobra

I acturally meant 47% after year 2. May be aggressive though. I just read it somewhere. It does seem like every boat I have tried to buy has depreciated 40% and everyone I have tried to sell has gone down 60%.

uh.....all good info, but still looking for the WHY they seem to depreciate poorly. Saber28 gave one thought...