By: Richard Crowder
Whether you are considering purchasing a used dinghy, aluminum pontoon, utility, fishing, or multi-purpose boat, or a fibreglass runabout, cruiser, or yacht, or even highly specialized boats such as a professional fishing or watersports boat, there are several common factors to consider when making your decision.
Most buyers have a budget in mind when they go shopping. This is an important consideration as your budget range will set the parameters for what you’re comfortable with. A boat is a highly discretionary purchase and it is done for pleasure, so to remain a pleasurable experience it cannot be felt as a financial burden. Establish your budget before you go shopping and ensure you can manage it over a period of time.
Part of your budget is the initial capital outlay (the purchase price plus HST – Harmonized Sales Tax which differs from province to province) and the annualized costs of ownership. These include financing costs, depreciation, insurance, storage, maintenance, and provisioning. Provisioning are those expenses that provide the personal enjoyment of the boat . These include fuel, food, beverages, clothing, or some of the “toys” like fishing or diving equipment, inflatable tubes, waterskis, wakeboards, entertainment accessories, transient overnight dockage, and so on.
Once you have your budget settled and you’ve decided on the style of boat you’re after, the next step is to establish your perception of value by focusing on what will give you the most enjoyment for the money spent.
The price of a used boat is very much a reflection of the replacement price of that same boat. Like all things with an engine, boats depreciate in value over time. Different makes and models depreciate at different rates in different market areas. To broadly generalize, a new boat depreciates fifteen to twenty-five percent in its first year and then lesser amounts each subsequent year until around the sixth to eighth year, at which point it is worth approximately half its replacement cost.
Boats will generally continue to depreciate at reducing annual rates until about ten to twelve years old. Once they’ve reached that age, condition, maintenance, build quality, and localized model desirability start to reflect on market valuation more than continuing depreciation. Localized market desirability in terms of brand and model is a big factor in resale valuation, not to mention the likely timeline for a purchase. Keep this in mind when buying any new or used boat as knowing your local market will be key to sourcing out your preferred models.
Except in unusual circumstances, there are no warranties on used boats. The original manufacturer’s structural warranty covers the hull and deck, floors, and bulkheads for generally five to ten years and in some cases even a lifetime for the original purchaser. There will also be upholstery and seating warranties for perhaps one to five years. Plus, if it’s a fibreglass boat, usually a hull bottom blister or osmosis warranty of five to ten years. Sometimes portions of these warranties are transferable to a second owner for the balance of the original term, but generally not. Be sure to confirm warranty status before signing on the dotted line.
Motor warranties are usually direct from the manufacturer and cover one to five years All other fixtures and appurtenances the manufacturer has installed generally come from outside suppliers and have their own separate warranties from one to two years. Few, if any, are transferable to a second owner.
So, let’s put this in perspective. You could buy a one to five year old boat and possibly obtain the balance of a new boat structural and engine warranty. But you need to confirm with both the dealer and the manufacturer, be wary of conflicting information between the two.. If a warranty is available and it’s important to you (and it should be), make sure you include a clause to cover this in the purchase contract. Make sure the information between the manufacturer and the dealer matches.
As mentioned earlier, maintenance and condition are critical to the value of a boat as it ages, and this becomes especially important at the ten to twelve year mark. Boats live in one of the worst environments – water and moisture and widely fluctuating temperatures. This environment is magnified in our Canadian climate where water and moisture can freeze in the winter. Upon freezing it expands, and if trapped where its expanding, it’ll break whatever is trapping it. Add salt to this scenario, like a prospective boat that has seen salt water use, and the damage can be magnified.
Confirm that moisture has not been trapped anywhere where it has expanded and caused damage, especially within the layers of fibreglass. Not you, nor can any so-called marine expert tell by simply looking at the outside of a boat whether it has sustained moisture damage that has compromised its structural integrity. Nor can they see any hidden salt water damage. Only a qualified marine surveyor can identify and possible damage. Most marine service providers can provide you with the names of local qualified marine surveyors, so take advantage of qualified advice. A structural survey from a qualified marine surveyor is an absolute must if you are buying any used boat.
If you are financing a used boat through a bank, they may require a clean survey from a qualified surveyor if the boat is more than a certain value or beyond a certain age (generally five years). Most marine insurance providers also require a clean survey from a qualified surveyor under similar conditions for age and value. Check with both sources before you commit to a boat, discovering you can only get coverage from one means you can’t finalize the purchase.
One of the first questions usually asked by used boat buyers is ‘how many hours are on the engine?’. Good question indeed, but the answer is seldom relevant to the engine’s condition, the mechanicals, or the boat in totality. It will provide reference for sure, but it is essential to put that number into perspective before to make it meaningful. There are many boats with a hundred hours that are virtually trashed, and others with over a thousand hours that are almost equivalent to new condition.
The key to the boat’s current condition is its maintenance history, the quality and quantity of that maintenance, the upkeep and TLC given to it, the cosmetics, and its mechanicals over its years of use. Even if meticulous service records are provided, if you suspect anything whatsoever, have a mechanical inspection done by a qualified technician. They will tell you the current condition of the engine and drive system plus related components, regardless of what may have been done in the past. Between the structural survey and the mechanical inspection, if both properly done, you will know the current condition of the boat you are buying and where your hard-earned discretionary dollars are going.
There are virtually no “bad” boats being manufactured today, but there are several levels of quality. Manufacturers, in most cases (and unlike the auto industry) only produce the hull, deck, superstructure, flooring, cabinetry, and upholstery in-house. All other “fixtures,” including the mechanicals and electronics are usually purchased from outside suppliers and assembled into the boat you see. Take the time to educate yourself about the manufacturing process for each brand, it will help you gauge the long-term quality of your potential purchase.
There are only two significant sterndrive (inboard-outboard) manufacturers that every North American boat manufacturer uses, MerCruiser and Volvo Penta, and only about a half dozen major outboard manufacturers. Make sure the used boat you buy is powered by one of these suppliers unless you are a tinkerer with a lot of patience as obtaining parts for any other brand could be a real problem.
The suppliers of ancillary parts a boat manufacturer uses often have a range of quality within their product lines. As a result the boat manufacturer can select from a range of quality (and price) of instrumentation, switches, upholstery quality, stainless steel versus aluminum or plastic hardware, gel coat or paint or vinyl striping, the canvas, and so forth. The choice of part quality that goes into each boat will determine the price of the boat when new, and will certainly affect it when used. Quality translates into how long these parts last in our harsh Canadian boating environment and how “good” the boat will look five, ten, or twenty years later. It will also determine how easy it will be to maintain its current condition over a period of time.
The key to buying a used boat is indeed caveat emptor- buyer beware, but if you do your due diligence and purchase through a reputable source you can be confident you will be rewarded with a boat that will bring years of happiness. Use reputable sources, make sure your insurer and bank understand and approve the details, and trust in your instincts.