nuAh the great debate.  Boat and yacht sales are continually compared to automotive sales, but the two couldn’t be more different in everything from the rate of depreciation to tax incentives.

When looking for a car, you research, you test drive and then you finally find the car and options you want and need. The first choice you make is whether or not to buy new.  Now if you’re like the majority of car buyers, coughing up the hefty amount of cash a new car requires isn’t something that you’re likely to wake up in the morning and decide to do. You know what you want so now you find models that are 2-5 years old. Why pay a high price when the vehicle literally depreciates the instant you leave the dealership? So you go on a hunt for a recent model that comes with the desired options.  You get the car you want and have some cash left over for a small road trip to celebrate.

In boat buying, there is no ‘boat lot’ and a boat won’t depreciate like a new car will when you sail it away. Cars can depreciate up to 90% in the first five to seven years, boats only depreciate around 20% depreciation.  Typically, boat owners trade up around five years and they can use that 70 to 80% retained value as a down payment on a new or larger vessel and finance the balance for 20 years!

Here are some major benefits of buying new:

  • When trading in a boat you only pay the sales tax on the difference! If you buy a new boat for $125,000 and you have a trade in for $65,000 you’re only paying sales tax on $60,000.
  • More options! You have significantly more options with a new boat versus a new car. This makes it harder to find a used boat with the exact options that you want, which necessitates many costly upgrades after the boat purchase. Therefore, it is often easier and more cost effective to order a new boat with the exact options you want.
  • Trades only possible on new purchases. Most used boats for sale are privately owned – even if the seller is employing a yacht broker.  Consequently, trading your existing boat in on a used boat is typically not an option.  This can delay the buying process if you have to wait to sell your current boat to buy again or can be costly if you end up owning multiple boats at once.  Plus, without a trade the sales tax incentive is no longer available.
  • Dealer incentives. When buying a dealer owned boa t the salesperson or dealership is often able to throw in additional services.  This could range from dockage and storage, to a safety package, to waiving haul out or launch fees.  These services can really add up so getting them free from the dealer is a big savings.
  • Warranty! New boats almost always come with a limited warranty, so if you do run into an issue early on there is service and support available.

These are major advantages to buying new that are not always obvious to buyers.  So take your time and consider the possibility of a new boat when you start your search.

Check out this price comparison for a new yacht versus the same model three years older and tell me buying new isn’t worth it.

New vs Pre-owned Comparison No Trade-in
New Yacht Pre-Owned Yacht 3 yrs Old
Purchase Price $175,000 $138,000
Price Difference % $0 21%
Sub Total $175,000 $138,000
Sales Tax(Purchase Price x 6%) $10,500 $8,280
Total Purchase Price $185,500 $146,280
First Year Cash Outlay
Down Payment(10%-New 15%-Used) $17,500 $20,700
Cost of Surveyor($14 x LOA) $504
Cost of Haul Out & Yard Expense $400
Cost of Travel $700
Cost of Hotel $200
Cost of Yacht Interior Decoration($20 x LOA) $720
Planned Refit & Upgrades(within 1st year to include electronics,electrics, mechanical, plumbing, canvas,a/c & refrigeration, sails & sail plan,dinghy & O.B, entertainment items & misc-$150 x LOA) $5,400
Survey Items Repaired (within 1st year-$70 x LOA) $2,520
 Bottom Anti-foul($45 x LOA) $1,620
Sub Total First Year Cash Outlay $17,500 $32,764
New Yacht Rebates/Discounts $0
Total First Year Cash Outlay $17,500 $32,764
Financed Amount $168,000 $125,580
(based on current rates and loan to value)
Monthly Expense Recap
Monthly Mortgage Payment $1,277 $955
Monthly Maintenance $50 $125
Total Monthly Expense $1,327 $1,080
Monthly cost of ownership for 4 years   $1,692 $1,762
Monthly cost of ownership for 5 years   $1,619 $1,626  
Monthly cost of ownership for 6 years   $1,570 $1,535
(1st Year Cash Outlay + Monthly Cost for number of months)

You may be spending more money on the boat but you’ll have way less out of pocket expenses and well see you in five to seven years when you want to trade up.