Boat Price Reckoning

walleyevision wrote:

Lastly, anyone that says financing a boat is stupid yet finances a car is a huge hypocrite. One basically maintains value, the other drops precipitously.

The argument you’ll get against that statement is that your car takes you to work, picks up groceries, drops the kids off at school, etc. That said, I’m in the camp of making debt work for you. I don’t believe paying cash for things is always the best idea financially. In fact, I think in most cases it’s probably better to finance. Look at new car loans right now, you can easily get less than 2% if not 0%. I can do better than a 2% return on my money right now. Even the 3.5% quoted on some recreational loans are attractive when you look at what you can make investing. Now I think that the 144 month terms that are offered boat loans right now might be out of wack, but I’d have no problem with a 60 month.

I’m taking delivery of a new boat this month and I’m juggling how I want to deal with it. I initially just planned to pay cash, but with rates as low as they are and still a bit of economic uncertainty on the horizon, I am considering financing at least a bit of it.

Lastly, the late Kirby Puckett said “Tomorrow isn’t promised to any of us”. Enjoy today without leveraging your future. I’ve known a few people that didn’t make it to retirement to enjoy all the saving they did over their career.

sorgy wrote:

Just out of curiosity- anyone have an idea on how much a 1992 Ranger 690 C with a 91 Evinrude Intruder 150 would have cost new? It not even on a Ranger Trailer.

Very good discussion on the last 8 or 9 posts!

Thanks

Steve

Just a wild guess, but I am sure that boat was over $30K new. My dad bought a 17 foot alumacraft new with 90 evinrude, trolling motor and depth finder for $13k and the Rangers of similar size were easily double that.

Gary Will wrote:

My humble opinion:

Go for it-life is too short-if you can afford a 100000 dollar boat and your wife agrees more power to you. My wife would show me the door. Ha Ha

Oh man, I might have screwed this one up. Not a 100k boat, but a 30k one. Had buy-in from the Mrs., but only had 15k that I wanted to commit to putting on it. Probably should’ve financed the difference while the iron was hot – just couldn’t pull the trigger after working hard to eliminate all debt besides the mortgage.

If you had the $50,000 to pay cash for that boat and with the current low interest rates, paying 2-3% on the loan and instead of paying cash for that boat may not be your smartest finanical move. You could have invested that cash (50k from the previous example) and in the past 5 years easily gotten 10-12% returns in the market. Now instead of just having a “paid for boat” you have a boat with quite a bit of equity and and around $80k in cash(50k x 10% for 5 years). I agree 100% with the “pay cash only” mentality, or what they really mean of don’t spend more than you can really afford. But SOME debt is a good thing, you see the mega rich people finance properties all of the time when they have the liquid money to pay for it, why not pay a couple percent interest when you can invest that cash and make much more on it?

Or, you could put the money in a passbook saving account at your bank and make .23 a year.

Red Reno wrote:

If you had the $50,000 to pay cash for that boat and with the current low interest rates, paying 2-3% on the loan and instead of paying cash for that boat may not be your smartest finanical move. You could have invested that cash (50k from the previous example) and in the past 5 years easily gotten 10-12% returns in the market. Now instead of just having a “paid for boat” you have a boat with quite a bit of equity and and around $80k in cash(50k x 10% for 5 years). I agree 100% with the “pay cash only” mentality, or what they really mean of don’t spend more than you can really afford. But SOME debt is a good thing, you see the mega rich people finance properties all of the time when they have the liquid money to pay for it, why not pay a couple percent interest when you can invest that cash and make much more on it?

No Doubt!

I’ve always paid cash for everything. I don’t invest or play with my money. But maybe I should? I also run a 05 boat with a 97 motor. I could never bite the bullet to buy something newer. Mine has been doing great.

I drool over so many boats but can never pay the asking prices.

I just got some #’s yesterday on buying new, and think I need some time to adjust my mindset . They all push 15 year loans, since a $800-900/month payment on a 5 year loan isn’t appealing to most I assume. We have great credit and money to put down, but yeesh! Probably wait another year, hopefully the reckoning comes!

Red Reno wrote:

If you had the $50,000 to pay cash for that boat and with the current low interest rates, paying 2-3% on the loan and instead of paying cash for that boat may not be your smartest financial move. You could have invested that cash (50k from the previous example) and in the past 5 years easily gotten 10-12% returns in the market. Now instead of just having a “paid for boat” you have a boat with quite a bit of equity and and around $80k in cash(50k x 10% for 5 years). I agree 100% with the “pay cash only” mentality, or what they really mean of don’t spend more than you can really afford. But SOME debt is a good thing, you see the mega rich people finance properties all of the time when they have the liquid money to pay for it, why not pay a couple percent interest when you can invest that cash and make much more on it?

This. Being in debt isn’t a bad thing, being over in debt is a bad thing. at the end of your 10 year boat loan, you will likely have doubled your money in the market. But it is technically a gamble.

Giving this a little revive.

Talked with an alumacraft dealer the other day. Said prices are going up 14% next year. I realistically was 1-2 years out from buying new but with the big increases the last year and now going into next I am not sure if it’s ever going to happen. Kind of sucks because it just means the kids will be older (they are 9/7 currently). Wanted to do it this year but too many house projects (oh those are more expensive too)

Saw the Triton Allure/Fishhunter 186 went up about 5K on their nationally advertised price. Buddy of mine bought a new tracker this year. Same exact boat 4 weeks later was $3800 more.

Wife and kids are already not comfortable in the current boat. Just kind of sucks

It is what it is I guess. I will list mine in mid Sept. for the middle $60’s and accept $60k flat. On March 1st I will raise the price to upper $60’s and accept the asking price only. Reasoning? People will have shopped the boat shows and found this boat to push $100k. The question will be is $30k enough to save by buying used vs new? My guess is yes. But if it doesn’t sell it doesn’t sell and I run it another year.

This spring I sold my tiller for $4k less than asking, I removed the Ulterra & (3) Bird locators first.

Another thing to keep in mind is dealers need used inventory. They are paying top dollar and tacking their profit on top of that.

I still don’t see the prices dropping like so many are hoping for. It’s still a sellers market at this point.

My buddy is looking for a used tyee. Been helping him search. You can find tons of late 90s early 2000s Lund tyees in good shape with electronics and bow mount trolling motor for under 10k.

I’ve been telling my buddy to just buy a used rig with a solid floor and when the time comes to upgrade the motor swap it out with a new one for 10-15k. Not a foolproof plan of course as you can still run into all sorts of issues with a 20 year old boat but you know what – sometimes new boats have issues too.

Personally I’d rather have a 20 yr old boat with a new motor for 20-25k than a brand new boat for 50k

This is a margin game for the mfg. They can’t produce to demand so they will lower demand with higher pricing but keep their overall margins. Eventually this will balance out but in the near term dealers know they may lose customers over higher prices but they can’t produce that many boats anyways. Raising prices combats that.

/Econ 101

Exactly why I ordered my 2022 back in May, I’d rather have it sit in my garage all winter than pay xx% more by waiting.

HRG

I bought used last August knowing it wasn’t the best time to buy, but looking at similar rigs now (if you can find them), I’m grateful that I bought when I did. Plus we’re loving the boat, so it was a good purchase. And with the unbelievably low water levels, I’m helping the local prop repair business to stay busy.

I’m still waiting for my alumacraft I ordered end of January and have looked at other dealers hoping to find one in stock like I ordered with no luck but did notice MSRP has gone up close to 10k from when I ordered mine. After Labor Day my trade in is going up for sale. I know it’s not my dealers fault but I feel I have been very patient with the constant delays because at this point when my new boat shows up it’s going right to storage for the winter.

Eelpoutguy wrote:

<div class=”d4p-bbt-quote-title”>Red Reno wrote:</div>
If you had the $50,000 to pay cash for that boat and with the current low interest rates, paying 2-3% on the loan and instead of paying cash for that boat may not be your smartest finanical move. You could have invested that cash (50k from the previous example) and in the past 5 years easily gotten 10-12% returns in the market. Now instead of just having a “paid for boat” you have a boat with quite a bit of equity and and around $80k in cash(50k x 10% for 5 years). I agree 100% with the “pay cash only” mentality, or what they really mean of don’t spend more than you can really afford. But SOME debt is a good thing, you see the mega rich people finance properties all of the time when they have the liquid money to pay for it, why not pay a couple percent interest when you can invest that cash and make much more on it?

No Doubt!

Using that logic, would you borrow 50k and invest it??

crappie55369 wrote:

My buddy is looking for a used tyee. Been helping him search. You can find tons of late 90s early 2000s Lund tyees in good shape with electronics and bow mount trolling motor for under 10k.

I’ve been telling my buddy to just buy a used rig with a solid floor and when the time comes to upgrade the motor swap it out with a new one for 10-15k. Not a foolproof plan of course as you can still run into all sorts of issues with a 20 year old boat but you know what – sometimes new boats have issues too.

Personally I’d rather have a 20 yr old boat with a new motor for 20-25k than a brand new boat for 50k

Yeah. Some of my issue is that my wife has some ideas about what she wants in a new boat. So the alumacraft edge or competitor fsx would have been perfect I was just getting excited that I could finally have a boat the way I want it. Getting kind of sick of my 90 horse merc being louder than the 300s everybody in my club is running lol.

I still am a believer that it will correct. Housing has slowed noticeably in my area (SE metro), campers are popping up for sale and sitting there much longer, and eventually it will get to toys. The finance everything and make the payment game will end with slightest bump in the road. It is a mean pattern that always repeats itself and people will spend years digging themselves out. The ones that stuck the money in the market in something fairly safe, earned a modest 10 percent and buy on the downside will feel great when it happens. Only sacrifice is fishing in an old boat for longer than you wanted too. But, to each there own, just enjoy what you have and make the best of it!

the_hat wrote:

I still am a believer that it will correct. Housing has slowed noticeably in my area (SE metro), campers are popping up for sale and sitting there much longer, and eventually it will get to toys. The finance everything and make the payment game will end with slightest bump in the road. It is a mean pattern that always repeats itself and people will spend years digging themselves out. The ones that stuck the money in the market in something fairly safe, earned a modest 10 percent and buy on the downside will feel great when it happens. Only sacrifice is fishing in an old boat for longer than you wanted too. But, to each there own, just enjoy what you have and make the best of it!

Yeah that’s sort of it. I don’t really enjoy what I have anymore. I might be approaching the 2nd best day of boat ownership lol.

Just remember, if the boat market collapses your used boat you want to sell / trade collapses also.

HRG, what boat did you order?

I’m assuming another Lund.

Dutchboy wrote:

Just remember, if the boat market collapses your used boat you want to sell / trade collapses also.

Which is why I’m seriously thinking about selling.

I honestly think these prices are here to stay. I think the same thing is going to continue in the auto industry. Lower inventory levels and drive up the price. It will lead to lower profitability based on production reduction, but they are not applying tons of incentives to move inventory like they did in the past. I mean, they would discount half ton trucks like 10k plus all the time a few years ago. Now if there is ANY rebate you are lucky. Most new vehicles are going for near MSRP.
I really should sell my boat. It hasnt gotten out much the last two years and its sort of depressing. Considered selling my truck too and just running my son’s SUV that we have parked for a while too. I was offered nearly what I paid for it almost 2 years ago and they would cut me a check on the spot.

My buddy who ordered a New Crestliner in Early July got notice from the salesmen at the dealership that his new 2022 should be here by late Sept. at the latest. I find that hard to believe since another friend of mine is still waiting on a Lund he purchased in Jan. ( 2021 model ) and both boats are manufactured in the same plant. I know a guy who works at Lund / Crestline boats and he said they normally switch over production to the new model boats in late June or early July but were still building boats for 2021 models in late July. He also says they have a TON of partially finished boats sitting around waiting on some smaller finish parts to arrive. As much as I would love a new Boat. Its not happening anytime soon. Wont pay the $ they want and won’t deal with the delay hassle.

CaptainMusky wrote:

I honestly think these prices are here to stay. I think the same thing is going to continue in the auto industry. Lower inventory levels and drive up the price. It will lead to lower profitability based on production reduction, but they are not applying tons of incentives to move inventory like they did in the past. I mean, they would discount half ton trucks like 10k plus all the time a few years ago. Now if there is ANY rebate you are lucky. Most new vehicles are going for near MSRP.
I really should sell my boat. It hasnt gotten out much the last two years and its sort of depressing. Considered selling my truck too and just running my son’s SUV that we have parked for a while too. I was offered nearly what I paid for it almost 2 years ago and they would cut me a check on the spot.

You’re right but it won’t lead to lower profitability. See my comment above….prices will remain high and it will drive demand down eventually. Mfgs will adjust production levels to meet demand and thus lower costs. They’ll produce less boats at a higher price thus keeping profitability.

We also have to remember that component costs are rising and both dealers and mfgs have to account for that. I’d expect not only to the actual boat prices continuity climb but all the dealer accessories too.

It would be interesting to know how many parts are made in China vs other countries including our own. I think we are seeing just how much control over our economy China has and what they could do if they wanted to. Or are they already.

Components are going up as well. I just saw a terrova at a local store for $250 more than I paid for the same model in February.

Dutchboy wrote:

I think we are seeing just how much control over our economy China has and what they could do if they wanted to. Or are they already.

Not a big fan…

Dutchboy wrote:

It would be interesting to know how many parts are made in China vs other countries including our own. I think we are seeing just how much control over our economy China has and what they could do if they wanted to. Or are they already.

I don’t think most people even want to know the answer to either of those 2 question. Then again far to many people don’t really care. Its really sad. China has turned into a superpower based on a industrial model that the US had abandoned.