Yacht purchase; New vs Used

I'm still trying to figure out the point he was trying to make. Was it that prices have increased? Was it that a used Lazzara is the same price as a new Sea Ray? Was it that we all should buy used or to encourage new buyers? Ultimately, there is no question that buying used is financially more sound than buying new. That said, we only buy new, same with cars and boats. We do buy used houses. We like getting exactly what we want, not inheriting anyone else's problems, We like predictable costs covered under warranty. We like having years of a one owner boat. But we would never profess it makes financial sense. Of course, boat buying in general doesn't.

Agreed, Where is the question. It seems like some random post #1 about...?

He was just making a statement after a case of sticker shock. Thanking new boats owners for supplying us with used boats.

Then he's quite welcome.

I've never quite understood sticker shock people feel after 20 years or more.

I remember lake property and one particular lot was for sale for $100k. One person was lamenting how it was tempting but just too much and he remembered when he was a child his father could have bought it for $10k. I asked, "Why didn't he buy it?" Answer was he didn't have $10k. I then said "Well, you have $100k so are you going to buy it now?" He looked at me with something between a stare and confusion. He bought it and told his elderly father who was shocked at what he paid. They then invented a term, they called it "Family Economics" and said it terms of their family's real dollars the price had dropped over those years. The father commented that the second time it sold, it sold for $46k but with two kids in college, he couldn't pay that either. In fact, he decided that the reason his son could afford it today, was that he didn't spend on it, years ago, instead paying for his son's education.

I remember reading the quotes of the founders of the jeans businesses and one of the leaders even said as late as the 1960's that if the price of a pair of jeans at retail ever reached $10, that would be the end of the industry. No one would ever pay that for blue jeans. Now, most of us would quickly look at some women's designer jeans at $100 and $200 but mean are guilty too. Sak's has men's Gucci Jeans over $1000 now, so $50-60 for a pair of Levi Strauss isn't so bad.

Well, as it applies to new vs used, used prices have risen by somewhat similar rates to those of new prices. The ratio remains much the same.

However, I don't mean to make light of the challenge faced in buying boats. So, some further thought.

Now, here is the big negative for the industry as a whole. The top 5% earners have seen their incomes and worth grow even more than the cost of boats. The lower 35% of earners were never potential buyers. However, that percentage of those on the lower side has grown and is now more like 55% than 35%. And for those from the 55th percentile to the 75th or so, their buying power has decreased relative to inflation. The shrinking of the middle class including the upper middle class does have a profound impact on luxury purchasing. 150' yachts aren't impacted but from 20' to 80' sure is. The industry has responded the best they know how. You see that with the tremendous increase in the market share of outboards. Young families can't afford the Sea Rays that were so popular 20 years ago. Sea Ray tried to ignore that too long. Now those who do get into boating more often do so in outboards. While the tournament big game fisherman still can afford the finest sportfishing boats, the want to be fisherman no longer can afford SF's and so there you see the proliferation of CC's. However, CC builders better be careful. If they present the picture that a CC needs to be 40' or more and have at least 1200 hp, then they're going to turn a way a lot of their potential buyers.

A couple of quick numbers. In the last 40 years, looking at income, the middle class has decreased by 9% while the upper has increased 5% and the lower has increased by 4%. Even worse, since 2000, while the upper's income in today's dollars is up 2.3%, middle income is flat and lower income is down 5%. So, the rich get richer and the poor get poorer and more of the middle find themselves moving lower on the scale.

The retail environment is largely influenced by Amazon and Walmart but focusing solely on them is misleading. There's a reason far beyond that for slippage in department stores while TJ Maxx, Marshall's and Dollar Stores are booming. Dollar Tree's target customer is upper middle class. Those in the middle are forced to look for bargains more.

So, to the OP's post, fewer people can afford new boats in the middle range. The Sea Ray Sundancer would be a prime example. Those buying Feadship or even Sunseeker aren't the ones impacted. Those getting custom SF's aren't, but the Cabo buyer sure was. The Grand Banks buyer was.

What the OP is feeling is very much reflective of what has taken place. No, the buyers for new Sundancer's are much fewer. The buyers for 26' Sterndrives are fewer. Boating in general is affordable for a smaller percentage of the population and that is sad to me. I grew up boating. When I was 13, my father bought me a 17' Sea Ray sterndrive while he had a 14' fishing boat. He paid around $12,000 for my boat. The smallest 2020 Sea Ray I/o is $39,000. My parents were middle to upper middle financially, certainly not wealthy. His equivalent today would not be able to buy my equivalent that boat. Even an 18' Glastron O/B is $27,000. Perhaps he could stretch to that or it would be used or it would be no boat at all.

The reduction in buying power of the middle class is very obvious when it comes to boats. Their buying power has increased less than 100% and the prices have increased more than 200%.

I'm in both manufacturing and retail and we see it throughout on quite a few products. Some boat builders have responded fairly well but many were slow and blind to what was taking place. Sea Ray sure was.

Back then your father's probably paid cash or had a short term loan. Today all that would probably be mortgaged to the max even at a higher income level. Not to mention the maintenance to keep everything up and running.

Two generations. 51 years, 1.7 generations.

It appears that income inequality is in fact real. History tells us that if income inequality persists and gets bad enough that civil unrest will follow. Maybe this is outside the scope of this forum but I would enjoy you alls thoughts on why this situation exists and what can be done about it. I realize every generation looks back on the ones behind it and thinks that they don’t measure up. I employ young men and I feel that the younger generation has some quality hardworking honest people in it but, I do wonder if we as a society don’t work as hard as we used to yet expect all of the bells and whistles. I will confess to chasing a dollar my entire life but I am the first to admit that may not be the highest and best use of one’s life.

You're right. Outside the scope of this forum. I'll be glad to discuss in private.

Now, that's ancient times.

Interestingly, I think back to renting my first apartment in 1989 and rent was $700 or so per month. That apartment is now $1008 per month. I think of the house I rented in 1998. I paid $1300 per month and think it would likely be $1700-1800 now. Now, that's in NC and not lakefront. We bought a house on the lake in 2003 and sold it in 2012 for nearly double what we'd paid plus improvements. I look around in South Florida and waterfront has doubled and tripled but many areas only have small increases. When we hit the next recession you'll see a dramatic readjustment as we did in 2008.

Boats are dependent on petroleum and that is reflected in their cost increase.

The problem is that we all deal with different expenses, different costs.

I think one other thing is very important in the equation and that is saving. The majority of people are not able to save today. Therefore, they have no assets earning for them. We were able to save and we earned on that savings and that put us in better position, but we had two salaries, one very good, no kids, no major expenses such as medical, and an affordable home that was fully paid for. So, our net worth grew much faster than inflation. That's simply not something that is possible for most people.

No, I think it's true. Look at the price of entry level boats. You have to make $100k just to be able to buy a 25' center console. Let's use a Boston Whaler outrage. They're $160-170k new, $3k a year to service it, $800 a month to keep it in a high and dry, plus insurance, plus boat payment. 10 years ago they were what $90k, dry storage was half...…..normal peoples income certainly has not doubled in the last 10 years.

Look at the owner situation.....no longer do you have your typical run of the mill doctor, lawyer, dentist, cpa, owning a yacht......whereas before that group had tons of 45' searays and similar