# Depreciation Rates?



## night0wl (Mar 20, 2006)

Hey Everyone,

I'm evaluating buying a boat, but I'd like to know how much a new sailboat depreciates over time. I am looking at keeping the boat up to 10 years, so I'd like to konw how much my investment will hold over time!


For example, can anyone tell me list vs resale price of the following models

Hunter 40 foot

Catalina 40 foot

Beneteau 40 foot.

As you can see, I'd like to buy the boat that holds their value the best...so real user experiences would be great to have (buy vs sell...or buy price vs book value)


----------



## sailingdog (Mar 19, 2006)

Depreciation isn't very easy to estimate...as a lot of it depends on the type of boat, the way it is used, the quality of the maintenance, etc. Boats tend to do worse if they are either used very little, or used a very lot. Boats that are used very little usually die from neglect, and boats that are used a lot die from wear. 

It also depends on the construction and quality of the boat...are you buying a high-end boat or an entry level model? 

Ten years is an awfully long time to make a guess at... but you might want to start by looking at ten year old boats from the three manufacturers and seeing how well they have kept their value.


----------



## Jeff_H (Feb 26, 2000)

I don't know that there is very good data on depreciation. I find that the 'Blue Book' data does not really reflect the specifics for any specific model. 

Historically, the general rule of thumb was typically stated in a round about way. Typically, commisioning and fitting out a boat costs roughly 15% to 20% of the base price of the boat. Depreciation after the first year was thought to be roughly the cost of fitting out and commissioning a boat. In other words, a one year old boat would traditionally sell for its original base price. Depreciation generally slows down a little after the first year and much more in the year that follows but depreciation then becomes very dependent on how hard the boat was used, how well maintained she was, and how well built the boat was to begin with. Over time, the value of a well maintained, well built boat will level out and may actually increase in value if the boat has had a reasonable regime of long term maintenance and upgrading. 

When you talk about the big three; Catalina, Hunter, and Beneteau you are talking about value oriented boats that are built in large numbers. I have had a number of occasions to take back to back look at used boats of the same age and size manufactured by all three manufacturers. My experience has been pretty consistent with different sized boats and has been supported by the surveyors that I have spoken to. 

Here is what I found. In a general sense, Beneteaus seemed to look fresher than the other two manufacturers and seems to hold their value best. Depreciation wise Hunter came next and surveyors tell me that Hunter generally does their operating systems better than the other two. Catalinas generally looked worn out much quicker than the other two and did not seem to hold their value as well as the other two. (Catalina claims otherwise, and I must say that my sampling was pretty small, perhaps a couple dozen boats.) 

If you are really worried about depreciation, I would suggest that you focus on 4 or 5 year old boats. By then the boat in question have enough use on her that should be able to tell if she has an inherent manufacturing defects and you won't face the high depreciation rates of the first few years. A 4 or 5 year old boat should be fresh enough that you won't get into the major long term high ticket price maintainance items in your 5 years of ownership. 

But frankly since the quality of maintenance has a far greater impact on resale than the manufacturer I would suggest that you pick out the boat that you like best. Frankly a big part of the value of owning any specific boat comes from the joy that the boat gives you. Individual models by the big three (or any one else for that matter) vary quite widely. Some sail better, and others offer better accommodations, still others do better on the race course and perhaps others are better seaboats. If you think about your own priorities and decide what you want out of your boat for your sailing venue, then the right choice will be far more obvious to you. 

For example given my priorities, (performance, offshore capability, and build quality with less of a focus on creature comforts) I am a major fan of the Beneteau 40.7. This is a no brainer. I have spent a lot of time on one that has had 5 hard years of use (including over 10,000 offshore miles in some very heavy going) and I am extremely impressed with how well these boats sail and how well they hold up. I am also a big fan of the Elan 40 as well. 

Good Hunting,
Jeff


----------



## tommyt (Sep 21, 2002)

Jeff H is one of the most knowledgeable people on this board and others as well. However, I still feel he has a Beneteau blindness that comes through loud and clear. I agree with all the points in his post except the comparison of the big three. You cannot rate the three together without getting a little more specific. If the Beneteau you are referring to is the 40.7...go there quickly and your depreciation is probably answered. If your Beneteau is a 23 series, in this case a 393 or 423, I think it will depreciate faster.

I happen to own a 34 Catalina. It is maintained by the same person that maintains a 323. Both are 2004's. They are used about the same and obviously the maintenance is the same. The Catalina is in excellent shape, the 323 looks badly used. Lots of trim fiberglass that is cracked...more like plastic than glass. Interior started out looking better, two years later the Catalina still looks new, the Bene is hurting. Maintenance is more expensive on the Bene because on many repairs you have to remove systems to get to others. 

When I bought the boat I was really torn between the two boats.Funny how I got to sit next to the one I did not choose to make the comparison. I asked two dealers, both of which sold Beneteau and Catalina, about the sailing capabilities and also the most bullet proof between them. Both dealers stated that there will be little noticeable difference dependent on how they are rigged, and both stated that the Catalina is the boat that is bullet proof. Hands down. 

Face it, they are both entry level boats, as is Hunter. I could have saved money buying the Beneteau, because it is lighter, and am happy I did not.
If I was to look at a 40 I would consider the 40.7...it is a great performer and I don't think you can compare the .7 series to the 23 series any more than you can the .7 to the Catalina. Different strokes for different folks.

Figure 15-20% depreciation on most of the entry level boats in the first year unless you over equip it with electroics, as they depreciate the quickest. After that 5-7 % a year until your 10 year number, and then they can actually appreciate if in good condition. Its like a car. A Chevy or a Lexus with 100,000 miles and no wax is worth a lot less than one with 50K that gets detailed every month.

And the depreciation....if you use the boat it is worth every penny!


----------



## TejasSailer (Mar 21, 2004)

I really don't know, but take the example of a Beneteau 40 in your post: a generic Beneteau 40, a Beneteau First 40.7 raced and a Beneteau First 40.7 cruised. I'm guessing that the 40.7 cruised would have a significantly lower depreciation. I also don't really know, but in terms of what I was interested in a boat that in truth is more day-sailed than cruised, the price-performance (no pun intended) of a Beneteau First beat the price-performance of a generic Beneteau. Only time will tell.

BTW, for those who are concerned about storage, consider the theory of suitcase size. What does somebody do what they go on a trip? They take out their suitcase, fill it and go on the trip. Simply start with a small suitcase. We have travelled carry-on for years, including one-week vacations in UK followed by two-weeks sailing in the med, all carry-on.

In the spirit of full disclosure, We have a First 36.7 for essentially day-sailing. If only we were good enough to really sail it.


----------



## Jeff_H (Feb 26, 2000)

I would agree whole heartedly with Tommy's observation that the Beneteau 'Number series' (23) are not as well constructed as the First series (the 40.7 is a part of the First series). I probably should have explained that as well. 

My comments are based on my observations and the observations that I refer to above were based on jumping from mid and late 1990's, Catalinas to Hunters to Beneteau Oceanis series (the predecessor to the current Beneteau number series). At least looking at the big three of that era the Bene's clearly looked fresher. Like I said I was looking at small sample. 

Tommy may be right that the current Number series are just not holding as well as these earlier boats. I also must admit that the used to asking prices that I was comparing were for boats for built in the 1990's which were being sold in the early 2000's. 

For what it is worth I have asked a number of marine surveyors about their observations. By and large they all pretty much concurred with my observations. The one issue raised by the surveyors that came up with the earlier Beneteaus was their use of non-US origin gear that is harder to replace off the shelf. I found this somewhat offset by Beneteau USA's stocking of parts at seemingly discounted prices, but of course there is a lot longer lead time ordering from Beneteau than going down to the local chandlery. 

I don't think that I do have a case of "Beneteau blindness" as much as I have simply been impressed with what I have seen when looking at boats of a similar age. Tommy may be right that the newer Bene number series boats just are not holding up as well as the crop that I looked at. 

Respectfully,
Jeff


----------



## TSOJOURNER (Dec 16, 1999)

*Enjoy*

After you decide on the boat of your dreams is this subject even releveant. We all have to be nuts to buy a boat in the first place if investment is your goal. Enjoy it and be happy no matter what you decide.


----------



## DeepFrz (May 9, 2006)

Look up Beneteau forums on the net. It seems like they have a lot of fiberglass problems, cracking, etc.

Phil.


----------



## TSOJOURNER (Dec 16, 1999)

You might want to buy, or borrow in a broker's office, a BUC book. These are supposedly the actual SALE prices of used boats that have been SOLD at those prices. Then you would have to contact the manufacturer and ask for the retail new prices of the same boats in the same years, and that's just the start.

There are other factors that will distort the numbers. For instance, the J/41 could have been hot and held value for years--but it was built for a racing rule being abandoned. On the other hand, a J/24 has been the same hot seller kept the same by class rules for many years. Result? Still popular with a holding resale value, because as long as the boat is in the same condition, the year doesn't really matter.
So if a model changes or gets obsoleted, your value may drop. On the other hand some classics like the Pearson 424 hold very well, because they still are well suited for what they were sold and built for.

Then there are oil prices. When oil goes up, fiberglass goes up, new boat prices go up, and the market for used boats goes sky high and dries up because the new ones are so expensive. That also happened big time when the 10% "luxury tax" was passed on boats (vaguely 1990?) and used boats became more popular and increased in value because new ones got kicked up 10%.

If you go with something "classic" and keep it in top condition--which means more preventive maintenance, more waxing, and more care than many boats get--you'll keep up the resale value. But I think it really comes back to the old yachting statement: If you have to ask, you don't need to know. A boat is gonna cost. Annual haulings, bottom paint...and sails don't last forever. A ten year old boat with two year old sails can be carrying a fast $10-25,000 more in sail inventory, than the same boat with blown out ten year old sails. More so, obviously, for bigger boats and for racers carrying large inventories.
Got a Hobbs meter on the engine, and a maintenance log? then you can document how much time the engine does/not have on it, which may also impress the next buyer. But who thinks of that ten years ahead of sale time.<G>


----------



## RobGallagher (Aug 22, 2001)

Yachtworld.com posts the selling price of their listed boats as reported by brokers, but, you must be a broker (or have access to one that is willing to help you out) in order to see this information.

Maybe there is a way to pay a subscription price?

From the YW.com webpage:

"BoatWizard provides a members-only Multiple Listing System (MLS) with co-brokerage opportunities and access to information not available to the public, including our 80,000 boat Sold Boat Pricing Guide."

Rob


----------



## Yamsailor (Jun 7, 2006)

Any new information on depreciation rates?


----------



## night0wl (Mar 20, 2006)

So, I started this thread.

I ended up buying a 2008 Beneteau 343.

After excluding ex-charter versions of my boat, the listing midpoint price on yachtworld for my model year 5% below what I paid for our 343. However, ours has a lot more equipment than the midpiont boat (A/C, better electronics, better ground tackle package, kiwi feathering prop, more upgrades, better canvas). 

Assuming prices on yachtworld are 10% over what prices actually close at, and also you have to pick up 10% broker comission (ouch)....I'd say after 5 years, I'm down 25% in depreciation costs. In that I've poured money into the boat for keeping up with an aging boat. Things like bottom jobs, sail maintenance, compound/polishes, teak work, divers. No moorage since the boat sits behind my house...but i'm sure an accountant would say I should account for a part of my mortgage payment related to the boat. I've also had repairs due to mistakes I've made.

Also, have to remember, I negotiated awful hard on our boat because the dealership lost their floorplan financing and this was the one of the last of my model left. Strange days in 2008/2009.

If it were normal situation, I'd have paid 10% more than what I paid...so the depreciation would be more like 35% depreciation after 5 years for a new boat.

What I wonder is whats going to happen after my boat goes over the 5 year "cliff"...that seems to be the point where boats just dont get maintained as well and lots of expensive maintenance comes due. Rebedding hatches, hardware, replacing windlasses, replacing sails, engine overahauls, replacing electronics, etc.


----------



## night0wl (Mar 20, 2006)

Also, despite what the gov't is saying about inflation being flat, I can attest that I could *NOT* afford a new 34-36 foot production boat at todays prices. At least the prices I'm seeing listed in the sailing rags for "sailaway" prices for Beneteaus, Hunters, and Catalinas in that size range.


----------



## JulieMor (Sep 5, 2011)

night0wl said:


> What I wonder is whats going to happen after my boat goes over the 5 year "cliff"...that seems to be the point where boats just dont get maintained as well and lots of expensive maintenance comes due. Rebedding hatches, hardware, replacing windlasses, replacing sails, engine overahauls, replacing electronics, etc.


Value depends on who you're talking to. Lenders have one value, sellers another and buyers another. Since the buyer is the one with the money to buy your boat, sellers need to consider what a buyer wants when trying to value their boat down the road.

Two identical boats, side-by-side, would have the same value to a lender and maybe to the seller. But if one is in much better shape, the prospective buyer will buy that one.

We looked at numerous Ericson 38-200 built 1987-1990. Two were priced in the upper $50s, all the rest in the mid to upper $60's. The listing price had nothing to do with the condition. The cheapest was close to the best condition and had more upgrades than most. The highest priced was in decent condition but it was over $12K more than a comparable one. The cheapest sold a couple days after we looked at it. The rest are still on the market.

If you do regular maintenance on your boat, you will be ahead of the pack. And any buyer who sees your boat and another similar will probably buy yours first. But things like electronics depreciate rapidly, regardless of usage or maintenance. Five years and they could be fully depreciated. Leaks can depreciate your boat quickly too. But that's something you can do something about.

In real estate they say a house newly built and left alone will fully depreciate in 60 years. But if you maintain it and upgrade it over the years, it will hold its value much longer. Boats are no different.


----------



## Seaduction (Oct 24, 2011)

It varies.


----------



## hellosailor (Apr 11, 2006)

Well here it is, six seven years after the original post. If the OP bought a boat, they can come back and tell us if it is still worth anything.

For actual historic numbers, Practical Sailor's used boat books list new and resale prices over long periods, based on actual sales prices.


----------



## Yamsailor (Jun 7, 2006)

JulieMor said:


> Value depends on who you're talking to. Lenders have one value, sellers another and buyers another. Since the buyer is the one with the money to buy your boat, sellers need to consider what a buyer wants when trying to value their boat down the road.
> 
> Two identical boats, side-by-side, would have the same value to a lender and maybe to the seller. But if one is in much better shape, the prospective buyer will buy that one.
> 
> ...


You recently purchased the Ericson (love the Ericson 38-200)? If so, what kind of work did you need to do to it?


----------



## TJC45 (Jul 10, 2013)

Just to clear up a point, the OP asks how much his *investment* will depreciate. Depreciation is just one part of the financial cost of ownership. Boats, like other depreciating big ticket items aren't investments. To calculate the true hit to the wallet we have to measure lost opportunity cost. The money used to buy the boat could have been invested in some way to gain value. That earning power is lost forever. As well, the difference between the buy price and the sell price is no different than lost principal on an investment.

of course this is looking at boat buying form purely a financial perspective. Boat owners, like owners of any other big ticket item weigh that lost opportunity cost against the enjoyment it will bring. That's a metric that's a little harder to calculate. AS long as you are enjoying yourself, and you haven't mortgaged your kids future to do it, go for it!!!!


----------



## night0wl (Mar 20, 2006)

TJC45 said:


> Just to clear up a point, the OP asks how much his *investment* will depreciate. Depreciation is just one part of the financial cost of ownership. Boats, like other depreciating big ticket items aren't investments. To calculate the true hit to the wallet we have to measure lost opportunity cost. The money used to buy the boat could have been invested in some way to gain value. That earning power is lost forever. As well, the difference between the buy price and the sell price is no different than lost principal on an investment.
> 
> of course this is looking at boat buying form purely a financial perspective. Boat owners, like owners of any other big ticket item weigh that lost opportunity cost against the enjoyment it will bring. That's a metric that's a little harder to calculate. AS long as you are enjoying yourself, and you haven't mortgaged your kids future to do it, go for it!!!!


I think you make the assumption that I bought the boat new...cash. No, I finaned. 20% down. So my opportunity cost is the amount of foregone appreciation of that initial $20-30k.

So yes, my "loss" is even greater...but not as bad as someone that buys a boat cash outright new.

Perhaps inflation will "save" me. I find that old boats are selling for the same value they sold for initially...but the value of the dollar has dropped.


----------



## Yamsailor (Jun 7, 2006)

Anyway you slice it a boat is a not a financial investment. It is an investment in enjoyment. That being said, depreciation is one factor that enters into the cost of ownership calculation. For me, when I purchase a boat, I want the major depreciation to be out of the boat, which puts me at a boat at least 3-4 years old. A 20 year old boat will depreciate about 1-3% per year and the price will always be lower than something that is just a few years old. The key to this whole thing is maintenance. If a boat is maintenance is kept up; Engine/electrical systems are maintained; water intrusion is prevented, and hull intergrity is well kept the boat will depreciate less in the sense you can sell it on the market for a higher price. The biggest issue I see with boats is engine and water intrusion, those two deal breakers for me right off the bat.


----------



## JulieMor (Sep 5, 2011)

FWIW, this is what's on YW right now. 

Beneteau 343 *2005 $ 99,900.00 Miami, FL
Beneteau 343 *2006 $118,700.00 Pickering, ON
Beneteau 343 *2006 $114,900.00 Seattle, WA 
Beneteau 343 *2006 $112,500.00 Toronto, ON
Beneteau 343 *2007 $129,900.00 San Pedro, CA 
Beneteau 343 *2007 $109,000.00 SC - Sale Pending * 
Beneteau 343 *2007 $ 99,900.00 Oakdale, MN
Beneteau 343 *2008 $120,000.00 Rock Hall, MD
Beneteau 343 *2008 $119,500.00 United States * 
Beneteau 343 *2008 $115,900.00 WA - Sale Pending * 
Beneteau 343 *2008 $114,000.00 Portland, OR
Beneteau 343 *2008 $108,900.00 St. Petersburg, FL
Beneteau 343 *2008 $106,900.00 Portland, OR
Beneteau 343 *2008 $100,000.00 CA - Sale Pending * 
Beneteau 343 *2008 $109,900.00 Oriental, NC

And this is how NADA values the B343:
Year - List price - Low Retail - Average Retail
2005 - $102,900 -	$48,600 -	$55,050
2006 - $107,700 -	$53,600 -	$60,700
2007 - $112,700 -	$56,500 - $64,000
2008 - $115,900 -	$61,500 -	$69,650

Get the soldboats data, throw it all into a hat and see what comes up.


----------



## TJC45 (Jul 10, 2013)

night0wl said:


> I think you make the assumption that I bought the boat new...cash. No, I finaned. 20% down. So my opportunity cost is the amount of foregone appreciation of that initial $20-30k.
> 
> So yes, my "loss" is even greater...but not as bad as someone that buys a boat cash outright new.
> 
> Perhaps inflation will "save" me. I find that old boats are selling for the same value they sold for initially...but the value of the dollar has dropped.


My post wasn't directed at you personally. Just a general comment on the cost of money. It applies regardless of the cost of the boat or whether it is purchased for cash or financed. Boats, as depreciating assets are not investments. Find a boat that appreciates in value, that would be an investment.

That said, your lost opportunity cost applies to every dime you put into the boat. Regardless of cost, that money is lost for alternative investment.For example, the payments on the boat could be used to increase your 401k contribution, or fund an investment account.

Take the original DP money, add up all the payments, add in a growth factor, and do a time value of money calculation. That's the lost opportunity cost. That money is no longer available to you to pull the financial wagon.

Buying boats, cars, airplanes, RVs etc etc isn't about investing the money. It's about enjoying what we work hard for. I never worry about what the total cost of whatever "Toy" I'm buying will be. What a buzz kill! The fact that it is not an investment, whether I lose X or X plus on the car, motorcycle, boat etc doesn't really matter. One of the reasons i ride my motorcycles like i stole them. That money is gone forever, i better enjoy the ride!!!!!

Lastly, as for your boat, as a past Beneteau owner, I'm a big fan! Good luck!!!!


----------



## night0wl (Mar 20, 2006)

JulieMor said:


> FWIW, this is what's on YW right now.
> 
> Beneteau 343 *2005 $ 99,900.00 Miami, FL
> Beneteau 343 *2006 $118,700.00 Pickering, ON
> ...


I always exclude ex-charter boats. Not a fair comparison vs an owner configured and maintained edition....charter boats are motored hard and put away wet. They usually have stripped configurations (no roller furling main), barebones electronics, no dodger, no A/C, etc.


----------

