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Old 11-23-2002
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How long to depresiate?

Typcially, there is a really huge depreciation hit right up front. It can be 10 to 15% of the cost of the boat. It sometimes masked by the costs to commission a boat. It is easy to spend 10 to 20 percent of the purchase price of the boat on the little things that make a new boat work for you. These are often insidious little items that add up punctuated by some larger ticket items. It may look like a (comparatively new) used boat has the same asking price as a new boat base price but when you factor in fit out the reality is that the owners have taken a big hit.

Depreciation continues at a lesser pace for much of the life of the boat, except that well maintained, quality built boats will often ''bottom out'' and even go up in price a little after five or ten years. (For example, I have sold most of my boats for more or close to equal to what I paid for them.) What happens there is that as new boat prices increase, these better built older boats begin to look like a more of a bargain and so people are willing to pay a bit more for them.

Jeff
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