Quote:
Originally Posted by CaptainFredGreenfield
How much would you pay for a 310 after 5 years with the engine needing servicing, noticeable wear and tear on everything, a sail or two damaged, its dirty, bottom hasn't been cleaned in who knows how long, zincs haven't been changed and possibly other issues?
GIVE ME A NUMBER!
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Of course Fred you're right as always. My answer to the above is NOT MUCH! That is called NEGLECT! Perhaps you should put a detailed piece on your site about how to properly care for your vessel to reduce MASSIVE depreciation by NEGLECT.
You STILL missed my whole point after reading that and I will not address it again if your reading comprehension has not yet picked up on it.
In 2001 a new 310 was about 92-97k now they are asking 69k that is an asking price of less than 30% depreciation over EIGHT YEARS!!! Again following your "blanket" applied depreciation schedule, for new boats, it should look like this:
Year 0 97k purchase
Year 1 -30% = 67.9k
Year 2 -20% = 54.3k
Year 3 -10% = 48.8k
Year 4 -10% = 44k
Year 5 -10% =39.6k
Year 6 -10% =35.6k
Year 7 -10% =32k
Year 8 -10% =28.8k
Please re-read my post and see if you GET where we disagree? As I said before BOATING IS EXPENSIVE but your depreciation schedule is flat out OUT OF WHACK when used in the fashion you did, as BLANKET STATEMENT. Remember I used your own 2001 reference boat as an example above to display test your model and show just how off it is. Blanket statements like that will scare people away from boating!
This is all I ask of you and I noted that you purposely left it out of your above post:
Quote:
Originally Posted by Maine Sail
Perhaps saying: "First year depreciation, depending upon location, boat and how you maintain it, could range from as little as 3% to as much as 30% and second year depreciation could range from 3% to as much as 20% and year three and beyond can range from about 1% to 10% per year". Blanket statements, that scare folks, are not what we need to grow this dying sport!
If you maintain your boat to a high standard, which DOES cost money, you will and can minimize losses. If you treat your boat like a floor matt then it will be reflected in your tail end losses...
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You state this stuff like it is fact when it is not and there are many variables that come into play, as you yourself have admitted to and stated. My neighbor sold his Sabre 362 for 32k more than he had into it, at the end of the first seasons ownership. At the time Sabre could not build them fast enough and a guy contacted him and made him an offer he could not refuse. Your statement of fact to assign a 20-30% depreciation for the first year is NOT standard. Can it happen yes but in more cases than not the boats retain value much better than that. I suggest you get a password to Soldboats.com and do some research using actual data used by the industry before making blanket statemenst of fact to "newbies" who may actually belive this to be true in ALL cases...
Here's how you came on here and your statement written as fact:
Quote:
Originally Posted by CaptainFredGreenfield
DON'T FORGET DEPRECIATION
Assign 30% depreciation for the first year on a new boat, 20% for the second year (Or the first year on a used boat ) and 10% (of the original price) for each year thereafter. At some point the depreciation will taper off, but the maintenance will escalate to make up for it.
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here's where you are now (if your initial data set was good why the change?):
Quote:
Originally Posted by CaptainFredGreenfield
DON'T FORGET DEPRECIATION
Assign 20-30% depreciation for the first year on a new boat, 10-20% for the second year (Or the first year on a used boat ) and 5-10% (of the original price) for each year thereafter. At some point the depreciation will taper off, but the maintenance will escalate to make up for it. For the sake of argument, I will remain conservative and use the maximum depreciation scale. These numbers are adjustable by the boat - some will be 25% less depending on the covetability of that boat.
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Neglect and depreciation are not one in the same. Neglect results in depreciation but all things being equal all boats DO NOT depreciate by 20-30%, as you factually stated they do in the first year.
Do you consider crashing your car into a light pole in the parking lot, and not fixing it before selling it, depreciation? Sure it resulted in a loss of value, for the reason of neglect, but it is not normal depreciation as defined by NADA, or KBB. The same can be said for a boat. If an owner rubs the dock every time he comes in and does not fix the damage or rips a sail and does not fix it or does not change zincs and ruins the engine this is neglect which causes a loss in value. This would not be a NORMAL depreciation schedule as defined by the IRS.
If I wreck my company car, do not fix it, and then sell it at a loss and it has not yet depreciated by IRS standards I can't take the additional neglect loss.. You are confusing loss in value by neglect and normal depreciation of a below average, average or above average condition vessel. A truly neglected boat does not fit into a below average condition category, it falls into a neglected category. Depending upon the level of neglect the sky is the limit on loss where it is generally not for a below average, average or above average boat..