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Old 02-05-2009
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Buying new boats in this economic environment?

Hi all,

I am curious what people think about the risk of this these days. We all know markets globally are terrible. Boat builders are on the ropes. Now maybe this bodes well for getting some good prices. On the flip side though, I see the risk that you get xyz co started on your boat and 3 months into it the company is out of business. What do you do then?

For instance, Poncin Yachts is currently working under creditor protection (extended to May 31 2009). So if you were thinking of getting one their new Catana's which are fairly popular cats, would you be happy placing an order for one? Now they mentioned in a press release that they got a few boats sold at the Paris boat show and thats great - but what are those buyers doing to protect themselves that a boat can even get completed?

I am not picking on Poncin/Catana here, it is just one that I know is operating under creditor protection as it is a public company.

So, you find your dream boat, its new, shiny and has everything you think you would like. Do you risk it in this world with a builder? How do you protect yourself? How do you know whats going on when it isn't even a public company (like Poncin). For instance, I quite like the look of the new Outremer 49. Well how the heck do you know what is going on financially there to ensure you would get your boat completed? What kind of contracts do people need to get put in place to protect themselves?
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Old 02-05-2009
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The other thing to be concerned about is a boatbuilder in distress taking shortcuts on their boats. Just like the builder of my house (who went out of biz half way through building my neighbors house) forgot to put re-bar in my foundation. If you lose a fat deposit, you may be lucky compared to the last guy who actually took delivery.
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Old 02-06-2009
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Live in France/Maine/South Africa/Chile for a year and offer to be a worker maybe? Catch is, visa's run out in 90 days for most and you definitely can run into issues (tax) at 180; not to mention working in a foreign country (even if its working on your own boat for 'free').
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Old 02-06-2009
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My family has gotten through the current mess in very good shape BUT we feel there was a LOT of luck involved in not getting a job with the wrong company

I can't bring myself to do anything right now that i can't do with cash and as we get in the 50+ age group planing a decent retirement has become are #1 item
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Old 02-06-2009
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I would be hesistant to buy a new boat, that hasn't been built yet, from a builder that is having financial issues. Cutting corners is one risk. Losing the deposit if they do go belly up is another. Putting the money in escrow would be one way to help protect yourself, but many boat manufacturers would not agree to that, especially if they're strapped for cash.
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Old 02-06-2009
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If I were in a position of dropping 50 or 100 K for a deposit on a new boat; I would demand a completion bond just to be on the safe side. That would be as good as escrow; but not tie up the cash for the builder.
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Old 02-06-2009
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If you search the Pacific Seacraft email list archives and also google the history, you'll see that company's recent bankruptcy and some pretty clear examples of what happened to those hefty deposits. Even folks who'd paid for the majority of their boat (and were given authority over it by the court) chose to allow the unfinished boats to go to auction with the broader company -- understandable, but ultimately a poor decision.

The only guy who did well was the guy who bought the company -- now debt free -- for less than 150K! The near finished boats were worth far more than that -- let alone the intelectual property rights to the PSC-31 C-34, C-37 and the PSC40. Throw in molds for everything from the Orion to the Flicka to the Ericson line . . .. Sheesh! You can see why the guy in Pretty Woman made his money by breaking up companies not saving them! I think its awesome the new owner is trying to save PSC but would you want to be a start up sailboat builder in NC these days?

Back to your question: I think you could draft a contract which placed title to the unfinished boat in your hands early on and which calls for progress payments based on work completed -- with the builder always more invested in the boat than you the buyer. That said, the PSC problem of "who wants to finish an incomplete boat" can't truly be conquered. You could ask for personal insurance from the owners . . . yada yada yada. No great solutions.

If you really want new, I'd try to buy an unsold 2008 ata big discount.
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Old 02-06-2009
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what about ongoing support?

Of course the first issue is getting a completed boat in the end... but what about a year down the road when you have a technical issue and the company no longer exists? Who do you call?

It seems the decision is first about how badly you need a new boat right NOW and how long you might put it off to see what happens. Beyond that, there are a lot of boat builders out there and a little research might prove that there is one that is more solvent, and will have a better chance of remaining so, through these economic times. So, along with the standard questions about design and construction, it would also be prudent to do a little inquiry into the people who make up the business side of the company. Perhaps a little more cumbersome with a private company as opposed to a public one, but in this age even with just a little digging you have all kinds of information at your fingertips. So, I say, google away!
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Old 02-08-2009
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I'd be worried about the resale value or depreciation also. The question would be why "new". There are so many near new boats on the market at steep discounts it really can't make sense right now to build. Catana is an example. Look at how many are on the market (80) and the turn rate. You can buy a one and sail for two years straight with the savings from new.
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Old 02-08-2009
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Going through the prices of these used boats though I am not seeing anything remotely attractive for pricing compared to new.

For instance, the first Catana that shows up today for me at Yachtworld is a 47 footer vintage 2000 at 365,000 gbp or 536,000 usd and a second 2000 is 385,000 gbp or 565,000 usd. Real money here. I don't know the price of a new Catana in that size. I do see the new Outremer 49 is around 640,000 usd. Well Yachtworld has a 45 2004 for 512,000. So 128,000 gets you 5 year newer (well brand new) boat and larger. The only reason I could see the 45 might compare is if the older used one had scads of new high end gear/electronics onboard (and relatively new). So thats why I think new might very well be attractive - the used prices look like jokes to me compared to some of the new prices I am seeing.
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