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-   -   How long to depresiate? (http://www.sailnet.com/forums/boat-review-purchase-forum/5629-how-long-depresiate.html)

acmecoyote 11-23-2002 10:24 AM

How long to depresiate?
 
Was wondering is there was a rule of thumb when a sail boat is to depresiate? I know it will have to lose some after being new. But will it be 2,3,4, or 5 years before the big hit?

Just curious as to compare a new vessel with the same price as a used vessel. The old one is ten years old with no warranty, but am sure it has fallen down to a steady price. The new one comes with warranty, but unsure how much of a hit I might take after two years of ownership.

Any ideas?

Jeff_H 11-23-2002 12:49 PM

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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