Asking Prices and Book Price - SailNet Community
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post #1 of 1 Old 11-29-2000 Thread Starter
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Asking Prices and Book Price

Used production boats in the 40-foot range often have asking prices 20 to 30 percent higher than BUC retail prices. Are asking prices really that much higher than sales prices, or are the book prices unrealistically low in today's market?

Jon Shattuck responds:

While I am sure the valuation guides for boats are doing their best to keep track of the boat market, they currently do a poor job of it. Even though such guides claim they do not use an across the board adjustment, higher-quality boats tend to sell above 'book' values and lower-quality boats tend to sell below the 'book' values. My feeling is that higher-quality boats last longer, are therefore more sought after, and thus hold their value better. Some even appreciate! Lower-quality boats fall apart sooner, are therefore less sought after over time, and depreciate accordingly based on these facts. This is the law of supply and demand hard at work.

Car valuation books probably do a better job of following the real market for two reasons—there are many more cars to track and cars have a limited number of variables and options which influence their value. Boats, on the other hand, are fewer and have oodles of variables such as location, use, and condition. In addition, boats have many more options such as sails, electronics, and canvas.

Lastly, selling prices on used boats have been trending upward over the last few years. Why? Supply and demand again. Boat buyers generally look for boats in the 10-year-old range, and in the late 80s and early 90s, the boat-building industry was in the dumps. The then poor economy coupled with the luxury tax put about 50 percent of boat builders out of business. The result 10 years later is a low supply of those models. The current market is quite healthy, so now we have high demand. The boat builders who survived the downturn wisely raised their quality and prices, but not necessarily their production capabilities—they well remember the effects over-capacity had on the business and stay prepared for the next economic downturn. The resulting higher new-boat prices helped pull the price of used boats up as well. Not only are the asking prices significantly higher than the 'book' values and up compared to the market 10 years ago, but boats are selling closer to (or even at) those asking prices. Don't worry, the boat-pricing guides will catch up soon enough.

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