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Old 11-06-2006
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The Joys and Pitfalls of Buying a New Boat - Part 1

The Joys and Pitfalls of Buying a New Boat

Who can deny the pleasure of stepping on board a brand-new, purpose-built offshore cruising boat? The special smell and feel of fabrics, finishes, and gear touched only by those who assembled them just for you, customized features that are exactly what you desired. The respite from maintenance that comes with having all-new equipment. With luck, you should not have to spend a lot of time changing this boat or repairing its gear for three or four years. “New” gives you the feeling that you can set off cruising almost as soon as you load the provisions. If you can afford this luxury, it is important to make sure the purchase goes smoothly and the experience is emotionally rewarding. But it’s not everyone who has this opportunity.

To compile advice for fortunate new-boat buyers, we spoke to five well-known yacht designers, and also to several dealers, builders, insurers, and finance people, in the United States and the United Kingdom. Each confirmed that if you have cash limitations, it’s difficult to justify buying either a new production boat or a new custom-built boat. Chuck Paine, known for the Morris cruising boats, Cabo Rico 40, and others, states, “The premium you pay for buying new compared to buying a boat a few years old is at least 30 percent – maybe more when you consider the costs for the bits and pieces you’ll usually get with your secondhand boat (shackles, fenders, lines, etc.).” chuck went on to say, “This is probably an appropriate investment for the person who is working long hours, earns good money, and feels he has little time to deal with working up a secondhand boat. But even with a new boat, there is still a lot of work and time involved in bringing it up to snuff.”

On the other hand, even though “new” is part of the whole cruising dream for many people, it can be emotionally and financially risky unless you have already owned and sailed several different boats. Each of the designers we spoke with confirmed that a significant number of the buyers who bought an offshore cruiser as their very first sailing boat found the purchasing and commissioning process to be difficult.

Nancy Cann, owner of Crusader Yacht Sales, Annapolis, Maryland, representing Pacific Seacraft, agrees: “People who have never before owned boats, then buy a brand-new 34-to 40-footer (10.4-12.2m), are often distressed at the steep learning curve they face.”

Even experienced sailors have more problems than necessary when they decide to get their first brand-new production or custom-built boat. Bob Perry, designer of the Baba 30, Valiant 40, and Tayana boats, says, “I cannot believe the number of successful contractors who will enter into a boat-buying deal they would never consider in their own line of business.” We agree. It must be because boats are about dreams, about pleasure and freedom from the pressures of workaday worlds. The majority of people you meet around the waterfront are friendly, warm, and welcoming. In this relaxed atmosphere, it can seem out of character and maybe even a bit rude to come on like a hardnosed businessperson. But there are just as many rogues in the marine business as in any other, just as many salespeople interested more in their commissions than your sailing dreams. But, unlike the mass-market automotive or airplane industries, the sailboat business is virtually a cottage industry, as these figures show:


New cruising/racing sailboats sold in the USA in 2000.
(The most recent survey available)

20 to 29 feet in length 1,926
30 to 35 feet 921
36 to 40 feet 671
41 to 45 feet 370
46 to 60 feet 234


Source: North American Sailing Industry Study

Bluewater cruisers make up less than 25 percent of these figures in the under-45-foot range. With limited numbers like these, it is easy to understand why there is no funding for a sailboat consumer-protection organization, no pressure for a governmental agency to regulate sailboat construction, and no design and equipment testing agency such as the FAA (Federal Aviation Administration) in the airplane industry or the NHTSA (National Highway Traffic Safety Administration) that regulates the automotive industry. Anyone can set up a company to build or design boats; no qualifications and financial bonding are required. Two British designers agreed, noting that the situation is similar in the Britain. One went so far as to say, in regard to boat construction, design, and equipment innovations, “It’s the Wild West out there!”

Because this is such a small industry, builders cannot afford to spend much money conducting tests on hulls and equipment. So you, the boat buyer, end up doing this free of charge. (Basically, what happens is that if and when things break on board, you have to expedite the repairs or return the gear to the factory. This is only a hassle when you are near the source, but in Fiji or Tahiti, it is a super pain in the transom!)

Then there are the financial arrangements. No standard escrow procedures cover the boat buyer, no bonding company protects your deposit, as in a house purchase. The deals that go wrong are common enough that magazines such as Practical Sailor (USA) and Practical Boat Owner (UK) and others have devoted major editorial space to stories about dealers absconding with large deposits, about builders using a new customer’s payments to complete a previous buyer’s boat, about legal battles among buyer, designer, and builder, about companies going broke or raising the prices during construction.

Although we cannot cover every contingency of this very serious and complex transaction, the following pointers will give you parameters so you can comfortably heed the important warning, caveat emptor (buyer beware). You might also find the information in chapters 2 and 3 of our book, Cost-Conscious Cruiser which discuss parameters for choosing a cruising boat, to be helpful. (available at most marine bookstores and online at www.landpardey.com)

Production Boats

1. Research and evaluate different designs, different builders, and different dealers, just as you would when buying secondhand. But also ask for the name of five or six recent customers. Nancy Cann warns, “Make sure you speak with people who have dealt with both the broker and the boat builders within the past year. Things change fast in the sailboat building industry – sometimes for the better, sometimes for the worse.”

2. Don’t be lured by prices that look like bargains – i.e., the biggest boat for the least money. Try dividing the base price of the boat by the designed displacement to arrive at the price per pound. This is a more effective measure of a boat’s true construction costs – and far better for comparison than dollars-per-foot-of-length. If one boat appears significantly lower per pound, be cautious and establish how the cost savings were achieved. Sometimes it could be by cutting quality or by lower labor cost; if you are truly comparing similar-quality boats, built for similar purposes, the prices per pound should be pretty close.

3. Be willing to pay extra for a company’s reputation. Simultaneously, though, be sure the same builders and managers are running the company. As Barry Van Geffin, managing director and designer for Laurent Giles, UK, told us, “Just in the 1990s, Westerly Yachts, who build to some of our best-known designs, went bust twice. Then the molds and rights were taken over by new people. Not much we designers can do to ensure the new company builds to the same quality.” This is true world-wide. Companies such as Hinckley and Pacific Seacraft in the United States, and Dufour in France, have changed hands in the past few years. This may or may not have affected quality standards.

4. Research the builder’s credit standing and financial backing any way you can. Do the same for the dealer who is handling the transaction. Andrew Simpson, roving editor of Practical Boat Owner and a boat designer/ builder, cautions that the financial ups and downs of a company can cause variations in the quality of the boats they build: “When things are good, they pay for better help, buy higher quality gear. When things are bad, they can cut down and the customer may not be able to spot the differences.”

5. Consider hiring a surveyor or professional boatbuilder to go over the display model you are interested in buying. check each item on the specifications list with him. This is important even for boats in the top-quality range. If you do not spot problems until after you have signed the purchase agreement, it will probably cost you to have them put right. At one recent London Boat Show, we went on board the “best of show” bluewater cruiser. There we found ball valves threaded directly onto the through-hull fittings. A surveyor would have demanded the more reliable, stronger arrangement of a through-hull fitting threaded into the body of a proper seacock with a flange bolted securely through the hull.

6. Resist rushing the purchase process. Once you have decided on the boat and basic equipment, spend several days considering the specifications list and the pros and cons of your choices.

7. Resist the urge to change the standard boat. Not only will this drive up the costs, but the complexity and close spaces in any cruising boat mean that each change affects the whole. Unless you actually can mock up the new idea in an existing boat, you might find, for example, that “just moving that bunk a few inches” gives you a more spacious-feeling sleeping area, but it also means engine access becomes impossible.

8. Avoid being the owner of the prototype of any new production boat, either with a start-up company or an established builder. In the first case, the company could go broke before you get your boat. In the second, you will, as we said before, be “doing the testing for future boats.” We delivered two different first-off-the-line offshore boats for two different companies and in each case sent back substantial lists of installation and equipment problems. We later learned that one of the companies was building boat numbers four and five using our suggested modifications.

9. Avoid built-for-the-boat-show boats. Dealers and builders may offer you special options at reduced prices if you buy their demo boats. But John Burgreen of Annapolis (Maryland) Yacht Sales warns customers to allow 30 days’ leeway for boat deliveries. Boat-show demos must be on site on a specific day, ready or not. So these boats often are rushed to completion, and technical details may have been overlooked, or the installed options may not be what you really wanted or needed.

10. Resist the pressure to buy more gear “at the factory.” Ted Brewer, known for his Whitby 42, Niagara 38, and others, says, “Avoid the equipment trap, avoid problems, keep more money to get out sailing sooner.” Not only can factory-installed extra equipment push the price of the boat ever upward, but as he cautioned, the yard crew might not be the best people to install the gear. Furthermore, once you get out on sea trials, you might have different ideas about what gear you want and need. This is especially true of electronic gear, for which prices could drop drastically between the time when you signed a contract for a new boat and actually are ready to set off cruising. The GPS (global positioning system) is only one example of this – changing within three years from bulky, power-consuming $2,000 units to miniature, relatively low-power-consumption units costing less than $200.

11. Hire a surveyor to check the layup of your hull as it is built, then as bulkheads are bonded in place, and again when the deck is being bolted on. Many yards will resist this, as it slows production unless scheduling is arranged beforehand.

12. Have your surveyor check the installation of all of the boat’s systems when it is commissioned, and before you hand over final payment. Although the vast majority of new hulls are unlikely to present problems, the complexity of systems on today’s boats can mean that even the most competent builders and dealers can overlook poorly installed plumbing, wiring, and sailing gear. We delivered a well-built new 39-footer, commissioned by a well-known broker for a personal friend in Mexico. Halfway down the Baja California coast, the loose engine wiring harness melted when it landed on the engine manifold. Two days later, the pad-eye for the
"Even experienced sailors have more problems than necessary when they decide to get their first brand-new production or custom-built boat."
boomvang/preventer pulled up, bringing a 4-inch-by 6-inch patch of fiberglass with it. Someone in the factory had neglected to put nuts and washers on the pad-eye bolts. These two details might have been caught by a surveyor, or by a builder who was aware his boat was going to be inspected by the surveyor before the final payment.

13. Arrange to take delivery of your boat at the dealer’s location or as close to the factory as possible, and do your sea trials nearby. No firm – not even the most reputable – can be sure of delivering a trouble-free boat. The dealer or factory will be reluctant to pay another yard several hundred miles away to fix an oversight – not only because of the extra cost but also because it could hurt their reputation. One winter several years ago, we delivered three brand-new boats for the same broker. Two were factory-fresh, never seen by the owners until we sailed them from Miami to Puerto Rico. When we arrived, we had a two-page list of problems: some minor glitches such as missing door catches, rusting hose-clamps, blocked drains, but also more serious problems including poorly designed chainplates and bits missing in the rigging. The third boat had been sea-trialed right near the dealer. Then the owner spent a month gunk-holing around Miami, returning the boat to the dealer for a few final adjustments before we picked it up to deliver it to his home in New York. The owner commented, “I saved more than the cost of your delivery fee by being able to work right with the dealer, and this made the whole project a lot of fun!”

14. When you sign the sales contract, arrange to hold back 5 or 10 percent of the boat’s price until after you have done all your sea trials. This gives you leverage should there be details that need attention.

15. Spend at least a day going over the boat with the dealer or factory rep before you take it for the first sea trial. Before you go sailing, take photographs of anything you feel could be questionable. Otherwise, it is hard for the dealer to be sure things were not broken during the sea trials.

16. Don’t plan to begin your cruise too soon after the delivery date of your boat. John Burgreen of Annapolis Yacht Sales cautions that anything from fires at the factory to trucking disputes can hold up delivery. His firm and crusader Yacht Sales both offer a 90-day final inspection to catch any last factory bugs. Add to this the time you’ll need for familiarizing yourself with your boat and outfitting it properly and you will understand why most people find they should figure at least nine months from the factory delivery date before they can enjoyably set off cruising.

17. Be even more careful about the finances of new-boat buying than you would about home buying. Each dealer, each manufacturer with whom we spoke seemed to offer a different purchase arrangement – from 10 percent at time of order with 85 percent on delivery and the final 5 percent after dealer debugging to three progress payments with the total due before the boat was launched. No one could suggest a secure way to recover your money should the boatbuilder go bankrupt or refuse to deliver your boat for some reason. A letter of credit could offer some protection, but most U.S. and UK boatbuilders are working on such tight margins, such tight production schedules that they would balk at this arrangement. But there are two ways you might protect yourself. First, make sure you are assigned a specific hull number and that all payments and invoices include this number. Next, be sure the number is on the hull at the factory, and get a photograph of it. Then create the legal documentation to be sure that your boat, at every stage of completion, is and remains your property in the event that the builder should go bankrupt. One way to do this in the United States is with a Uniform commercial code form (Ucc). This document secures ownership of the boat in your name during construction and costs approximately $50 (forms are available from state offices or from most boat finance companies). Second, make sure your progress payments are designated for the completion of specific building stages, not just specific dates. Link the payments with definable steps, such as lay-up of the hull, with installation of the bulkheads and deck. Inspect your hull to be sure this stage is satisfactory before you send the next payment. Should the builder go broke, these measures and your Ucc form are the best you can do to insure and protect your investment.
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Old 11-16-2006
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Exclamation Good luck with a new boat

I may have been lucky,but I bought a new production boat nearly 9 years ago. I've lived aboard since and sailed it to Bermuda from the US coast and sailed from the Chesapeake to Maine offshore. It's built by Beneteau. Rather than the biggest boat I could afford, it was the smallest that would be big enough for what my wife and I wanted. We got a deal at the boat show that added necessary instruments, a bimini and an Avon dingy. Since then, we've added SSB, radar, a wind generator and solar panel.

In the past 8+ years, we've had a few issues, but they've been few and relatively inexpensive. During that same period, friends have bought quality used boats at what appeared to be reasonable prices. Since then, they've spent lots of cash and time getting their boats seaworthy and keeping them that way. these issues have included new standing rigging, rebuilt generator, replacing pumps, hoses and an oven. upgrading old instruments with those of the quality I have, rebuilding transmissions and starters, major wiring tasks and blister repairs and new barrier coats. Lots of the work they did themselves to save money. Some of that work I couldn't have done. But I'm learning.

One of the advantages for me is that, with a new boat, the problems come more gradually, giving me time to gain the knowledge to address the issues. I'd have been overwelmed with the issues my friends were forced to deal with.

My boat isn't ready for a world cruise, but neither am I. If I ever choose to do that, I'll prepare myself and the boat for the adventure. So many of the books I've read suggest that without a $350,000 boat (perhaps bought used for $175,000 and the spent another $75,000 on upgrades). The Pardey's didn't do that. Perhaps nobody wants to be liable for urging sailors to go out with less than the perfect offshore boat.

Just a thought.

Bob
Carpe Diem
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Old 11-16-2006
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We are thinking bout buying a Hunter 216 or a Prcision 18 with weighted keel. We are just recreational sailors (no racing) and sail on a resorvoir. Has anyone had experience with these boats? We want a very stable boat with seats that are deep so we can stand easily and move around. (We are 63 and 70 years old) Also we want a large cockpit to take friends sailing. We had a 16.5 Catalina Capris which was destroyed in a storm last June.
Karen
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Thumbs up the motersail i suggest

Fase Navigator 32' has a6'2'' headroom in gally & pilot house great livaboard!
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Old 10-24-2010
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A Wise Man Once Said...

Quote:

Rather than the biggest boat I could afford, it was the smallest that would be big enough for what my wife and I wanted.

Bob
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Old 10-24-2010
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Its an old post but valid information indeed.

Wonder why they don't post here more often?.......................to famous I guess, and want us to buy their information now.
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The purchase price of a boat is just the admittance fee to the dance...you still have to spend money on the girl...so court one with something going for her with pleasing and desirable character traits others desire as well... or you could find yourself in a disillusioned relationship contemplating an expensive divorce.
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Old 10-24-2010
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[QUOTE=rclemons;90989]

I may have been lucky,but I bought a new production boat nearly 9 years ago. I've lived aboard since and sailed it to Bermuda from the US coast and sailed from the Chesapeake to Maine offshore. It's built by Beneteau. Rather than the biggest boat I could afford, it was the smallest that would be big enough for what my wife and I wanted. We got a deal at the boat show that added necessary instruments, a bimini and an Avon dingy. Since then, we've added SSB, radar, a wind generator and solar panel.

In the past 8+ years, we've had a few issues, but they've been few and relatively inexpensive. During that same period, friends have bought quality used boats at what appeared to be reasonable prices. Since then, they've spent lots of cash and time getting their boats seaworthy and keeping them that way. these issues have included new standing rigging, rebuilt generator, replacing pumps, hoses and an oven. upgrading old instruments with those of the quality I have, rebuilding transmissions and starters, major wiring tasks and blister repairs and new barrier coats. Lots of the work they did themselves to save money. Some of that work I couldn't have done. But I'm learning.

...
Bob
Carpe Diem[/QUOTE]





Hey, Sailingdog, I know that this guy had posted this four years and probably is not around anymore, but hell, I agree with what he says LOL.

I had a similar, experience, I bought a new boat in 2002, sell it 7 years and more than 10 000 miles later and had almost no problem, except regular maintenance (by the book). I had also the traumatic experience to sell it and I am well aware of what you lose (in money) by buying a new boat instead of a new one.

I also agree with the Pardeys when the say:



"Who can deny the pleasure of stepping on board a brand-new, purpose-built offshore cruising boat? The special smell and feel of fabrics, finishes, and gear touched only by those who assembled them just for you, customized features that are exactly what you desired. The respite from maintenance that comes with having all-new equipment. With luck, you should not have to spend a lot of time changing this boat or repairing its gear for three or four years. “New” gives you the feeling that you can set off cruising almost as soon as you load the provisions."



I would even say that mass market boats come with such a long list of extras that you can have "your boat" your way, and that pleasure will be almost has intense with any new boat, and according to rclemons and mine experience, we are not talking of "3 or 4 years without problems", but of seven or eight years without major problems (or more, I don't know I have sold my boat LOL).

On other hand, a new boat will lose almost 50% of its value on 7 or 8 years, and that's a lot.

Rationally I think the best bargain you can have is buying a 3 to five years boat in very good condition, that way you still have four or five years without problems (hopefully more) and can have a cut in price that can reach 30% or more on the boat value.

Well, rationality has not much to do with the pleasure of having a "virgin" boat LOL. That's like love, no rationality evolved, but its certainly a very good thing, a thing where you cannot put a price tag. So its up to each one to decide if the pleasure values the cost. Love is always expensive LOL.

Regards

Paulo

Last edited by PCP; 10-24-2010 at 04:59 PM.
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Old 09-27-2012
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Re: The Joys and Pitfalls of Buying a New Boat - Part 1

Can anyone suggest a good book, magazine, articles, etc., to read for people such as my husband and I who are new to the sailing world, and want to purchase a used boat. Reading this page has brought to my attention the fact that we may be walking into a money pit if we buy old. We can't afford much, and truly can't afford a NEW boat, but would like something that we can live aboard and sail the Caribbean, through the Panama Canal, down to Ecuador, over to the Galapagos, etc. This may seem a bit ambitious for newies, but we figure, in our 60's we don't have a lot of time to lose. I'm just concerned we'll end up with a lemon, and it will eat up what little savings we have. That's not my idea of a free and easy retirement. Any suggestions?
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Old 09-27-2012
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Re: The Joys and Pitfalls of Buying a New Boat - Part 1

[quote=dsullyec1;927316]Can anyone suggest a good book, magazine, articles, etc., to read for people such as my husband and I who are new to the sailing world, and want to purchase a used boat. Reading this page has brought to my attention the fact that we may be walking into a money pit if we buy old. We can't afford much, and truly can't afford a NEW boat, but would like something that we can live aboard and sail the Caribbean, through the Panama Canal, down to Ecuador, over to the Galapagos, etc. This may seem a bit ambitious for newies, but we figure, in our 60's we don't have a lot of time to lose. I'm just concerned we'll end up with a lemon, and it will eat up what little savings we have. That's not my idea of a free and easy retirement. Any suggestions?[/quote]

I would suggest buying a relatively cheap live aboard boat now and sailing the bejeezus out of it locally for a year or two (at least). Get used to the whole idea of living on a boat, and hone your sailing skills, while you figure out just what sort of boat will meet your needs. Then, when you do start looking for the boat you're going to take on "the big adventure" you'll be in a much better position to get right boat, AND you'll be much more likely to have the skills necessary to complete your voyage. Otherwise, you could easily leave in the wrong boat and without the experience you need to stay relatively safe.
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Old 09-28-2012
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Re: The Joys and Pitfalls of Buying a New Boat - Part 1

What you say makes a whole lot of sense. Can you suggest what types of things we need to look out for on a used boat? We know a little, but I know there are lots of things we need to watch for. One man we met in a boatyard in St. Maarten said not to pay for a survey, but to have a friend or someone who knows a lot about boats look the chosen boat over, checking all the main things using as much as they know about boats and then buying him dinner at a fancy restaurant or something equally as nice.
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