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Everyone knows that when you buy a car it depreciates the minute you drive it off the lot. Do boats appreciate or depreciate? Boats depreciate over time unless you buy a used classic that is in demand on the collector’s market.
This is something you should consider before you start applying for boat loans. Will the boat hold its value until you pay the loan off?
Boats depreciate more slowly than cars do, but their value does go down as the years go by. Owners can slow that decline by performing regular maintenance and adding improvements and upgrades to the boat.
Demand is a factor too. It’s on the rise right now, so you may be able to get a higher price in a private sale even if the book value is lower.
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Used Boats Hold Their Value Longer
New boats experience the highest depreciation rate in the first few years after they’re sold by the boat dealer. Used boats have already lost significant value, so their depreciation rate is much slower.
It may even have stabilized in some cases, meaning you won’t lose value no matter how long you own the boat. Those are the deals you’re looking for.
Let’s say you’re in the market for a 21’ Bayliner that’s twenty years old. That’s a purchase you can make for under $8,000. If the boat’s been well taken care of, you’ll be willing to pay more.
If it needs work, you’ll pay less but might be able to increase its value with some general maintenance and repairs. That $8K purchase could be worth $10K by the time you’re done.
With minimal upgrades, your Bayliner could still be worth what you paid for it five years from now. That won’t be the case if you buy a new boat. You’ll be lucky to get 70% of its value when you pay it off on a resale or trade-in.
That doesn’t mean you shouldn’t buy a new boat. It’s just something you should know before you start boat shopping.
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The Type of Boat Matters
Luxury boats like sailboats and yachts depreciate slower than pontoons or fishing boats. After three years of ownership, they’ll typically maintain about ninety percent of their value. Standard boat values drop by 25-30% within the first two years.
That’s because inventory for luxury boats is low, and demand is always increasing. Can you see the pattern here?
Unique luxury boats with special features may go up in value over time. This could also happen with a fishing boat if you add sonar, fishing chairs, and riser mounts. Contact a boat appraiser if you’re not certain about how to do this.
They’re experts on features you can add to your boat to help it appreciate. You can obtain guidance before making any upgrades.
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Used Boats Can Be Bought With Personal Loans
Another factor to consider when buying a boat is the source of your financing. New boats typically require dealer financing or a specific boat loan from your bank.
Used boats for under $10,000 can be purchased with a personal loan. That could be a better option because a personal loan can be used for accessories and supplies also.
We believe this piece has provided sufficient advice on if Boats Appreciate or not.
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