Boat pricing

I am in the market for new/slightly used 24 ft BR/DB. I tested a lot in Sept and Oct. I went to every dealer in my area and never saw another customer looking at boats....business is real slow and every boat we looked at is still available. I am now ready to make a purchase and all the boats we saw 4 months ago are still there. They also have the same crazy pricing - 20%-30% over NADA. Am I missing something here. These guys can't expect me to pay those prices and I am somewhat offended at such a bogus starting point. It seems they do not want to move the inventory. Anyway, what kind of experience have others had on this issue? And what % of MSRP have others been paying for new boats...I am thinking very heavy discounts.

Re: Boat pricing

1st where are you? location has a lot to do with pricing. personally i would make an offer 10-20% below NADA.

Re: Boat pricing

I am in Atlanta, Actually made on offer on a repo in Oct. Offer was NADA, asking was about 30% higher...bank turned me down. Called back 30 days later and was willing to meet half way. They would not even loan 80% of what they were asking. I just can't figure out the boat pricing.

-Lake is dry, fuel is/was high, economy is bad, we have a discretionary/luxury product, let's keep prices high and ignore our building/idle inventory.

Re: Boat pricing

when the floor plan interest, really starts to bit them, they will negotiate.

Re: Boat pricing

when the floor plan interest, really starts to bit them, they will negotiate.

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i think that's it too. all biz needs cash flow... there's a point where ya gotta have some. even if it ain't as much as ya need.. that will work for you in the negotiations i'd think.....

Re: Boat pricing

Don't budge. You should be looking to pay 25% to 30% below NADA. Don't let them give you the bull about falling fuel costs either. Boats arn't moving because of the economy. Loans are hard to get and very few have the extra $ for a vessel. Gas prices could begin to jump up just as fast as they went down. You may be dealing with brokered boats. The owner wants ($) and the dealer adds on their commission. Some dealers are no longer brokering boats valued above what they feel they can sell them for. In the NE, some dealers are now charging a storage fee to broker a boat. They feel that some sellers are simply using their brokerage for storage. A % of the storage fee gets refunded when and if the boat sells. I know of two marinas in CT. where owners are being told to remove their vessel due to the fact that they are asking far more than the market will fetch. It's not getting any better for sellers. There are thousands of good deals out there. Start your offer low and work up slightly. If they won't deal with you, WALK!!!!!!!!!!!!!
Nightstalker

Re: Boat pricing

Check craigs list. WWW.craigslist.com, select atlanta and then boats.. check the following out, http://atlanta.craigslist.org/boa/964869865.html. I've always found Starboard Marine, and Stovall (marinemax) to be a little high priced for what they had on the yard.

Re: Boat pricing

What NIGHTSTALKER said. walk away, go back in the spring. FRED

Re: Boat pricing

And remember the dealer is on the "hook" to the manufacturer for the invoice price (dealer cost). Most boats are sold at a 20-25% margin with a big chunk of that coming from the engine, trailer and rigging...

If a dealer sells you a boat for 20% under msrp he's likely lost money as he's been paying "floorplan" interest on it for several months.

Go to 25-30% and he's paying you to lose money. It's also why so many are going under... they have no cash, If they sell a boat they have to pay out more than they're taking in... so they're actually increasing their debt position by selling you a boat.

Surprising how many folks don't realize that. I promise you if they thought they'd break even at this point they'd move the boat, but losing money on a new boat is double stupid from their viewpoint.

Re: Boat pricing

The dealers are in a tough position either way - if they sell low, they lose money and if they hang onto the boats, they have interest expense and still lose money. They also end up with boats that will never fetch MSRP because they become "last year's" models.

Sometimes you have to cut your losses, and since this is a buyers market, that's just reality.

Re: Boat pricing

Sometimes you have to cut your losses, and since this is a buyers market, that's just reality

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Yes, however the reality from the dealers perspective is if he sells a boat below what he's contracted to sell it for, the payment for that boat is due the day he sells it.... so you buy a boat and he has to write a check for more than you paid him.

Why bother? yes there's interest expense but if I'm going to go under I'm going under with a much cash as I can hold on too. That's cash that he can't make payroll with or pay the rent or light bill with.

It's just not as cut and dry as most guys make it out to be.

A major dealer here recently announced that they'd be closing their doors in the next few weeks. The manufacturers he represents will be hauling dozens of boats either back to their factory or assigning them to other dealers without "flooring" as the other dealers don't want them unless it's on consignment. Even then they'll likely just be storing them for the factory and nearly no one is buying new boats. Primarily because the banks are demanding 30-50% down payments and NOT allowing you to add "extras" to the financing.... boat, motor and trailer only.

The zero or 10-20% down and adding electronics, kickers etc. days are over.

Re: Boat pricing

I don't think the boat dealers and manufactures are as smart as some suggest here. There is a correction going on now and they need to respond to survive. Eventually,one or both of these groups will need the cash from new boat sales.

At the end of the day, the market will determine the price. What rational person would pay 45k for a boat on Monday(that has been at a dealer for 18 months and the model is 2 years back) and on Tuesday(after it is officially a used boat),it is worth 30k. The easy money is gone for financing luxury items like boats. There a fewer buyers in the market. At some point, the boat dealers and manufacturers will have to recognize this and start reducing inventory by lowering prices like the auto and retail industries have done. At some point,they will need the cash to stay in business(if not the dealer,then the manufacturer).

Re: Boat pricing

In the sales business, there is a term called "control of the sale." It is something that sales managers teach their teams, and its objective is fairly obvious - to control the sale and/or sales process.

In my mind, the funny thing about this concept is that the seller really never has control of the sale. The buyer is the one who will choose to buy or not buy. Sure, it is true that highly skilled sales people often get customers to buy when they shouldn't, but that customer really has the ability to decide exactly what does or does not happen, if they choose.

In the current economic environment, the customer is in control more than ever. It simply is not an environment that favors the seller, and obtaining a sale at MSRP is not in the cards for seller most of the time. As a buyer, I wouldn't attempt to buy a boat at below cost for one simple reason - I would want the dealer to be around in the future, so accepting some level of profit on his/her part, has to be part of the deal.

I don't buy new cars any more, but when I was doing that every few years, I used to just tell the salesman to bring the folder on the car I wanted, to the table. I would go through it with him/her, throw out all the "baloney items," and then allow a markup of whatever percentage that I felt was appropriate. While not every dealership would allow this, the ones that didn't never sold me a car, and the ones that did, usually got the sale.

I see no reason not to treat a new or used boat sale the same way. Let the seller know what you are willing to do, and under what circumstances you will do it. If they don't like that, walk out the door. If they are OK with it, give them a fair deal and both of you should be happy.