Total incremental cost to upgrade G23 every 1, 2 or 3 years?

[simplysanj]

Hi Gang,

Like a lot of people, I'm now able to work from anywhere and restricted from traveling so I'll be spending a lot more time lakeside and boating so I am trying to figure out the best holding period for a boat. I've been a longtime Nautique owner but hadn't been on the water much because of family, work, etc. but that's now changed.

I'm looking for some guidance on what the ongoing financial impact is of upgrading a boat like a G23 every one, two, or three years. Assuming you get the same discount every upgrade (arguably around 20%), how do dealers typically value your trade-in?

What I'm trying to figure out is the annual cost so there are 2 main factors, the increase in factory base cost each year (3-8%) plus the depreciated value of the trade-in. This assumes you buy the same optioned boat. Also, I have no need to finance a boat but does it make any difference to the dealer?

Also, do those who regularly upgrade their boats keep their original trailer? Any insight appreciated!
Thanks!
S

[Nautiquehunter]

You can figure 10 to 12 percent per year until it goes out of warranty then its anyone's guess?

[Mr DW]

simply sanj - I'm in the same boat (pun intended) trying to figure the actual cost of ownership when buying new and selling every 2-3 yrs. My dealer says he has lots of customer who trade in every 2 yrs. That seems to be the sweet spot. I think every year would be a bit of a PITA going through the process and bearing the other costs of purchasing... taxes, tag, outfitting the boat, etc. I think this is a good year to buy a new G23. They just did the remodel and used boat prices are high. From what I see, used 2017 G23's are $120-$140. A new G23 is probably $160-$180k. Thats $20k-$60k over 4yrs which is $5k-$15k per year. I know these are wide ranges, but lets say $1k/mo cost of ownership for the best and brand new boat you can buy in the colors you want and with the options you want. I know I get a lot more enjoyment out of our little axis than $1k/mo.

[simplysanj]

simply sanj - I'm in the same boat (pun intended) trying to figure the actual cost of ownership when buying new and selling every 2-3 yrs. My dealer says he has lots of customer who trade in every 2 yrs. That seems to be the sweet spot. I think every year would be a bit of a PITA going through the process and bearing the other costs of purchasing... taxes, tag, outfitting the boat, etc. I think this is a good year to buy a new G23. They just did the remodel and used boat prices are high. From what I see, used 2017 G23's are $120-$140. A new G23 is probably $160-$180k. Thats $20k-$60k over 4yrs which is $5k-$15k per year. I know these are wide ranges, but lets say $1k/mo cost of ownership for the best and brand new boat you can buy in the colors you want and with the options you want. I know I get a lot more enjoyment out of our little axis than $1k/mo.

Mostly agree in your findings. There are a number of things making the market a little hard to predict:

- High demand because of WFH/canceled vacations
- A lot of high ask prices on used boats from people who probably didn't get a big discount on initial purchase
- Major redesigns cause more trade-ins and subsequent depreciation of older models
- Supply chain disruptions causing build slot delays

Having said that, I found that '21 G23s will hit the street at about 200K with trailer (230K list, 13% discount), '20 G23s can be had for $165-175K. If you flipped your boat in 1 year and you had the same discount purchasing new, you would lose 12% the first year and probably another 15% if you traded it in.

Over 4 years of ownership, I found examples of an average 8% to 9% annually if you sold privately or 11-14% if you traded-in to a dealer. Another big variable is the tax credit on trade-ins so if the sales taxes are 15% like here in most of Canada, trading in for fair market value minus 15% is worthwhile.

My dealer tells me that in my area, most people keep their boats for at around 3 years so it would seem that hey keep for 3 years, lose 1/3rd when trading in and, can expect new prices to be +15% after 3 years. In my case, if I buy new at $200K + 30K taxes, trade in at $133K in 3years for a new boat at $230K, the 3 year cost $100K+15K tax, total is $38K year all in (33K before taxes (!!)). That's not too different from a 200K car lease. A more efficient way to do this would be to buy an end of season boat at 22-25% off MSRP and upgrade to the same every 4 years but you likely won't get the colors/build that you want.

[mooneywa]

...15% tax on boats??

[simplysanj]

...15% tax on boats??

Yup, in Canada it's 13-15% sales tax from dealers almost everywhere except Alberta where it's 5%. In some provinces, under some circumstances, you need to pay a 10% provincial tax on a private boat sale as well.

[Brien]

Wow, here in the USA we should buy our boat now before new admin puts a 15% tax on our boats!

[SilentSeven]

Sales tax here in WA state is just over 10%. :/

[bturner]

Wow, here in the USA we should buy our boat now before new admin puts a 15% tax on our boats!

Believe me this is coming to your state soon. Just filled up today at Costco for $2.34/gallon. Still cheap I know but it was $2.10 just 2 weeks ago. BOHICA fellas. All this should be no surprise. This is exactly what they said they would be pushing for all last year. I'm still saying $3 buy September. We should start a pool.

[greggmck]

The recent Covid induced market demand has altered the depreciation of used boats (see how little depreciation I incurred on my 2020 G below). How long this lasts is anyone's guess.

Furthermore, the greatest depreciation occurs in the first year, after that depreciation rates diminish. For example, in 2016 I traded in my 2014 G for less than they are selling today. As much as many complain, the annual price increases have significantly helped inflate the prices of used boats.

I published this some time ago, but here are my numbers.

2014 G23
Purchase 8/13/2014 Price $112,342.00
Sold 2/27/2016 Hours 90
Net depreciation = 6.54%
% Value when sold: 93.5%

2016 G23
Purchase 2/27/2016
Sold 10/30/2017 - Hours 165
Net depreciation = 10.66%
% Value when sold: 89.34%

2018 G23
Purchase 10/30/2017 (triple axle trailer)
Sold 9/11/2018 - Hours 268
Net depreciation = 12.77%
% Value when sold: 87.23%

2019 G23
Purchase 9/11/2018 (no trailer, thruster)
Sold 10/18/2019 - Hours 285
Net depreciation = 14.73%
Value when sold: 85.27%

2020 G23
Purchase 11/6/2019 (no trailer, thruster)
Sold 10/21/2020 - Hours 255
Net depreciation = 2.5%
Value when sold: 97.5%

Sent from my SM-G986U using Tapatalk

[LakesideRec]

I find it amazing that people value constantly having a "new" (1-3 years old) boat so highly. What is the attraction?
Personally, I am more of a buy a 1-3 year old boat, and keep it for 10+ years. Keep it clean and well maintained and plenty enjoyable for me.
Just curious what it is that people find so much more enjoyable / valuable in constantly having "new"?

[Kenv]

The attraction is...So they can drive by you on the water and say "I'm way cooler then LakesideRec with this new whip...." LOL. Totally kidding of course. He he he...Not sure there is one answer for that. I will tell you....I'm a "approximately" 5 year guy....with my boats and trucks. My MAIN reason for doing it...so I still get a decent trade in price on my new boat...and don't let the old one get "too" old. Same with the truck...every 5 years I try to keep my diesel under 100,000 for better private sale price...or trade if I have to. Good pattern with both the trucks and boats. 2000-2005-2010-2015-2021 boat.....1999-2002-2006-2011-2017 truck. Now for the guys doing boats EVERY year...it's usually some type of promo program...or just the available cash to get a new one every year....because they can. I'm sure there are other reasons I just can't think of...

[Mahnal]

I find it amazing that people value constantly having a "new" (1-3 years old) boat so highly. What is the attraction?
Personally, I am more of a buy a 1-3 year old boat, and keep it for 10+ years. Keep it clean and well maintained and plenty enjoyable for me.
Just curious what it is that people find so much more enjoyable / valuable in constantly having "new"?

Over the past 10+ years, the surfing has driven the upgrades. First, because of the demand of the surf enabled boats, used surf boats sell well. Second, innovation in surf boats has improved every 2-4 years. G introduced in 2012 has had material updates in electronics or hull every few years. 2016 G hull improvements, 2018 major electronics improvements. 2020 small hull improvements and then the huge new hull in 2021. That being said, it is hard to imagine those improvements will be as significant over the next 10 years, but maybe. I have a 14 G25, this summer will be my 3rd summer on it, and we love it. Maybe consider getting a '21 G in 2 or 3 years.

[Devo77]

We just sold our 2019 GS privately that we got on 'clearance' at the end of 2019 for about 5% MORE than we paid for it in 2019 (and that is with 140 hrs on it). Unfortunately we couldn't get a good deal on a 2021 GS (16% discount) - but in the end the cost to upgrade was less than $20K for a boat that had some significant changes over the 2 years... This also came from a good relationship with our dealer otherwise forget about finding any 'new' 2021s anywhere...

We luckily also live in a state where sales taxes on vehicles (including boats) maxs out at $350.

[Morety]

Using GregMCK's stats above (and guessing some of the later purchase prices), it looks like cost of ownership is probably between $80-90/hr on "normal" years and during Covid 2020, it was down under $20/hr! Well done on getting a 2020 G23 and 255 hours for only 2.5% depreciation!

Are you trading these boats or selling privately?