Buyers Market & Prices Increases

[Phil8uga]

Sorryfor the typos. The app does not work well with my phone.

[hal2814]

At the end of the day, real buyers markets for Nautiques are historically few and far between. They’re also short lived. Buy if you want a Nautique and can afford the one you want. Wait if you can’t meet that criteria. Maybe compromise on boat if you can’t afford the exact one you want but be prepared to hold onto it for a few years. Do that and you’ll never have to worry about buyers and sellers markets.

[RDT-G23]

Ironically the two Virginia delegates that tried to push the wakesurfing restriction bill through were both Republicans, go figure in a predominantly Blue state. In this case the Democrats helped defeat the proposed bill

I will certainly be on the look out in my two states. I have all proposed bills tracked, so we will see.

[HollywoodBall]

Just curious others thoughts on when it will be a buyers market OR when new boat price increases will stop??? New boat prices have risen every year for at least the past 7 years. When do the prices increases stop? OR do banks start offering 30 year loans so the boat mfg.'s can continue to increase prices?

What kind of terms are currently being offered on these new/slightly used 6-figure boats?

[Phil8uga]

The longest term i am aware of is a 20 year loan. credit score will determine rate.

[srock]

The longest term i am aware of is a 20 year loan. credit score will determine rate.

That is insane but people will do it.

[WakingAround]

That is insane but people will do it.

With interest rates at 2-4% and the market returning 15-20% one would be wise to.

[FireBreathingRubberDucky]

That is insane but people will do it.

From my perspective this comes down to a matter of preference. I’m not going to sit here and tell you I’m Warren Buffet but I will say that I’m a fairly experienced and successful investor. It’s not my primary profession but it’s turned into a very successful side hustle through the years. While there is definitely some merit to the Dave Ramsey approach to finance and agree it’s important to sit down, write out a budget and not get over your head, I frankly feel that burdening yourself with a higher payment and shorter term is generally a less financially savvy decision depending on the circumstances. For example, if you’re in a position where placing an 80k down payment is going to diminish your cash reserve to an uncomfortable level in the name of having a shorter term and lower payment, I believe this is a bad choice (Everyone has a different level of risk tolerance). What if something comes up and you need $30k in cash and now you don’t have it? However, if you can put $50k down without breaking the bank, while still being able to comfortably afford your higher payment and a longer term this is likely a better route to go (you keep the $30k reserve on hand for other things).

I’ll use myself as an example:
When i was 21 years old I sold my 2001 Toyota Tacoma for $14,500 (500 less than I paid for it 4-years earlier). My family, girlfriend and friends told me I should take the cash (I owned the truck free and clear) and pay cash for a used Nissan Pathfinder with higher miles so I didn’t have a payment while I was in college. I was an Economics and Business major and sat down and crunched a bunch of numbers and realized that while their advice was provided with the best of intentions, it was not the right choice for me. Instead I bought a brand new Nissan Xterra for $23,000 (approximately). I placed a $5,000 down payment, got a good interest rate and more than reasonable payment. After closing the deal, one month later I put down another $5,000 toward the principal, which covered my payments at that time for the next 20 months. I subsequently invested the remaining $4,500 in the stock market. Long story short, I turned that $4,500 into $26,000 over the next 24 months and kept making payments, even though I was paid through 20 months at a clip of $300 through that timeframe. Once I got more comfortable with my cash reserve I paid off the Xterra (funny part is my buddy bought the Pathfinder, which subsequently blew a head gasket and went through a transmission during his first year of ownership). The point is I took a methodical approach to my investment because ultimately that’s what this whole scenario surmounted to being...an investment. I wont disclose everything but I will tell you that $26k has continued to build through the years and I am now to the point where I could pay cash for my new boat...however I will not. Instead I will finance for a longer term, continue to allow my cash to build interest in my investments and keep a healthy base of liquidity should a rainy day come calling (given these crazy times could be around the bend before you know it). That being said, I will not wait the full term of the loan to pay the boat off and will always pay a little more to minimize interest payments. I usually set up spreadsheet that compares interest paid on anything I owe relative to my investments and ensure a reasonable gap of interest earned versus interest paid is maintained. This approach does take commitment and may not be right for everyone but I have found that it’s worked very well for me. I went on to grad school and in total came out with $186k in student loans between undergrad and grad school (I went to expensive schools) and paid these loans off in exactly 7 years (once again, taking a similar approach).

Similarly, these boats are investments. They aren’t good investments from a financial perspective but hey are wonderful investments for building memories with loved ones, even if it’s them laughing at your expense because they just watched your reaction as your wife gouged the side of the boat into the dock (that’s another story). Don’t ever let anyone shame you into thinking you have to do it their way. Different strokes for different folks. With that being said I do believe everyone should practice fiscal responsibility and evaluate your situation very closely before making any large purchase like this. If you go with the 20 year term to keep the payment reasonable (in case that rainy day comes calling and you need your cash reserve), my advice would be to put extra down every opportunity you can afford so you don’t find yourself horribly underneath on the loan. With all that being say, stay away from high interest credit cards...that essentially never works out lol.

Good luck and happy boating!

[bturner]

I've always seen the above as the alternative to my approach (buy abused and fix) and have seen it played out successfully several times over the years by friends that didn't have the skills to repair or rebuild a boat. It was absolutely the best strategy for them.

Where I paid cash for beat up boats and build equity in them while repairing and using them, others took the above approach with low down payments and reasonable monthly installments. The obvious upside to their approach was they were able to order exactly what they wanted, get that new boat smell and warranties. The downside was the monthly payments that get tiring to make up here in the north come February, the expiring warranties and changing circumstances life throws at you like kids, college, cars and houses. Of the 4 people I can think of off hand that took this approach all of them have been long term ownership and all but one still has that same boat some 10 - 15+ years later. It's worked out very well for them, although since I'm the one now fixing their boats I'm not so sure how it's worked out for me..... Just kidding here as I enjoy helping friends and love working on boats. That and there is the beer that flows freely and I always have an open invitation to ride with them.

To be truthful I am somewhat jealous. I've always wanted a new boat, ordered the way I wanted in the exact colors I wanted but always seemed to be just short of making a deal work that I would be comfortable with. Even where I'm at now in life while I can afford to buy something new I just can't get myself to spend the kind of money these boats are going for new. Or maybe it's that we're all creatures of habit and that after all these years of struggling to get the next boat that it's now part of what I expect and what I've come to enjoy with boating.

As stated above, every situation is going to be different and your approach will be different as well. The key is to make decisions that you're comfortable with while knowing you're comfort level to the risk involved with those decisions.

[Wornwater]

Just curious others thoughts on when it will be a buyers market OR when new boat price increases will stop??? New boat prices have risen every year for at least the past 7 years. When do the prices increases stop? OR do banks start offering 30 year loans so the boat mfg.'s can continue to increase prices?

I spoke to a boat dealer last year in the summer and they'd never been busier. I couldn't believe it. I thought with the economic chaos and people losing jobs, the market for boats would be down. I was very wrong. And that was for both new and used boats. The economy is crazy. So much stimulus going on. Everything in prices is going up, up, up. I don't see the prices coming down anytime soon. But, I could be wrong. Everything is crazy.

[nancyjoshua]

Everywhere are really a huge impact on prices because of COVID-19, when I was gone to buy a boat cover last month, the cover price were pretty higher than before I don't understand that, why their prices much high, it's just a cover.