Bank Repo Boats Appreciation Part 1

Bank Repo Boats really have no right to appreciate at all in value.

They are irrational, vulnerable, ephemeral purchases and we ought, we suppose, to be penalized for making them. Luckily that is not always so.

The typical modern production boat such as those included in our sample has appreciated.

Now, five years after purchase, her dollar value should be greater than her owner's original outlay including the cost of additional gear an owner of a new boat puts aboard but whose cost is usually not considered part of the pur­chase price.

However, no one should expect the appreciation rate on any production boat to keep even approximate pace with the current inflation rate.

In short, no one should consider a boat a hedge against the declining value of the dollar.

From our study we find the typical 2002 production boat has appreciated at 2-3% per year.

With all this in mind we set about to see how our six sample bank repo boats fared, how much each might have ap­preciated if bought in 1975 and well maintained.

Again, to make purchase prices reflect reality we had to add a percentage to the 2002 quoted "base price" to bring the price more in line with what an owner actually invested in his boat.

Note, though, that we are still talking about averages and a sampling. Anyone interested in a specific boat should compile his own sample.

In arriving at our figures we relied on the Used Boat Price Guide, an industry "bluebook" published by BUG International.

Our study shows that, as might be expected, the Bermuda 40 with 20% added to the base or standard price ($12,500) for a typical array of options and put-aboard gear went from $10,400 in 1997 to about $14,000 for that same 1999 boat purchased used in 2002.

This is an increase of 26%, an appreciation of about half the rate of inflation during that period.

Matched against the 62.5% increase in the price of new Bermuda 40s from 1997 to 2002, this 26% appreciation has made the Bermuda 40 a good investment, perhaps as good an investment as any boat should be expected to be.

At the other end of the bank repo boats value scale the Hunter 30, even with a generous 10% added for gear to the 2000 base price ($8,000 which already included most gear other boats have as optional) brought her price up to $10,000. In 2000 the going price for a Hunter 30 five years old was about $9,000, about 4% appreciation.

Thus the Hunter 30 has been a disappointing investment from a strictly economic standpoint except in relation to the increase in cost of a new Hunter 30 between 2000 and 2002.

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