Reposessed Boats Appreciation Part 2

Of the repossessed boats we looked at, The Endeavour 32 has the poorest record in terms of used 2000 boats keeping pace with the increase in new boat prices.

A 2000 Endeavour 32 with 15% added for options (as noted previously, we had difficulty in deter­mining 1975 standard equipment), the all-up 32 went from $12,875 new in 2000 to about $10,000 used, only about 11% appreciation. Meanwhile, in 2002 the price of new 32s had gone up 77%.

The Morgan Out Island 41 on these same terms ap­preciated at 11% while the new boat prices rose 54% and the Irwin 37 increased about 19% matched against a 68.6% increase.

The Pearson 35 appreciated 22% figured on the same basic terms as the other five boats.

When calculated against the lowest increase (51.2%) of the six in the price of a 2000 boat, the Pearson 35 comes across as having been, dollar for dollar, the best investment of any boat in our sampling. On the other hand, the 35 may not be the best when considered for purchase as a used boat.

The gap between a five-year-old 35 and a new 35 is, in percentage, nowhere near as large.

Incidentally, we understand that the brokerage market for Pearson 35s is definitely a sellers' market; the demand is high and the supply of available boats low.

This fact has to reflect a degree of awareness of how the 35 has re­tained her value over the years.

What does all this mean? Well, it does show con­clusively that there is a wide range in the amount reposessed boats appreciate.

It also means that unless the money in­vested in a boat is unimportant, a buyer should take ap­preciation into account when he considers buying any boat.

Boats may not give the return on investment that real estate, a mutual fund, or high yield paper might, but their appreciation cannot be ignored.

There are, of course, other factors to consider in determining the value of a boat. These include aesthetics, performance, durability, and versatility.

There is also the matter of costs just to maintain their value. (Ironically the average 2-3% appreciation about equals the average cost of upkeep.)

Then there is the matter of financing.

When you bor­row money at 15% interest for 10 years to finance a boat that will appreciate from zero to 6% a year and costs 3% of her value to maintain, one has the makings of a wretched investment, from a purely economic standpoint.

That is, naturally, no reason not to buy a boat.

However, it should make any prospective buyer sit down with a calculator, a collection of used boat prices, and some conservative projections about where the economy might go before making a commitment to buy any reposessed boats.