My former economics professor was a big fan of free market guru Milton Friedman, and he often quoted him in class. The favorite line was “There’s no such thing as a free lunch.” While I believe that statement is true, I also don’t think it hurts to take advantage of savings that develop during special circumstances. And this “perfect storm” of unusual market conditions – higher fuel prices, the credit fallout and manufacturing slowdown – certainly qualifies as special.
As a result, there are a lot of great boat deals now available. Buyers can take advantage of them by understanding the dealers’ perspective and approaching the transaction with realistic expectations. Here’s what several top sellers suggested to make your next boat purchase go smoothly.
“It’s definitely not all doom and gloom out there; we’re still selling boats and only have a few 2008 models left,” says John Eskow with Comstock Yacht Sales and Marina in Brick, New Jersey. This family-owned, full-service dealership has been in business for 35 years. It carries Regulator, Pursuit and NauticStar as its fish boat lines. “The quality of the brands we sell obviously makes it easier. When the fish are biting, people are still buying boats to go out and catch them. Higher fuel prices haven’t really affected us,” Eskow says.
“Are we working harder to make a deal? Yes. But we’re also getting more qualified buyers walking through the door as opposed to those just kicking tires. We have a very positive outlook.”
Bill Gilbert, who owns Caribee Boat Sales and Marina in Islamorada, Florida, told me it’s important for buyers to do their homework beforehand and be serious about buying if they expect to get a great deal.
“Know your budget and shop for boats in that price range,” he advises. “Do your homework before the show so you’ll be able to recognize a good deal like a close-out model. And once you negotiate your best price, be ready to complete the sale.”
Gilbert recommends that buyers be honest with the sales staff. For example, if you’re considering a competitive brand, let the dealer know that. That way he can match the offer or add comparable value to his boat to stay competitive.
“Buyers can get caught up in how much a dealer is making,” Gilbert says, “but we’re not like a car dealership. We don’t have the same sales volume. In our business you’re just not going to find a boat that’s $200 over the dealer invoice.” Most buyers who purchase a Contender, Grady-White, Boston Whaler or Pursuit from Gilbert are repeat customers.
“We work hard to cultivate our local, repeat business,” he says. “Most of our customers have become good friends over the years. That’s why it’s important to shop with a dealer in your local area. Besides getting a quality product at a fair price and maybe some add-ons, you’re developing a long-term relationship. That includes support like orientation or electronics tutorials after the sale, or maybe the first year’s maintenance or storage. There’s much more to a good deal than just the sticker price.
“Don’t treat the dealer as your adversary,” Gilbert adds. “He’s someone who can help you get the boat of your dreams so you can get on the water and enjoy it.”
With factory backing, dealers often offer various incentives to entice buyers. Extras like free electronics or fishing packages or other options, such as seat upgrades, cash rebates and extended warranties, are typically available, especially at the end of a model year or when inventory is high. Keep in mind, however, that incentives are not usually applied across the entire model line but only to specific models. And with the current economic slowdown, dealers are keeping a tight rein on inventory to keep overhead costs within budget.
“The early bird will get the worm this fall and again next spring,” predicts Chris Thomas, general manager for the MarineMax Fishing Center in Houston, Texas, which carries Boston Whaler, Grady-White and Sea Hunt. “That’s because dealers are trying to sell boats on hand. So buyers who make their deals early will have the best selection of power, colors and options. After those boats are gone, I expect many dealers will keep a smaller inventory and sell more from catalogs. That means an average six- to eight-week delay in getting your boat built and delivered if they don’t have the one you want on the lot.”
Thomas says MarineMax, the largest boating retailer in the country, has reduced the asking price of boats to the value price mark, based on supply and demand. Buyers are still welcome to negotiate, he says, but his remaining 2007 models, for example, have already been lowered to the invoice price. Incentives won’t be as generous as they have been in the past, Thomas also says.
“It’s definitely a buyer’s market out there,” he explains. “But if you plan on going to a show when it opens to scout out a deal and then come back the last day to make the buy, you’re probably going to be out of luck. Shop early and lock in the deal with a refundable deposit.” Up to 95 percent of Thomas’s sales are generated at shows.
Thomas also warns the current credit crunch has triggered tighter loan guidelines. Banks are not necessarily charging higher rates for boat loans, but they are requiring larger down payments. Don’t be surprised if you’re asked to produce personal financial statements for the last three years, proof of income and a credit history. The “sign-and-drive” policies of the past have tightened considerably, Thomas explains.
“We can’t control the cost of gas or a barrel of oil,” Thomas says. “But boating as a sport is still very affordable. If a typical family gives up dinner out at a nice restaurant and a movie once a month, they’d save enough to make a boat payment. Boats get the kids outdoors fishing and let you have fun with the whole family. At the end of the day, that’s what it’s all about.”
Ft. Lauderdale International Boat ShowOctober 30-November 3, 2008
104th New York National Boat Show December 13-21, 2008
Miami International Boat Show February 12-16, 2009