The Truth About Sailboat Prices and Values
The casual buyer/seller often wants to know, "What’s the book value on this or that vessel?"
It’s a valid question but unfortunately the answers are anything but valid. Whether you’re buying or selling a sailboat, relying on these figures is a sure way to lose money at the sales table. Here’s why:
NADA, Blue Book (and BUC for brokers) are commercially published guidebooks designed to assist buyers, sellers, brokers, banks, and surveyors in determining the average values for a given vessel.
Just like in the popular automotive editions, values are presented in High Value and Low Value format, depending on condition. Adjustments can be made upward for extra equipment found aboard the yacht (but these calculations are seldom used).
There are slight variations in how the values are calculated, but for the most part they represent an average of the historical sales data, as reported and submitted voluntarily by retail marine dealers and yacht brokers across the USA.
Do you see a problem here? Actually there are several:
- Private sailboat sales do not get reported to NADA, BUC, or Blue Book. This can cause enormous discrepancies between the reported averages of narrow historical data and the true market averages.
- In reality, tracking sailboat prices is nothing like tracking automobile prices. The quantity of data is often so limited that with some boat models, years will pass before a single relevant transaction can be posted into the average sale data. Some models have zero data… or what’s there is only based on two or three boats… and even those may have been sold years ago!
- If the books are taken to be objective references for determining what a boat should cost (as opposed to subjective references), then the market values can begin following the book – instead of the book values following the market. We call this the self-fulfilling prophecy effect.
- Dealers and brokers have businesses to run and may not be able to cost-effectively apply as much effort towards the marketing of smaller, older, or less expensive sailboats as might their owners. This, of course, can bring the sale prices and reported values on these vessels down.
But as investors, we know it’s not unusual for certain vessels to outperform the book value by 2 or even 4 times the stated averages. This is why we should not rely on book values to inform us of the true value of a sailboat. Fortunately, with the Start a Sailboat Flipping Business course, we don’t need the price books, because we’re buying wholesale and selling retail.
Clicking on the link above will earn you a $10 discount off the PDF or print version of the course.