What Will Your Boat Be Worth 5 Years From Now

What Will Your Boat Be Worth 5 Years From Now

Hunter 36 Sailing in Newport, RiBY:    Reeve Hutchinson, CPYB

As a dealer one of the most frequent questions I’m asked is “what is the depreciation rate of a new boat”?   From the studies I’ve read, the average time a person keeps a boat is about 5-6 years regardless if they purchased new or used.  My investigations show that, Midwestern market, boats tend to depreciate at a straight line rate of about 3%-6% per year for the first 10 -15 years depending on upkeep, market conditions, and the rising cost of replacement yachts.

We all agree that “talks cheap, show me the numbers” so I will present an example of a typical production yacht.  To keep this simply about depreciation in purchase, I will ignore all of the cost of ownership issues such as insurance, finance, maintenance etc.  For the purpose of our study, I selected a Hunter 36 from 2005 and 2010.  As one of the most popular models built, the 2005 and 2010 Hunter 36 was essentially the same boat, and I could study pricing over the past 5 years.   Following is a spreadsheet that describes the results.

2010 purchase

2005 Hunter 36

2010 Hunter 36

FACTORY PRICE WHEN NEW

$147,120.00

$168,750.00

Purchase price when new

FEATURES

Shoal draft keel

5′-0″

5′-0″

In mast furling

incl

incl

Arch mtd. Traveler

incl

n/a

microwave oven

incl

incl

Stern rail settees

incl

incl.

Furling Genoa

incl

incl

Mainsl & Genoa

incl

incl

12v Refrigeration

incl

incl

VHF radio

incl

incl

ST-60 Knot meter

incl

incl

ST-60 Depth sounder

incl

incl

ST-60 Wind instrumentation

incl

incl

Heart Freedom inverter

incl

incl

Stereo CD

incl

incl

2010 PURCHASE PRICE

$110,000.00

$181,180.00

2015 PURCHASE PRICE

$90,000.00

$125,000.00

TOTAL 5YR DEPRECIATION $

$20,000.00

$56,180.00

TOTAL 5YR DEPRECIATION %

18%

31%

AVERAGE ANNUAL PERCENTAGE

3.60%

6.20%

If we consider a 10 year period (2005 -2015) the Hunter 36 will have depreciated nearly 40 percent overall or approximately 4% per year.  Not bad when compared to purchasing a new, high end automobile.  Whether you choose to purchase new or used depends on many factors we won’t discuss here but, when it comes to getting the most “bang for your buck”, buying a pre-owned boat can, depending on condition, be a clear winner.