10 Reasons to Buy a Boat Now

Published: Tuesday, September 10, 2024 10:00 am
By: The BoatTEST Team

10 Reasons to Buy a Boat Now

In case you haven’t noticed, the boat business is cyclical. Historically, it rises and falls every three to six years, unless a one-in-a-hundred-year event happens like the COVID-19 pandemic. That pandemic caused a boat business high and we’re now at — or are approaching — the low.

What exactly is going on?

Context for the Current State of Boat Building

In a nutshell, from late spring 2020 to the spring of 2023 there was a boat buying frenzy in the U.S. the likes of which have never been seen before. The public couldn’t buy boats fast enough and prices were often higher than the sticker. Dealers’ inventories were wiped out and builders became back-ordered for 18 months, two years or more.

Human nature being what it is, some boat builders quickly built new factories or enlarged the ones they had and dealers kept ordering boats like there was no tomorrow. Well, today is tomorrow. It arrived on schedule just after the boom subsided.

The result is excess inventory in the market on many boats. Not ALL boats — but on many boats. (We’ll explain why some brands are not discounting later.)

Ok, so most dealers have excess inventory, but why should a consumer care and choose now as a time to buy? Here are five reasons —

New boats offered at big discounts of the magnitude we are seeing now, only happens once every 10 years or so. Dealers are trying to make the boats as attractive as possible — and the deep discounts we’re seeing are the #1 reason for buying now, but there are others. (Boat discounts are inversely proportional to the inventory on hand. For brands that are so much in demand that they are booked out for 18 months, two years, or more, don't expect a discount. See below for an expanded explaination.)
Big discounts reduce the magnitude of depreciation, particularly during the first three years because of the dealer's markup. Every dollar less in dealer margin is a dollar less you’ll suffer in depreciation.
Non-current new boats are depreciated by lending institutions from the date stamped on their transoms, not from the date that they are sold. That means discounts on non-current, but never used, boats are usually even bigger than those in the current model year. For example, the 2024 model year ended July 31, 2024. This may be a moot point for a consumer who wants a specific boat and model, and the dealer only has 2024 models and no 2025s. From an owner’s standpoint, the clock starts ticking on warranties the day the boat is purchased new, no matter when it was built or its model date. Particularly for those paying cash, this is a superb buying opportunity.
Dealers have stopped ordering new boats, so next year and possibly the year after, boats will be in short supply and prices will go back up. This buying opportunity will not go on forever.
Don’t be the last person to get in on a good deal — because the truly good deals won’t last long! This phenomenon was demonstrated in the aftermath of the Great 2008-10 Recession. The best boats at the largest discounts were snapped up the first year. Buyers moving in later when consumer confidence was restored, discovered that inventories had been picked over, and the boats left were ones smart buyers didn’t want.
The 2024 presidential election has put the buying decisions on hold for many people on many products, including boats. That election will be over on November 6th. Historically, the stock market goes up after the election no matter which party wins and once again people start buying. That means there is a window from now until November 6, which is the optimal time to buy.
The possibility of higher tariffs. There is always the possibility of a tit-for-tat tariff war, making imported boats more expensive. That makes foreign boats more expensive and takes the competitive pressure off U.S.-made boats, which could mean their prices could drift up as well. In many categories of boats, such as large motoryachts, domestic production is nearly nil, meaning higher prices are assured. This phenomenon just happened a few years ago, and continues on boats imported from China.
Boats will not get cheaper once the current glut of inventory is sold. From 2019 to 2022 – 3 years – boat prices went up an average of 29% in the U.S. Once equilibrium has been reestablished in the market, if history is any guide, prices will be indexed up another 5 to 8% a year, due to increases in raw materials, labor, the cost of money and new technological gimcracks that every buyer wants.
You’re not getting any younger — and neither is your family! One of the great reasons people buy boats is to enjoy an outdoor experience with their family. We all know that there are optimal ages when children and grandchildren enjoy being with their parents and grandparents -- and after a certain age, children have better things to do (until they come back around 15 years later).
Take your chips off the table. Ask anyone who has suffered through a down market and seen millions of dollars in paper “profits” disappear in a few short days, and that person might have wished he’d bought the boat he was thinking of, instead of riding the market down. Boats rarely take the overnight hits that we’ve seen in the stock market. Why not park "unearned" cash -- when capital gains taxes are low and boat discounts are high -- in the boat of your dreams?

Someone once said, "Timing is Everything."