By: Alexis de Boucaud
It should go without saying the primary reason for getting a used catamaran is that you cannot afford a new one, or one of the size and quality you need or ardently desire. Today a high quality catamaran 40 feet and above will cost $500,000 dollars or more. So the reason my company sells mostly used catamarans is that 75% of the buyers who ask for our advice and help simply cannot afford a new boat, or do not wish to spend most of their savings to own one.
If you can afford a new cat it can, in fact, make very good sense to buy one but only if you intend to get many years of use from her. So long as you own a new catamaran four or more years, it starts to make economic sense.
If you are not certain you will be sailing four years or more, and sailing often during this time, you should focus on a used boat unless suffering a significant financial loss doesn’t trouble you.
There are 8 good reasons to get a used catamaran instead of a new one. These are:
• YOU KNOW WHAT YOU ARE GETTING. When you buy a used catamaran, if you are wise enough to pick a very high quality surveyor (and, forgive me, a quality buyer broker who has your best interests at heart), you will know exactly what you are getting at exactly what price. If you are very smart you should not be in for any great surprises. You will know exactly what is right with the boat, what is wrong with it, what you need to repair, or add, and can therefore calculate your costs very accurately. Ideally, going in, your broker will have provided you with all of the recent sales of that specific model so you will have a very good idea of what to pay – what the market says the boat is worth, not some Seller on the internet who wants to fetch back all of his costs and has no idea at all what boats like his are selling for.
• YOU GET YOUR BOAT VERY FAST. If you get a used boat, have a good survey and can accept it without major issues or painful and protracted negotiations (sometimes this does occur) you will be sailing and underway within 30 to 40 days in most instances. No waiting around. If you are an impatient soul a used boat - especially a very clean and well cared for one - is definitely the way to go.
• YOU WILL SUFFER LESS DEPRECIATION. If you buy a used boat you will be tying up less cash and experience less depreciation when you sell. As a rule, most new boats depreciate around 10% in the first year, and an additional 7% percent in the second year. After that, depreciation gradually decreases. While there is no fast and hard depreciation scale - because some catamarans hold their value at lot better than others - it goes something as follows: Year 1: -10%, Year 2: -7%, Year 3: -5%, Year 4: -4%, then another -2 percent decline per year until the boat is 12 or so years old. Depreciation largely stops after 12 years because new boat prices rise with inflation, holding up used values. This is not a hard and fast rule. Please do not hold me to this! If the cost of new catamaran builds jumps a great deal while you own your boat that will hold up your resale value. If you have a boat in high demand and limited supply that also sustains her resale value. If there is an overall limited supply of clean late model cats coupled with strong demand, as there is now, depreciation will again be lower. If you overpay from some crazy oddball design you will probably suffer a lot more depreciation. Note: During the Global Financial Crisis there was little demand for new catamarans so few new cats were built. That has, for the time at least, reduced catamaran depreciation.
• YOUR BOAT WILL BE DEBUGGED. Used boats do not have to be debugged or go through a warranty process. I have found that many new boat buyers falsely assume that ordering a new boat is very similar to buying a new car. You pick the options, a delivery date is set, and everything is going to go nice and smooth. You just sail away. Sadly, it seldom works this way. There are often delays, and you can be certain it will take several months to “debug” your new gem. People forget that these boats are floating ecosystems with diesel engines, generators, water makers, refrigerators, complex electronics, etc. It always takes time to get all of this equipment working just right, tuned to perfection. So unless you are patient, or working with a very good dealer, prepare yourself for some warranty repair downtime.
• USED BOATS ARE EASIER TO RESELL. Used boats are usually easier to sell because they sell for less, often a lot less, than new ones. The pool of potential buyers grows the older and cheaper a catamaran becomes. The number of people who call us asking to buy the turn-key cruising cat for under $250,000 is staggering, because far more people have this much to spend than those with $400,000, or a million, etc.
• LATE MODEL CATS, 1 TO 4 YEARS OF AGE, ARE OFTEN A FANTASTIC DEAL IF YOU CAN AFFORD THEM. Clearly, if you only intend to sail for just two years, getting a new boat is costly due to the initial steep depreciation curve I noted earlier. Often, the hardest boats for us, as yacht brokers, to re-sell are the one to two year old boats, which is why they are often such a good deal! The sellers say to us, “Here is what I paid for my boat, look at all my options. Why cannot you find a buyer who is prepared to pay me something close to this?” The reason we cannot, or any broker, is the mentality of the new boat buyer who wants to pick the options, the colors, the name, have the latest technology, and have that “new boat smell.” Unless they can buy that two year old boat for a very steep discount they prefer to spend 15% to 20% more and buy new. This is why the best catamarans to buy are often 1 to 4 years old, provided you can afford them. If you cannot afford them, the next best thing is any used catamaran that is in excellent condition with light use for her age, or a catamaran the seller already paid - probably overpaid for in my experience - to seriously refit.
• A TOTALLY REFIT OLD CATAMARAN WILL DEPRECIATE MODESTLY AND COST YOU VERY LITTLE TO MAINTAIN FOR MANY YEARS. If you do not wish to experience much, if any depreciation, buy an older catamaran in tip top condition. Tip top is the key here, because as depreciation decreases, maintenance and refit costs increase. If you buy an old boat that needs new engines, generator, sails, standing rig, etc., watch out. Unless she is priced properly to factor in these refit items you had best be careful. Why do charter companies “phase out” their fleets after the boats are 5 years old? Because this is when things start to break on a heavily used boat, start to wear out. This is when the costs of care and or refit start to rise significantly. During a boats first four to five years she should really cost very little to maintain and sustain. After that, expect higher costs on an annual basis for care, refit, and maintenance. Just remember, there is a vast difference between a five year old charter boat with 4,000 engine hours and a privately owned five year old boat with 1,000. The two boats cannot, in any manner, be compared on the same playing field in terms of value. How do you compare a 15 year old 58 foot cat that recently had a $250,000 refit to a cat of the same size that did not? Think hard on this. Too many buyers see these two 58 footers on the internet and instantly fixate on the one that is $100,000 less when in fact the more expensive one – the total refit boat – is the far better deal.
• A USED BOAT IN BRISTOL CONDITION IS NEARLY ALWAYS A GOOD BUY IF SHE IS PRICED PROPERLY. After boats are five or more years of age condition is far more important than year of build. Many people tell us, “I do not want a boat more than five years old,” even if they cannot afford a five year or newer boat. They get hung up on age instead of condition. What they should really be saying to us is: “Find me a boat that was cared for by a pilot or an engineer or a very rich family who paid a captain to pamper the boat.” A well maintained and cared for used boat will cost you far less over time than one that had mediocre care. Those who fixate on the entry cost of a used boat, and not the exit costs, are making a very large mistake. It is a mistake I see quite often. Here in our office we often joke that if we want the phone to ring, there is a very simple way to do it: List large catamarans at terribly cheap prices. All those dreamers sitting on their computers are fixating on that bargain boat. These are the ones who tend to make the biggest mistakes when buying a used boat.
The above 8 reasons suggest that getting a used boat makes a lot of sense for many people. But used boats are not for everyone. There are five reasons why some people are not suited to purchase a used boat at all.
• IF YOU ARE NOT HANDY, OR CANNOT AFORD A CAPTAIN, A USED BOAT COULD PROVE FRUSTRATING TO YOU. If you buy a used boat that needs considerable work you will have to spend a lot of time in a shipyard, not sailing, but overseeing contractors. This, I am afraid, is generally not much fun. Never try it with your wife and family. Trust me that you cannot live on a boat sitting up on the hard in a dirty shipyard.
• IF YOU CAN ONLY LIVE WITH PERFECT. If you overpay for a used boat, by failing to accurately survey her, or know what her market value really is, or fail to accurately estimate what it will cost you to refit, repair, or outfit her to the standards that make you happy, you may well end up “overinvesting” in the boat. You may find that you suffer a greater loss when you sell than the depreciation you sought to avoid from buying a new boat. You may in fact, “Sell her for more than you bought her for,” but when you calculate the money stuffed into her, and the time you spent to get her in top order, you really lost a lot of time and money. The age of the boat is far less important than what you pay for her, and what condition she was in when you bought her. So be careful. Every used boat has a value; the tricky part is finding someone you can trust to educate you on what that market value is.
• CUSTOM, ODDBALL BOATS ARE HARD TO RESELL. If you have a penchant for going against the grain and are drawn to some very odd, or exotic used catamarans, or a catamaran with strange and quirky features, she could be very hard to resell and you could lose a lot.
• IF YOU ARE A TECHNOLOGY FREAK, AND CANNOT LIVE WITH ANYTHING BUT THE LATEST AND GREATEST, YOU REALLY NEED TO GET A NEW BOAT. Each year there are significant advances in design, and in the way in which catamarans are built, configured, and equipped. The pace of technology moves swiftly and there is no question that a modern, up to date boat, with all of the latest features and technology is enormously appealing to many. It comes down to what you have to spend and how long you intend to keep your boat.
Whether you buy new or used, get a catamaran, get out on the water while you are young enough to do so. Sailing is a kind of grace, a kind of magic, and will leave you with lasting memories and joy the likes of which you may never experience in any other way. See you on the water sometime soon I hope.