The Yacht Owner's Guide, Chapter 2: Should you buy a New or Pre-Owned Yacht

The Yacht Owner's Guide, Chapter 2: Should you buy a new or pre-owned yacht

By Spencer Brown

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Choosing between a new boat and a pre-owned boat is a significant decision for any potential boat buyer. Both options offer unique advantages and drawbacks, and the best choice depends on individual needs, priorities, and budget. 

The latter of course, is normally the determining factor, so let's dive deeper into the pros and cons of each option:

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New Boats

• Advantages:
  
  • Latest Technology and Features: New boats often come equipped with the newest technological advancements in design and equipment, including the latest navigation systems, engine options, integrated electronics, higher-calibre audio-visual equipment and entertainment features.  All these items combined create a very convincing package and justification for the purchase.
  • Customisation: When buying new, there's the opportunity to customise the boat to personal preferences, selecting specific layouts, finishes, and optional equipment to suit your exact requirements.
  • Full Warranty: New yachts typically include manufacturer's warranties, offering peace of mind and coverage for potential repairs or defects.
  • Pristine Condition: A new boat should be presented in perfect and pristine condition on day 1 of ownership, with no or very little (testing and sea trials) prior use or wear and tear, providing a fresh and exciting ownership experience.
  • Financing Options: New boat purchases may have better financing options available.
  • Payment Terms: New yachts invariably have a progressive payment plan, which may suit some customer's cash flow scenarios.

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• Disadvantages:
  
  • Higher Initial Cost: New boats come with a higher price tag than pre-owned vessels, and this has been very noticeable and pronounced over the past few years
  • Depreciation: Like cars, new boats often depreciate significantly in the first few years of ownership.
  • Lead Times: Depending on the model and customisation, there might be a wait time for delivery.
  • Taxation Situation: A new boat price is normally advertised at a price exclusive of VAT/Tax, and therefore, the individual case has to be taken into account.

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Pre-Owned Boats

• Advantages:
  
  • Lower Price: Pre-owned boats are generally more affordable than new ones, allowing buyers to get more boat for their budget.
  • Reduced Depreciation: Much of the initial depreciation has already occurred, meaning the value may hold better over time.
  • Immediate Availability: Pre-owned boats are usually available for immediate purchase and use.
  • Proven History: You can often research the boat’s history, including maintenance records and any previous issues.
  • Tax Paid Options: Options whereby the local VAT or taxes have already been paid may be an option, in which case this may make the yacht even more attractive if relevant to the buyer and his chosen venue of yachting.
  • Negotiation: As a general rule of thumb, yacht owners are more willing to negotiate based on their circumstances.
  • Location: Pre-owned boats are often already located near where you want to keep your boat, so you may not have to consider shipping costs.

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• Disadvantages:
  
  • Potential for Wear and Tear: Pre-owned boats will have existing wear and tear and therefore may not be in perfect condition, requiring maintenance or repairs.
  • Older Technology: Features and technology may be outdated compared to new models.
  • Limited Customisation: You are buying the boat as it is, with limited options for customisation.
  • Time for after-sales amendments - if the yacht is not built to the perfect specification, then you may want modifications completed. These will most likely take the yacht out of use for a period of time.
  • Warranty Coverage: Warranties may have expired or be limited, leaving the buyer responsible for repairs.
  • Inspection Required: A thorough inspection by an independent surveyor is crucial to identify the condition and also hidden problems before purchasing a pre-owned boat.  This may aid the eventual agreed sales price of the yacht as once a survey report is shared, there will be items to resolve, and this may mean a revision of the price to 

Some Advice From Brown's International

1. Investigate the dealership or distributor. Yachts are very rarely sold directly by the manufacturer; they normally have nominated dealerships based on territorial areas. It is important to understand the commercial framework and status of the dealership, so that you can ensure your funds are protected and you receive a professional and efficient service.

2. Likewise, if you are buying with a broker, understand the situation fully so that you know where you can achieve the best result.

3. A buyer should be very clear about their requirements and expectations from the purchase.

4. The sales picture for certain target yachts may change during the period of your search, whether new or used options. Remember that if you miss one, another may come along, however the opposite is sometimes true - there may be only one available, so again pay attention to the marketplace and the sales entity and choose the option that best suits your requirements.

5. A pre-owned boat will generally be represented by a broker, such as Brown's International. A broker does not earn money unless a yacht is sold, so there is an opportunity to make the broker work hard for you to achieve the optimal result and sales price.

6. First impressions count - if the yacht is displayed poorly, even if new, then that is a reflection of how the dealership will treat you!

7. No-one should be pushed or forced into a purchase; the dealer or broker should be there to provide information about the boat, with relevance to the buyer's requirements.

8. Perhaps the most important piece of advice is buy from someone with whom you build a rapport, someone you like and also that you feel confident talking to, who is knowledgeable, fair and wants the best result for both parties.  

9. At the end of the day, yacht sales is not about persuasion, to be truly successful relationship with a mutually acceptable result, whether new or used, it is about alignment; alignment of the buyer's requirements and expectations, with what the dealer or the broker can offer to meet the buyer's requirements.

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Conclusion

The decision to buy a new or pre-owned boat ultimately comes down to individual circumstances and preferences. New boats offer the latest features and should be in excellent condition, but this is of course at a higher cost. The location of the yacht is also a factor. And the location of use may increase the overall cost with relevant tax and VAT implications, so ensure proper advice is taken to ensure no surprises or disappointments. Some buyers prefer the "showroom treatment", as this is an expensive purchase; a yacht in the best condition, with a full and functional handover and tuition included, and many dealerships pride themselves on this first experience of yacht ownership. 

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This scenario also means the best warranty coverage.  On the other hand, pre-owned boats generally  provide a more budget-conscious option with potentially less future depreciation on the investment, but will require more maintenance, and probably more preparation to get the boat into the best condition at the start of the ownership experience, and also during the ongoing usage. Carefully consider these factors to make an informed choice that aligns with your boating needs, your expectations, your financial situation and your preferences.

At Brown's International, we offer a fully comprehensive boutique service for all your needs, whether looking to buy new or used, we can help. For further advice, please do DM or reach out on my contact details below:

+44 7395 531467

Spencer@browns-international.com