Slippery Slope

[Pete]

Generalizing is always risky. But, for this discussion I am going to do it anyway. 25 year old and older Hatteras boats, in decent or better condition, are selling for less than 10% of the equivalent new model for the first time. Parts for 25 year old and older Hatteras boats cost as least as much as the equivalent part for an equivalent new model. Same is true of dockage, fuel, all maintenance supplies, professional repairs, and everything else, except perhaps insurance if you can get it. And the repair/replacement rate on the 25 year old Hatteras is greater than the new boat.

This circumstance appears supportive of overall brand decline, as those unable to resist these assumed bargins, soon learn that they could afford to buy the boat but can not afford to own it. Just imagine the first fuel stop bringing her home, when someone tops off and gets told that will be $1K, $2K, $3K. It appears to me that this current market situation will no doubt lead to Dock Queens, to neglected Dock Queens, to derelict Dock Queens, to Dock Queens that are only moved by tugs, to permanent on the hard boats, to those in the back row of the boat yard with the torn canvas hanging off them.

I fear the days when most every Hatteras boat you ever saw was in decent condition, and if not some inspired person was working to restore the boat, are gone. Only time will tell, but I do feel the Hatteras brand is starting down this slippery slope, with no know way to prevent it.

Pete Drez

 

[sportfish 45]

Maybe but I don't think so. I see it going the other way. I see boats that were for sale and presumably not being maitained for years now selling for 25% of what they were advertised for 6 years ago. I see people bringing them back to life. It's evident on this forum we keep seeing new owners. The lowering value may save the old classics and destroy the market for new.

 

[magnawake]

Good topic. I see Sport fishing convertibles sitting around because of the fuel cost because they were used to fish from mostly. Motor yacht models people mostly sit at the dock anyway so nothing has really changed. What has changed is Rednecks like me can now own a descent sized boat able to support a family taking a few small trips every year. Another thing is Rednecks (country boys) are usually good with their hands and can keep up these beautiful old boats. Hatteras boats are worth fixing up and putting money into. As long as slip fees stay down, I dont think it will hurt the older hatts. You have to admit living aboard an older Hatt is a pretty cool thing, even if you dont move it. For anyone looking for a second home near the ocean, you cant beat the lifestyle. Living the Dream....

 

[saltshaker]

The new ones are out of reach for most who would be interested in the old boats. Yes maintenance is a huge factor that most underestimate but many of us who are interested in these older boats, know they're not cheap to own. The dreamers will buy and let them fall in disrepair but many of us will care for ours. Look around at most of the boats out there. New, old all brands considered, many have become dock queens and are neglected. At 3-4 million for a new one, I'd be boatless. I'd doubt I'll ever be able to spend what it would cost to replace mine with a new one, even if I went much smaller. Those like me will always be looking for a good used one to fill our slips.

 

[Tim Powell]

The new ones are out of reach for most who would be interested in the old boats. Yes maintenance is a huge factor that most underestimate but many of us who are interested in these older boats, know they're not cheap to own. The dreamers will buy and let them fall in disrepair but many of us will care for ours. Look around at most of the boats out there. New, old all brands considered, many have become dock queens and are neglected. At 3-4 million for a new one, I'd be boatless. I'd doubt I'll ever be able to spend what it would cost to replace mine with a new one, even if I went much smaller. Those like me will always be looking for a good used one to fill our slips.

Very well put Jack.

 

[dottieshusband]

Hey Cheer up! I sold a new big buck boat to trade up to a 25 year old Hatteras! My logic was that the Hattie was fully depreciated and selling at a fraction of replacement cost... I was looking at years of unrecognized depreciation cost on my new boat, plus ceteras parabus on fuel, dockage, and maintainence.. I think the argument you make is that people that can't afford toys, shouldn't buy them.. very true. The way I look at the Hatteras is that It's money spent on a great big comfortable classic yacht, instead of depreciation on a big, bright, shiny Clorox bottle. If you think boating is expensive, buy an airplane! You'll quickly realize how inexpensive an old Hatteras really is! Happy boating!

 

[sportfish 45]

No one would argue owning a large boat is expensive but when you take the initial cost from 600K down to 200K that goes a long way toward the cost of owning and puts in a lot more peoples reach. For most that 200K is a huge investment or with boats I guess I should say expense that they will likely want to take care of.

 

[magnawake]

All statements are true. But, dont look down on dock Queens. 50K might just buy you a nice old 70's DC that you could liveaboard or use as a weekend getaway. Most people in my marina dont run their boats, but they are on them every weekend. They just sit at the dock and get used as a party platform for the weekends. However, that shouldnt be confused with not keeping them up. They certainly do maintain them and keep them looking good. It's really a second home that prolly wont loose too much more value (depriciation). Heck, I'm all for restoring the older Hatts and using them for "Dock Queens". At least they are using them. I just went back to my dirt house this weekend and the AC went out, the yard looks like a mess, house needs painting, etc. (hole in the dirt you throw money in) ha-ha, heard that before?

 

[Pete]

Let me use the Sportfish 45 example to further explore this subject. Five years ago a certain boat would sell for $600K and today for $200K. Very likely the buyers attracted to the $600K boat are going to have greater resources than the $200K buyers. But, the cost of ownership is not different. From dockage, to fuel, to replacement parts, etc. the cost remains a constant. Thus in year one of ownership, $30K of expenses is 5% of acquistion cost for the $600K case versus 15% for the $200K buyer. Since operational and maintenance expenses are seldom recovered on a resale, this percentage becomes an important consideration. Just how high can the annual expense go, as a percentage of acquistion cost, before a person becomes discouraged, knowing that the annual expenses will not be recovered. Perhaps it is 20% or 25%, but at some point the owner will become reluctant to continue the expense level, at least I believe this is the case. And I believe that at 15% annually, many new owners will become discouraged quickly.

Two additional quick considerations. What happens to our $200K owner, with his 15% annual out of pocket expense, should a year later he see equivalent Hatteras boats selling for $175K? And lets recogonize that us Sam's Forum members are a unique and small percentage of Hatteras owners, with an intense interest in our boats and everything that makes them a Hatteras. The market for very inexpensive used Hatteras boats is much larger and full of persons who just want it to work and continue to look good, like the family vehicle.


Pete

 

[sportfish 45]

All true analysis and certainly possible. The flaw I see is that your assuming that the 600K buyer was replaced by a 200K buyer when thay are likely one in the same. It's likely the buyer or potential buyer didn't walk from the 600K deal because it's beyond his means he walked because he felt the boat was to expensive for the current market and he was correct. So if he comes back and buys at 200K he comes in with the same economic means he had at 600K and he's got 400K left in the bank.

For sure some will be enticed by a reduced price and enter into something they can't afford to own but that happens in any market. I agree that reduced prices may cause it to happen more but it still my be better than having them for sale for years by discusted owners who likely won't want to spend a dime on maintenance.

 

[Pascal]

Yes operating costs will be pretty similar for both a 70s vintage boat and a new or late model one of the same size but there is a lot more to costs than maintenance, fuel and dockage

Depreciation and interests on a 1.5M new 50ish footer will average $150k a year for the first 5 to 6 years, that s big chuck of change...

 

[dottieshusband]

On my old "new" boat I had a "payment", not so on my 63MY. So I have more free cash to indulge myself.. I think more folks are in the mode of buy a classic and keep it up, vs buy new and watch it depreciate. One truism is that all new boats, will become old boats.. boats are like women..there is something to love about all of them!

 

[jim rosenthal]

All of us want to own a boat and go boating. And most of us want to do it as reasonably as possible. No one here wants to spend more money than they have to.

I agree with DH- if the cost of getting the boat goes down, and you have a finite pool of funds to work with, then you have more to spend on upkeep, running costs, etc. The fact is that an older Hatteras MY or convertible can be bought very cheaply now, and many of them are really excellent boats that had good care from their prior owners and don't need a huge amount done to keep them in decent usable shape.

The only thing better than going boating is going boating on a boat you own outright with no payment. It's yours and you can do what you wish and go where you want. I could afford a bigger Hatteras SF but what would be the point? I wouldn't go anywhere different, I would just spend more to do the same thing, I'd have to give up the slip that I love, etc. Plus I would have to find Blue Note a new owner, which would kill me.

In this respect, I am a glass-half-full kind of guy. I think a lot of folks are going to buy old Hatteras Yachts and treasure them, just like I have. Class always tells, and these are classy old boats.

 

[saltshaker]

When I bought my boat there was a 3 year old Hatteras 60C for sale right behind me. Boat was 2.7million new not including outfitting. They were asking 1.8mil for it and she eventually sold for 1.5mil. Almost 1.5 mil hit in 3 years just for depreciation. Probably another 200K in the cost to own and use it for those 3 years. If they had a crew, that would be over double that. My boat will never cost me anywhere near that.

 

[jim rosenthal]

Egg-Zachary.

One of my friends bought quite a decent 41 MY for cash. He's fixing it up now, it's looking great, and with his careful use of it and knowledgeable upgrades it will be fairly stable in value. People who know what they are doing can get a nice solid boat for not a great deal of money and go boating, which is what this is all about. There's a lot of pleasure in doing something you love on a reasonable budget. I never had the biggest or newest boat anywhere I went, anyway, so what the hell. I may not be in the box seats, but I ain't in the bleachers, either.

 

[sportfish 45]

That's exactly what its all about. I see enthusiastic new owners of larger boats of all makes getting great deals and taking boats that were for sale and UN loved and bringing them back into service. It's a beautiful thing.

 

[Tim Powell]

Yes operating costs will be pretty similar for both a 70s vintage boat and a new or late model one of the same size but there is a lot more to costs than maintenance, fuel and dockage

Depreciation and interests on a 1.5M new 50ish footer will average $150k a year for the first 5 to 6 years, that s big chuck of change...

Pascal
You are exactley correct. We can own one for the kind of money new boat owners spend (loose) during the first year. As for looks and speed it can be matched. Quality may be better if the old boat owner ore knowlegeable and watch their purchases.
It makes me sick to see a run down non reversable hat. There is absolute no sense in it. If you can not afford to keep one in so called yacht quality you going to loose your investment.
As all of you know after sell my 45c which I should have kept. I have looked from Mississippi to New York. I have walked away from some junk and sone overpriced nice ones. I guess I am compring my old 45 to others. For what i sold to whats avable in quality and price. I missed a 52c Just what I wanted. With the help of Tom Slane and Jack. I just did not move fast enough.(GOOD STUFF GOES FAST) A 52 c with 3406 cats and a good looking boat at that. Was bought for about 180000. That boat would have made me very happy. There is the numbers poping up again as Pascal said. That boat was probley a 25 28 cruise and from what i understand it was a looker. I will take it all day!!!!! over a new one. I have seen around 20 to 30 boats the nice ones are holding their prices as i can tell the others be careful.(it may not really be cheap) By the time you purchase and spend to make yacht quality you are in the dog house looking to get out. Know what you are looking at befor you buy this sight is grate for that. There is a tun of knowledge here and all is willing to share. This is HATTERAS COUNTRY Thanks to all Tim