by Joyce Deaton
Remember the summer of 2008? Houses were springing up everywhere on the lakefronts, jobs were easy to come by, and buying a boat or moving up to a bigger boat seemed like a sensible next step. But when the bottom fell out of the economy a few weeks later, everything began to look different. Most of us became suddenly more cautious about buying anything unless it was a clear necessity. Beyond that, we’d have to think about it.
Still thinking about buying a boat, but still putting it off? Well, that’s one way to look at it. But other factors at work in the current boating market bear consideration. If you want to put your family in a boat within the next few years, you might be glad to hear that the really sensible time to buy it is right now.
Boat dealers, like other businesses, have been hard hit by the economic downturn. They’ve faced a triple-whammy of lower demand, tighter lending requirements for their buyers, and financing problems of their own. Most dealers buy their inventory with “floor plan financing” through specialized lenders. Traditionally, these lenders only required dealers to pay interest on the boats until they were sold, but tight economic times have changed all that. Some lenders have gone out of the business, and those remaining now typically require dealers to pay off their boats in full if they sit on the showroom floor for a year or so. Think of having, say, 10 models of $50,000 boats on the floor for nine or 10 months, and you see why dealers are motivated to sell.
A little farther back up the pipeline, boat manufacturers also are taking a hit. The new financing problems make dealers more cautious about stocking up on the latest models, and that means fewer orders. Slower sales compound the problem, so many manufacturers are offering rebates, longer engine warranties, and other incentives to help dealers make the sale.
These factors, unfortunate as they are for the boating business, mean there’s a good chance you can find a better deal on your chosen boat than you would have found last year. Most dealers say buyers with solid credit are getting their loans approved – at the lowest interest rates in a decade. And looking ahead, most say that when the economy does turn around, an expected inflationary spiral will raise both boat prices and interest rates. Put it all together, and it looks like the smartest time to buy is now.
Besides, as you’ve probably already figured out, you can entertain your family more frequently, conveniently and inexpensively on a boat every weekend than you can with a once-a-year trip to London – or even Disney World. Especially if you buy it now at a record low price.
To get a sense of what kind of deals are out there, Pilot talked with several boat dealers in the Piedmont. Here’s their take on why you’re likely to grab a bargain if you act now.
Long Island Marina, Catawba
“Right now the factories are offering discounts and incentives of about $1,500 on medium-priced boats. Dealers are passing these along by offering better pricing because we want to clear up our inventory.”
Boater’s Marine, Monroe
“We’re selling at the lowest margins we’ve earned since we’ve been in business. The factories are delaying the introduction of new models until fall to help dealers clear their inventory. Prices on the new models usually go up, so buyers will save if they buy now. We’re also finding that manufacturers can build special-order boats more quickly. We used to get 30- to 90-day delivery on orders, but now we can get them in about three weeks.”
Carolina Mobile Marine Sales and Service
River City Marina, Mooresville
“We’re not having any problems getting financing for our buyers. Some of the terms are tighter. You used to be able to get a loan for zero to 10 percent down. Now they’ll require 10 percent. But there are plenty of banks lending, so if you have good credit, you won’t have any trouble getting a loan. I don’t think interest rates or prices will go down, so this is the best time to buy – especially for older model years of new boats.”
Perth Marine, Troutman
“It’s a buyer’s market – especially on in-stock boats. Because the lenders that finance our inventory are requiring faster payoffs, dealers have real incentives to get boats sold. Lots of dealers still have a ton of boats, and if you buy one that’s one or two model years old, you’ll get super-deep discounts and still have a new boat with warranty.”
Huntley Marine, Pineville
“It’s a great time to buy. We’re getting factory rebates up to $1,500. Interest rates are as low as they’ve been in 10 years, and the dollars are there if you have good credit. We’re seeing a lot of people who are deciding on boats for their family instead of long, expensive vacations. They’re realizing it makes sense.”
David Fritts Outdoors, Lexington
“With the economy like it is, many people have been reluctant to spend, and dealers are selling at invoice and below to avoid keeping the boats in inventory and paying interest on them. It costs us for them to sit here. We’re coming up on the model-year change, and that makes the boats in stock now an even better buy. We’re not having any problems getting people financed, and we’re finding many buyers interested in good, two-to-four-year-old used boats that are in good shape. We can’t keep enough of these.”
New Hope Marine, Gastonia
“Boats are a true bargain right now. There’s an awful lot of inventory out there versus demand, and dealers are facing a number of challenges – including increased cost for capital – that make it necessary to move these boats out. We’ve sold boats this year at profit margins we wouldn’t have considered a year ago. It’s just a unique situation. If you’ve been thinking about buying a boat and putting it off, this is probably the best time to buy. When the economy does pick up, I think we’re in for inflationary pressures, and deals at that point won’t be as good as now.”