"Rosalie B." wrote in message
news
Gordon wrote:


d) Why does the value of boats fall off so fast? Some new boats
seem
to loose half their value in five years.

Because people are stupid enough to buy a new boat which costs a lot
of money. Same as with cars.

Not all boats lose that much. In 1989, an Island Packet 31 listed
at
under $78,000. Today there is a 1989 on Yacht World for $74,000 and
this
is typical for IPs. Of course if you count inflation--
Still not bad for an 18 year old boat.
Gordon

That has a lot to do with inflation. How much would 1989$$s be worth
in current buying power? In the ten years between 1989 and 1999, the
buying power of the dollar went down. What you could buy for $78K in
1989 would take about $104 in 1999. That's not just a $4K loss - it
is a $30K loss

A more cogent analysis would be - how much was that boat selling for
in 1994? How much would you have had to pay for that $78K boat when
it was five years old?

Some of the older boats hold their value (discounting the cost of
inflation) pretty well, but that's an argument FOR buying an old boat.

Another argument FOR buying and old boat is that the new boats don't
come equipped - you have spend mucho additional money to fit her out
with things like lines, fenders and the like.

AGAINST an old boat is that the equipment may be worn and outdated.


When it comes to things holding their value or increasing in value
people see what they want to see. Boats usually visibly go down in
value quite rapidly in the first couple of years. Same with cars. But
houses people claim make them money. But, people are wrong. They buy a
house for 100K and five years later they have it appraised and the value
is now 150K so they say, "Wow I've made 50% on my investment. WRONG! Add
in the 1) taxes 2) insurance 3) upkeep 4) utilities 5) inflation 6)
furnishings 7) mortgage interest, etc. and you've LOST money on it.
Simplistic bought for and sold for dollar values are totally misleading.

Wilbur Hubbard