http://tomdwelsh.com/about-tom/Are you looking for a good used bowrider for the family cottage this summer. Did you spend some time at The Toronto Boat Show and the pricing with the devaluation of the Canadian dollar make you want to pull the blankets up over your head. Now your thinking that you do not want to leverage the family too much into a new boat and perhaps a good used bowrider is the way to go?
The treasure hunt for the elusive 18′ to 20′ good used not too old bowrider can be quite the journey and is not without associated perils! I frequently hear from families thinking that the boat business is like the car business so there is always a good supply of relatively new gently used bowrider available….right? Unfortunately used bowriders, used pontoon boats and used fishing boats are in very short supply now and will be for many years. Why is that?
The 2008 boating market explosion still echoes in 2016 and the blast concussion waves will reverberate for many more years. Painful memories of the 2008 market collapse…..in a short period of time essentially 1800 boat builders of all types of sizes and more that a few boat dealerships were vaporized. Okay but what does that have to do with used boat availability right now?
In the years following 2008…..80% less pleasure boats were built and sold than in the 8 years previous to 2008! We are talking about 1000’s of boating units! The normal time period cottagers consider trading or upgrading their cottage bowrider is 8 to 10 years from date of purchase. 2004 to 2007 were strong retail years in the boat business….2009/2010/2011 not so much! Reduced boat sales mean that there is potentially less trade-ins coming down the pipeline. Plus the higher cost of replacement may mean that owners will hang on longer to their existing watercraft which places additional pressure on supply . The conclusion to draw from this fact is that in a supply and demand situation….demand outstrips supply. When demand outstrips supply….choice is restricted and prices climb.
In 2015 and early 2016, the Canadian dollar lost significant value versus the American Greenback. In fact based on the 2016 January Toronto Boat Show the difference year over year is 25%…..more! New bowrider, pontoon boat and fishing boat prices right now are attention grabbing to those who may have been looking at a new boats purchase for some time. The upward retail pricing trend that started in 2015 and really accelerated in 2016 can mean that some families right now cannot consider a new boat buy. The choice then is either postpone the purchase or look for a more affordable used boat. To further make buying a good used boat in Ontario a real chore….the Americans boat dealers invaded Ontario in 2015 loading up trucks with their currency advantage buying power with as much used boat inventory as they could stuff on a trailer. Ontario used boats always had a reputation of a higher standard and less structural issues than those Florida salt water based boats and now with a 35 to 40% purchasing discount when buying in US dollars….bargain found!
If boat builders know that the increased pricing is affecting new boat sales in Ontario…why do they not do something about it? It is all about the money! The majority of boat builders are based in the United States and for the last few years they have not been making any money….many have lost significant amounts of money….so there is no pot of gold to draw from to stimulate retail sales activity. The present value of the Canadian dollar is not a real concern of the American boat builder as they live and die on US sales these days. The return on investment at the boat builder level on a boat of less than 20 feet is minuscule at best….so many builders do not even attempt to build a boat less than 19 feet these days. Okay all this being said….what can we do or what should we consider in a small available market of used bowriders, pontoon boats and fishing boats. When a family purchases a new boat…there is less compromise as items such as colour, horsepower and seating configurations can all be chosen inside a set budget.
The question is to what level should a used boat purchaser can or should compromise on a purchase. What comfort level are you prepared to live with or what is going to allow me to not be tossing and turning all night thinking about it.
The question reframed is ….are you prepared to buy a lesser quality bowrider, aluminum fishing boat or pontoon boat based on the available supply right now? What do I mean by lesser quality….not all brands are built with the same build standards for quality materials and the quality of a brand can be a moving target based on the year of production.
Much more to follow!