Not only is ethanol proving to be a dud as a fuel substitute but there is increasing evidence that it is destroying engines in large numbers. And it’s not only boat engines & fuel tanks that are being destroyed. It’s your car too!
Brunswick Corp. chairman and CEO Dustan McCoy during a conference call today announced the company’s 1st quarter earnings showed a 52 percent drop in marine sales. Brunswick’s lineup of brands includes Hatteras, Bayliner, Cabo, Boston Whaler, Maxim, Meridian, Sealine and Sea Ray.
Statistical Surveys Inc. findings for the recreational marine industry show that sales fell 47.6 percent in the 30-foot-and-up segment across all 50 of the United States in 2008. Hinckley Yachts, Mercury MerCruiser, Viking Yachts, Cummins, Crownline, Cruisers, Hatteras and dozens of other manufacturers have lain off a large part of their workforce in the last several months. Some have stopped building boats altogether.
The Megayacht market has seen its share of troubles as well. Ferretti which builds CRN, Custom Line, Pershing, Riva, Ferretti Yachts, Apreamare, and Bertram has been pulled back from the brink by Mediobanca and Norberto Ferretti himself. Derecktor Shipyards has filed for Chapter 11 and Broward Marine suspend activity at its Dania, Florida, yard.
Many of the nation’s smaller boat dealers have lost their dealership status through a combination of insufficient sales activity and not being able to finance new inventory. Four wholesale credit providers have exited marine lending, leaving only GE Financial Services. GE Financial followed by cutting back lines of credit and jacking up interest rates. This has forced many boat dealers into bankruptcy or otherwise put them out of business.
The result has been a glut of non-sold boats that have been dumped on the market by liquidators. National Liquidators, the nation’s largest marine repossession company has tripled in size over the last two years.
Given the current economic crisis there has not been a corresponding surge in used boats flooding the brokerage market as one might expect. This has come as a bit of a surprise considering the media frenzy over job losses, home foreclosures, recession woes and Chicken Little screaming that the sky is indeed falling! It seems that boat owners are choosing to hold onto their boats for longer and will continue to spend money on maintenance and improvements.
Bargain hunters have been taking advantage of the buyer’s market over the last several months. Boats that were priced well below market value have been finding new owners. The wholesale, re-possessed and retail stock is rapidly clearing the market as consumer confidence improves.
If you have been putting off a buying decision waiting for boat prices to bottom out it is time to start evaluating your options. Cut-priced retail inventory is rapidly disappearing. Boat builders are not prepared or able to replenish that supply with new stock. In fact, two years from now you will be hard pressed to even find a 2009 model boat. Distress sales of used boats are hard to come by as well. Understand that most boats valued at $300,000 and more are not owned by an hourly paid employee who can no longer keep up with the payments.
Boat prices are now at historic lows and are very unlikely to go any lower. As the supply of new and used boats diminishes with no new inventory to replenish the market – prices of used and brokerage boats are beginning to stabilize. Demand will begin to force prices closer to normal market values.
The good news is boat prices have never been better and financing is readily available for qualified buyers who can come up with 20 percent down and verify their income. The turmoil in our banking system has resulted in favorable interest rates that can be locked in for a 20 year loan.
Make your boat buying decision now while you still have plenty of options and prices are at record lows.
A Perfect Alternative When Buying a Boat
Fractional yacht ownership is like timeshare for boats. You take part ownership in a yacht and share costs with one or more other owners. This can be an attractive alternative to purchasing a boat on your own for several reasons. This article explains why you should consider fractional yacht ownership, how to buy part ownership and will tell you where to look.
The average boat owner makes use of their boat twenty days to six weeks per year. You may use your boat more often. Take a few minutes now and calculate the number of days you used your boat in the last year. Very few boat owners have the time to devote 365 days a year to their passion. This simple calculation alone may reveal the reason why so many complain about the high cost of financing, maintenance, repair, cleaning, storage or slip fees and crew. Consider that a one quarter share in a boat may be easier to justify.
Here’s another way to look at partial yacht ownership. You can afford and justify an exponentially larger yacht and stay within your original budget simply by sharing ownership. If you have had bad boat partnership experiences in the past you now have a safe and convenient alternative. You will learn why this is a safe option later in this article.
Fractional boat ownership is on the rise for a number of reasons. The current economic climate is forcing many people to re-think how their money is spent on luxuries. The concept has been proved in other industries and fine tuned over the last few years in the yachting world. More boat builders and dealers are offering time share in yachts in order to sell product. Improved communications have allowed this ownership concept to be introduced to more of the boating community.
In the past some were turned off of this form of ownership. Naturally they disliked the idea of using other people’s stuff! This inconvenience has now been corrected by management companies who will freshen boats with your personal linens, dishware, silverware, art work, crew and even toys.
How to Buy Part Ownership of a Yacht
There are a growing number of companies worldwide who offer fractional yacht ownership. Typically each boat is divided into shares ranging from two owners to ten. You buy one or more shares depending on anticipated yearly usage. Payments will include the initial share purchase and then a monthly or annual maintenance fee. That fee is the yacht’s operating expenses for the year divided equally among the owners. Some programs allow owners to swap weeks with other owners to accommodate unanticipated changes in a family’s schedule.
When shopping for fractional ownership you need to check if the monthly maintenance fee includes; administration and scheduling, insurance, maintenance and detailing, dockage, a valet service, crew and even emergency assistance. You will likely have to pay for fuel, customs and port fees and provisioning.
Check and make sure that when you purchase a share of a yacht that you are an actual owner and not conned into paying for a glorified, long term charter. In the United States fractional boat companies are often set up as LLCs (Limited Liability Company). Company structure may take on a slightly different form in your country. Ownership plans can run from five to ten years. At the conclusion of the ownership period the boat is sold and the proceeds are divided up amongst the owners.
This is an ideal option for someone who wishes to enjoy exploring far from home. For example if you live in Europe or somewhere in Asia and wish to boat in the United States or the Caribbean you can get shares in a boat in that country. This eliminates the need to transport the boat home. It also ensures that your boat is professionally cared for in your absence.
A variety of yacht sizes are available. Companies offering smaller boats generally are specific to a certain geographic region. Larger yachts offer more range and can include trans-oceanic capabilities. What you would normally pay as full price for a smaller boat can expand your horizons considerably and buy you a share in a yacht that can take you places you only dreamed of before.
Where to Find Fractional Yacht Ownership
Fractional yacht ownership opportunities can now be found around the world. Most companies however are located on the US East Coast, the Caribbean and Mexico, Central America, and the Mediterranean. There are fewer options available in the Middle East, the US West Coast and the Pacific Northwest.
If you have been trying to sell your boat with no luck you can try approaching one of the fractional yacht ownership companies. This type of ownership is growing in some areas of the world faster than boats can be acquired. Ask them if they are interested in putting your yacht into their time share program. You could retain partial ownership and use of your boat and free up a large chunk of cash in the process. Interest will depend on each company’s clientèle. For example, fractional ownership companies that specialize in larger yachts may only want four stateroom boats in their fleet.
For a complete list of Fractional Yacht Ownership opportunities simply put your name and email address in the box below. I’ll see that you get the list right away.
If you have any other questions please get in touch with me at firstname.lastname@example.org.
Rampage Yachts has introduced the world’s first production express sportfishing yacht with Volvo’s IPS pod drives and the new “Sportfishing Mode”. The Sportfishing Mode allows you to spin the boat at full throttle, back down on a fish, and even follow the fish faster than the angler can reel it in to the boat.
“Some people still question the effectiveness of pod drives when compared to standard propulsion – and offshore anglers are notoriously change-averse. But from my personal experience, after testing several boats with pod drives, these new propulsion systems represent the single-greatest revolution in boating since the chart plotter” says Dean Travis Clark of Marlin Magazine in the November 2008 issue.
“At 3,000 rpm, …we were able to point the boat like a ballet dancer on steroids“, says Peter A. Janssen of Motorboating Magazine in the January 2009 issue.
This is the latest and most significant new advance in sportfishing since Earnest Hemingway put a steering wheel on the top of his boat to make the first flybridge.
The Volvo IPS pod drives allow joy stick docking so simple that a child could put this boat into a tight slip. And the fuel economy increases by an average of 30 to 50 percent at any speed.
There are even more notable improvements over a boat with standard drives. You have a much tighter turning radius because you are using the pods to turn rather than the rudders and playing with the engine controls. Time to plane is a lot quicker and bow rise has practically been eliminated. That is because the forward facing props are running parallel to the hull bottom rather than angling downward like props on traditional shafts.
When you think this through you realize that backing down on a fish is a very dry experience indeed because the transom does not have a need to dig in and down. Again, the props are running parallel to the hull bottom.
There’s even more! The engine exhaust is incorporated into the underwater pod drives. The result is that there is no diesel smell whatsover even in a following sea and wind. You have a much quieter running boat. With no long shafts running from the transmissions out the hull to the props there is no chance of vibration.
The Volvo IPS pod system has been installed on hundreds of other boats and proven itself over the last couple of years. Most notable may be Lazzara Yachts new LSX Ninety Two with four Volvo IPS pod drives. Rich Lazzara just published an excellent article on his blog extolling the virtues of IPS drives over conventional drives.
Call me if you have any questions or wish to try one of these remarkable boats on the open sea. You can send me an email by clicking on the contact tab at the top, or call me at (954) 614-1663.
David Tomen CPYB
One of the better known boat loan lenders was found alive today in South Florida. I can verify that because I received an email from him this morning, responded to it and he replied!
Naturally I had to ask him the question. Consumer confidence seems to be at rock bottom. No one seems to be able to get an auto or home loan. Big banks are falling around us. The federal government is bailing the big boys out but seems to have forgotten who put them in power in the first place.
So my question was how does a person take advantage of the best boat prices in years? Most people haven’t got the cash on hand but can still afford a reasonable monthly payment. Can a person still get a boat loan?
It turns out that the marine finance companies that are left have millions to lend. The strongest marine lenders in the industry are still strong and are competing fiercely with each other to stay strong in this challenging economy.
Mark Lyon from Seacoast Marine Finance is an old friend and sent me a letter that you can download here. In the letter Mr. Lyon explains what has happened in the marine lending sector. He also verifies that boat loans are absolutely still available for qualified buyers. It turns out that the established boat loan companies did not succumb to the temptation that a lot of the big banks did in the sub-prime fiasco.
Mr Lyon goes on to say that, “Sophisticated yacht buyers view financing as part of a prudent business decision that permits them to minimize cash outlay. In most cases, 75%-80% of the purchase price may be financed for up to 20 years. The vessel itself is the only collateral required; marine financing does not encumber any other personal or business assets.”
Download the full version of Mr. Lyon’s [ tag-tec ]boat loan[ /tag-tec ] -> letter here. A boat loan calculator is available online here: Boat Loan Calculator. Get in touch with me for Mr. Lyon’s email address and phone number by using my contact form here.
David Tomen CPYB